Digital Streaming Reshapes Traditional Media: Economic Shifts and Future Implications

April 29, 2025 — A new technical report, The Economic Interplay Between Digital Streaming Services and Traditional Media, authored by Aryan Tutsja and a co-author from the University of Colorado Colorado Springs, highlights the profound economic transformation driven by the rise of digital streaming platforms. Published in April 2025, the eight-page study (DOI: 10.13140/RG.2.2.28761.16886) explores how services like Netflix, Hulu, and Disney+ have disrupted traditional media industries, reshaping revenue streams, consumer habits, advertising strategies, and technological innovation.

A Declining Traditional Media Landscape

The report underscores a significant decline in traditional media revenues, particularly in the U.S. multichannel and video subscription sectors. In 2016, traditional multichannel revenue peaked at $177 billion, while video subscription services (e.g., cable, satellite) reached $16.94 billion. By 2024, the latter plummeted by nearly 50% to an estimated $63 billion, according to a 2023 S&P Global study cited in the report. Meanwhile, digital streaming services are projected to capture 53.5% of U.S. video subscription revenues by the end of 2025, as per eMarketer’s 2024 projections.

This shift has eroded the market share of traditional media conglomerates like Comcast, NBC, and CBS, forcing them to rethink content creation and business models. The report notes that these companies face “profound economic challenges” as streaming platforms capitalize on growing consumer demand for on-demand, cross-device, and personalized viewing experiences.

Changing Consumer Habits

Streaming services have fundamentally altered how audiences consume media. A September 2023 TV report cited in the study reveals that streaming accounted for a record 40.3% of U.S. TV consumption in June 2024, surpassing cable (27.2%) and broadcast (20.5%). The rise of “cord-cutting”—defined by Merriam-Webster as canceling cable television subscriptions—has accelerated this trend, driven by streaming’s flexibility, affordability, and diverse content offerings.

For instance, Netflix’s recent 10-year deal with World Wrestling Entertainment to expand sports content exemplifies how streaming platforms diversify to retain subscribers. The report also highlights a Carnegie Mellon study noting increased binge-watching among millennials, a behavior enabled by streaming services’ vast libraries and on-demand access. As traditional media struggles with high costs and limited content, consumers are increasingly favoring digital alternatives.

Advertising Strategies Evolve

The rise of streaming has also disrupted traditional media’s advertising revenue. A 2023 Pew Research Center study cited in the report shows that newspaper advertising revenue was surpassed by circulation revenue in 2020 for the first time since 1956. To compete, traditional media is adopting strategies like addressable TV advertising, which uses consumer data to deliver targeted ads, offering greater flexibility and return on investment.

Streaming platforms like Amazon Prime Video and Hulu have embraced this approach, with global addressable TV revenue projected to grow from $56 billion in 2022 to $87 billion by 2027, according to a 2023 StreamTV Insider report. Traditional media companies are also experimenting with digital marketing, social media campaigns, and shorter ad formats to regain audience engagement and profitability.

Technology as a Game-Changer

Technological advancements, particularly in artificial intelligence (AI) and machine learning, are reshaping content creation and distribution. The report cites a 2022 IABM study indicating that 32% of media companies had deployed AI by 2022, with 56% planning to adopt it soon. AI tools like ChatGPT and Adobe Premiere streamline scriptwriting, video editing, and content generation, while algorithms personalize recommendations based on user data.

Emerging technologies like augmented reality (AR) and virtual reality (VR) are also transforming media consumption, offering immersive storytelling experiences. However, the report acknowledges challenges, including ethical concerns around AI (e.g., data privacy, algorithmic bias) and the high costs of adopting AR/VR, which can strain smaller companies’ budgets.

Looking Ahead

The report concludes that the rise of digital streaming has fundamentally altered the media industry, with trends likely to persist. Traditional media companies are adapting by leveraging new technologies and advertising strategies, but their long-term sustainability remains uncertain. The study calls for future research to explore how these companies can navigate emerging technological advancements and maintain competitiveness.

As digital streaming continues to dominate, the media landscape is entering a new era defined by innovation and adaptability. For traditional media conglomerates, the challenge is clear: evolve or risk obsolescence in a rapidly changing economic environment.

Source: Tutsja, A., et al. (2025). The Economic Interplay Between Digital Streaming Services and Traditional Media. University of Colorado Colorado Springs.