The trend: Pay TV is on the out—and for Gen Z consumers, ad-supported streaming ain’t the solution.

• Ads are now seen by over half of SVOD users across all generations, with the exception of Gen Z, as the ad-supported subscription video-on-demand (SVOD) market continues to expand. Ad-supported tiers are used by just 42% of Gen Z subscribers, a slight increase from 39% the previous year.
• Less than half (49.6%) of households in the US had a traditional or digital TV subscription in 2025, making traditional pay TV a minority proposition.

Why it matters: Despite their growing popularity, Gen Z's preferred methods of spending their time do not align with traditional TV formats. According to Deloitte, Gen Z spends only 1.3 hours a day on streaming services and 0.8 hours a day watching traditional or livestreamed TV, less than any other generation. Instead, social media, video games, music, and user-generated content make up a larger portion of their media intake.

This generational difference is consistent with data on video consumption in general: according to our forecast, free ad-supported streaming TV (FAST) will only make up 4.9% of all video time in 2025, while YouTube will account for 10.6% and social video for 13.6%.

Our take: The move away from pay TV has become the norm rather than a fad. Ad-supported SVOD tier expansion aids platforms in recovering content costs, but it doesn't always result in meaningful interaction with younger audiences.

Gen Z is simply more receptive to formats that mimic their preferred environments. In order to remain relevant, streaming platforms will need to look beyond linear ad breaks and consider creator partnerships, shoppable video, or interactive experiences.

A Gen Z strategy based solely on ad-supported SVOD will be ineffective for advertisers. It will be necessary to use a variety of channels and content kinds that are suited to this generation's actual viewing habits and schedule.