2025 Media & Entertainment Industry Predictions Report

2025
Media &
Entertainment
Industry
Predictions Report

2
One year ago, we began our first annual
AlixPartners Media & Entertainment Industry
Predictions Report by stating that “the media
and entertainment industry has always been a
poster child of creative destruction.”
Fast-forward to year two, and that sentence still rings true—in fact, the destruction and
competition may have only grown fiercer.
AI advances have made major inroads in the past year and will continue to serve as the
major technological force disrupting business and operations across the media industry.
From a creative perspective, AI has further penetrated the T V and film sectors, where
practical, easy-to-implement use cases with measurable outcomes will lead the way in
2025. But we don’t expect the technology to replace human talent; it should only enhance
creative output. AI is also disrupting the video gaming, casino gaming, sports betting, and
search markets, shifting traditional business models to meet consumer preferences.
Legacy media and advertising businesses are seeing a similar need to transform business
models as subscription revenue moves from Pay T V to streaming, while advertising
revenue moves from linear to digital. The continued rise of retail media will evolve where
companies place their ad dollars to match consumption habits.
2025 Media & Entertainment Industry Predictions Report

3
01. STREAMING WARS: The battle over
the next generation of TV
1 Streaming subscriptions purchased through wholesale
distribution will rise to 60-70% in mature markets, driven
by the growing momentum of bundling and aggregation.
Over time we expect to see three to five “central hubs”
emerge as leading distributors, but in 2025, we will see
several new deal partnerships as the industry experiments
with consolidating streaming services.
2 Experimental bundling partnerships among direct-to-
consumer (DTC) platforms are early indicators of broader
industry consolidation coming in 2025.
3 Traditional Pay TV subscribers in the U.S. will drop below
50 million in 2025—less than half of what they were just
a decade ago. Meanwhile, virtual multichannel video
programming distributors (vMVPDs) are approaching their
peak before entering a period of decline after 2025, driven
by the rapid shift of live sports to DTC platforms, evolving
consumer behavior, and rising costs.
02. SPORTS BETTING AND CASINO
GAMING: Fund tech investments or face
marginalization
There will only be room for three to five dominant players
within the online sports betting and iGaming industries
to successfully invest at scale and grow. As others fight
for market share, we predict at least one company will be
forced out of the competitive arena.
03. BEYOND THE CONSOLE:
Video gaming’s cloud revolution
Both gaming console and PC hardware sales will decline,
as consumers choose to spend instead on displays and
streaming devices.
We lay out our second annual AlixPartners Media & Entertainment Industry
Predictions Report across seven chapters. As we enter 2025, we believe our
core predictions will shape the future direction of the industry:
04. AI IN CREATIVE INDUSTRIES:
Enhancing, rather than replacing, human
creativity in TV and film
AI will transform the production cycle—not by eliminating
creative jobs, but by redefining roles and sparking new
synergies between creative teams and technology.
In fact, we predict that in 2025 there will be a lack of
creatives with the expertise and skills required to use the
new AI tools available.
05. RETAIL MEDIA’S NEXT FRONTIER:
Transforming the advertising landscape
As advertisers continue shifting budget towards digital,
the convergence of the streaming services and retail media
trends, coupled with the global expansion of retail media
networks, will accelerate disruption within the
media industry.
06. THE FUTURE OF SEARCH:
AI-driven disruption and diversification
OpenAI, Perplexity, Amazon, and TikTok will gain further
traction, signaling a new era of competition in the search
industry. Google’s share of the search advertising market
will continue to shrink, decreasing by low single digits.
07. M&A IN MEDIA:
An environment ripe for dealmaking
1 Reduced regulatory scrutiny and a lower cost of capital
will generate a rebound in evaluation of media
consolidation deals.
2 On top of Comcast’s proposed carve-out of NBC cable
assets, we will see at least one more cable network
carve-out this year.
2025 Media & Entertainment Industry Predictions Report

01. Streaming wars: The battle over the next generation of T V 4
AUTHORS OF THIS CHAPTER:
Jeff Goldstein, Mark Endemaño, Lexie Perrotta, and Katarina Milen
01. STREAMING WARS:
The battle over the next
generation of TV
2025 Media & Entertainment Industry Predictions Report

01. Streaming wars: The battle over the next generation of T V 5
The global television industry is undergoing a seismic transformation as streaming’s rise accelerates the decline of
traditional Pay T V. However, the streaming market is still evolving toward a more stable state. In 2025, global subscription
video on demand (SVOD) and advertising-supported video on demand (AVOD) revenues will surpass $165 billion worldwide.
But the current ecosystem is highly fragmented with more than 200 streaming platforms, far more than the market can
sustain in the long run.
Pay TV is (nearly) dead; long live Pay TV
FIGURE 1: In 2025, global streaming revenues for SVOD & AVOD
services will surpass $165 billion
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
$56B $73B$95B
$113B $135B
$152B$165B$176B
$186B$197B
+22%
+7%
AVOD (Ad
-supported video on demand)
SVOD (Subscription video on demand)
Global SVOD & AVOD Revenues ($B, USD)
Source: PWC, AlixPartners analysis
CAGR (%)
2024- 2028
+13%
+5%
Forecast
DESIGN DONE
Despite major direct-to-consumer (DTC)
streaming platforms like Disney+ and
Paramount+ reporting profitability in 2024, the
economics of streaming remain a challenge.
Platforms face a complex landscape, driven by:
1 Subscriber churn: Fragmentation has fostered
serial churning, with 42% of subscribers
regularly subscribing, canceling, and
resubscribing to streaming services. These
churn cycles directly impact revenue stability,
subscriber growth, and long-term profitability
for streaming platforms.
2 Rising content costs: Disney, Comcast,
YouTube, Warner Bros. Discovery, Netflix, and
Paramount Global will collectively spend $126
billion on content in 2024 , a year-over-year
increase of 9%.
3 High subscriber acquisition costs: Streamers
face significant costs in acquiring new
subscribers through marketing, promotions,
and partnerships, making it increasingly
essential to achieve greater scale.
4 Platform taxes: Third-party billing
systems like Apple App Store or Google Play
take a 15-30% cut of subscription revenue for
SVOD transactions that are managed through
their ecosystems.
2025 Media & Entertainment Industry Predictions Report

01. Streaming wars: The battle over the next generation of T V 6
Streaming, once celebrated for its promise of choice and freedom, has become a double-edged sword for many consumers.
Increasing pain points related to the user journey, content discovery, and pricing are limiting convenience for users.
This dissatisfaction is underscored by the “paradox of choice”: With a plethora of content fragmented across platforms,
viewers spend excessive time— more than 11 minutes on average —deciding what to watch, often unaware of the full
breadth of content available. Alarmingly, only 28% of Americans and 21% of Europeans feel they can easily find something
to watch, according to Comcast’s “Content Discovery in a Multiscreen TV World” report . This indicates a deeper issue
of content discoverability, both within individual apps and across multiple streaming services, leaving users frustrated and
overwhelmed.
Fragmented customer relationships across multiple services make it challenging for consumers to keep track of their
subscriptions, further eroding viewer satisfaction—especially as major SVOD services have raised prices by more than 50%
on average since their launch. These hikes have led to an increase in the à la carte price of subscribing to three or more
premium SVOD services by more than 30% in recent years.
Infinite choice is really no choice at all
# of SVOD
services 3 per household 4 per household5 per household
Year 2019
20242019
202420192024
$21
$40
$30$52
$32
$51
$42$67
$44
$60
$55$81
High -end cost
Low -end cost
Total monthly subscription price
lowest standalone ad
– free tier
USD
+30%
+32%
+36%
Average number of services
per household in 2024
FIGURE 2: Total monthly cost of subscribing to three to five SVOD services à la carte
Source: Company websites, news articles, AlixPartners analysis
Includes 10 major SVOD services Apple TV+, Disney+, Discovery+, Hulu, Max, Netflix, Starz, Prime Video, Peacock, Paramount+
Based on subscription pricing in the U.S.
DESIGN DONE
In response to these challenges, streaming services are experimenting with various promotional pricing strategies,
bundles, and a turn back to wholesale distribution models. These strategies may be new to streaming, but they increasingly
resemble the tried-and-true traditional Pay T V models they sought to disrupt.
Yet, despite pain points with streaming, consumers haven’t forgotten about the shortcomings of rigid “all-in-or-nothing” Pay
T V bundles, including long-term contracts and paying for hundreds of largely unwatched channels. Traditional Pay T V is
declining for a reason, but for consumers to move forward into the future, they need a solution that combines the freedom
and flexibility of streaming with the simplicity and ease of the past.
2025 Media & Entertainment Industry Predictions Report

01. Streaming wars: The battle over the next generation of T V 7
Streaming bundles and wholesale distribution
partnerships surged in 2024 as players sought
to expand their reach and improve subscriber
retention. In our 2024 predictions report , we
projected that subscriptions purchased through
telco and aggregator bundles would surpass
50% in mature markets like the U.S.
The streaming distribution ecosystem is
increasingly complex, comprising various
bundles and third-party aggregation services.
In 2024, the number of documented telco
and online video distribution partnerships
worldwide rose to more than 2,000 , up from
1,200 a year ago.
While this growth highlights the importance
of bundling and aggregating content for
subscription video economics, it has also added
complexity for consumers in the near term.
Momentum for
streaming bundles
is a step, but not
the final destination
FIGURE 3: Value propositions across bundles and wholesale distribution options
Consumer Value Proposition
STREAMING DISTRIBUTION ECOSYSTEM Discounted
Offers Consolidated
Billing Single UIAdded-
Value
Services
Pure Direct- to-Consumer (DTC) Bundles
Single -Company Bundles Paramount+ With Showtime;
Hulu on Disney+
  
Co-Subscription Bundles Disney+, Hulu, Max; Starz-BritBox  
Wholesale Distribution
Operator / Telco
Bundles MVPD /
Broadband Xfinity
StreamSaver (Netflix,
Peacock, Apple TV+)
 
Mobile /
Wireless Verizon
myPlan(+play); T -Mobile
“Netflix on Us”   
Third-Party
Aggregators Big Tech /
vMVPD Amazon Prime Channels;
YouTube Primetime Channels;
Apple TV Channels; Hulu add -ons;
Fubo add-ons    
Smart TV
Devices / OS The Roku Channel; Google TV 
  
Cross-
Platform Bundles Retail
Walmart+ With Paramount+,
Amazon Prime, Instacart+ With Peacock, DoorDash With Max  
Other Multi-
Service Bundles Apple One, Hulu-
Spotify Bundle  
DESIGN DONE
Consumers must now navigate numerous distribution
options for streaming, which come with a wide range of value
propositions to consider:

• Single-company bundles combine multiple services owned by the
same parent company, offering them at a discounted rate through a
unified bill. Most have become integrated platforms like Paramount+
with Showtime or Hulu on Disney+.

• Co-subscription bundles include two or more competing DTC
streaming services in a single discounted package billed together.
However, they do not provide a unified user interface. As a result,
consumers must navigate between individual apps to access content
from different services.

• Operator bundles, offered through telecom operators, combine
streaming subscriptions with traditional cable, broadband, or mobile
services, often at a discounted rate or included as complementary
perks. These bundles are typically available only to existing
customers and feature a limited selection of streaming providers,
often restricting access to their ad-supported tiers.

• Third-party aggregators like Amazon Prime Channels and YouTube
Primetime Channels act as resellers of premium DTC streaming
services, consolidating multiple apps into a single interface. Unlike
other bundles, super-aggregators generally don’t offer discounted
rates compared to purchasing services directly. Instead, their primary
value lies in convenience, with unified subscription management and
no need to switch between multiple apps.
2025 Media & Entertainment Industry Predictions Report

01. Streaming wars: The battle over the next generation of T V 8
We predict that subscriptions purchased through
wholesale distribution will rise, reaching as much as
60-70% of streaming subscriptions in mature
markets—up from our 50-60% prediction last year.
This growth will include subscribers gained through third-
party aggregation services led by Amazon Prime Channels
and Roku Channels, as well as broadband operators like
Comcast (Xfinity, Sky) and Spectrum (Charter), and mobile
operators like Verizon.
Over time, we expect to see three to five winners emerge
as “central hubs” for the next generation of T V. In the
meantime, 2025 will reveal several new deals as the
industry experiments with consolidating streaming
platforms through bundling and aggregation.
Simultaneously, rising tension between content owners
and third-party distributors will persist, driving DTC players
to push back against platform taxes and the rise of third-
party gatekeepers. As a result, we expect to see more co-
subscription bundles—similar to the Disney+, Hulu, and Max
bundle—emerge in 2025.
These “ frenemy” bundles enable DTC players to offer
greater value and convenience to consumers without
sacrificing critical competitive advantages. By partnering
directly with other DTC platforms, they can retain direct
control over the consumer relationship, a larger share of
subscription revenues, and access to valuable viewer data—
tradeoffs they might forgo through wholesale partnerships
with third-party aggregators.
In 2025, the streaming ecosystem will continue to
lean into wholesale distribution
However, while current bundling efforts are a step in the
right direction toward a more simplified and streamlined
viewing experience, they are not enough to be game-
changing for the industry. We believe that experimental
streaming bundles are early indicators of consolidation,
which we expect will begin to play out in 2025. Bundling
allows streamers to test for potential revenue synergies
and operational alignment in a controlled, lower-risk
environment before committing to large-scale integrations.
The market can realistically support only a limited number
of profitable distributors, creating increasing competition as
DTC platforms, telco operators, and third-party aggregators
all vie to deliver the ultimate streaming experience.
Winning players will combine flexibility and choice with the
simplicity that consumers crave—such as seamless user
experiences, unified search and discoverability, and a single
interface and billing system.
As we head into 2025, the streaming wars are only
heating up. We will be watching closely as new
developments unfold in the battle over the next
generation of TV.
2025 Media & Entertainment Industry Predictions Report

01. Streaming wars: The battle over the next generation of T V 9
Traditional multichannel programming
video distributors (MVPDs) are at a critical
crossroads as the decline of legacy T V
subscriptions accelerates.
According to AlixPartners’ proprietary
cord-cutting model, U.S. Pay TV subscribers
are projected to decline by 10% in 2025,
shrinking the total number of subscribers
below 50 million—half of what it was just
a decade ago.
As the decline of legacy T V subscriptions
accelerates, traditional MVPDs are taking
aggressive steps to adapt.
We predict that traditional MVPDs will reinvent
themselves as leading wholesale distributors
in a streaming-centric world, becoming go-to
hubs for the next generation of TV.
To adapt to shifting consumer preferences,
MVPDs will need to dismantle the traditional
Pay T V bundle and embrace a new role that
prioritizes flexibility, personalization, and
streaming content variety. Early initiatives like
Xfinity’s StreamSaver bundle—which offers
internet customers Netflix with ads, Peacock
with ads, and Apple T V+ for $15 a month—
illustrate this strategic pivot.
By combining high-speed internet connectivity
with access to multiple streaming platforms at
competitive price points, MVPDs can leverage
their existing infrastructure and customer
relationships to provide a seamless, integrated
streaming experience. This approach will help
them compete against major digital distributors
like Roku and Amazon.
We may also see the rise of highly customizable
packages that allow customers to tailor their
bundles by selecting preferred streaming
services alongside broadband, wireless, or
mobile offerings. An early example is Verizon’s
myPlan, which offers the Disney bundle of Hulu,
Disney+, and ESPN+ for $10 a month, providing
significant savings compared to subscribing to
these services individually.
Traditional MVPDs aim to transform into
next-generation streaming hubs
10
20
30
40
50
60
70
80
90
100
110
0 Subscriber Numbers (in millions)
2009
2010
2011
2012
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024E
2025E
2026E
2027E
2028E 2013
Traditional PayTV subscribers vMVPD households
FIGURE 4: The global television industry is undergoing a seismic
transformation as streaming’s rise accelerates the decline of
traditional Pay TV
AlixPartners proprietary cord – cutting model, U.S. households (in millions)
Source: AlixPartners analysis
DESIGN DONE
2025 Media & Entertainment Industry Predictions Report

01. Streaming wars: The battle over the next generation of T V 10
2025 will mark
the peak of virtual
multichannel video
programming
distributors (vMVPDs)
Our cord-cutting model predicts that 2025
will mark the peak of vMVPDs before entering
a period of decline. This projection is driven
by several transformative shifts in the
television landscape.
The waning competitive
advantage of vMVPDs
Initially, vMVPDs attracted viewers by providing
a cable-like experience at a lower cost and with
greater flexibility. They provided an essential
alternative for viewers seeking live content,
such as sports and news, not available on SVOD
platforms. However, as more content, particularly
sports and news, moves toward streaming
platforms, the vMVPD value proposition will
begin to erode.
The disruption of DTC
sports streaming
We anticipate that the launch of ESPN’s
flagship streaming service in early fall 2025
will significantly disrupt both traditional cable
providers and virtual MVPDs.
As one of the last mainstays of live content
exclusive to Pay T V, sports have been a critical
driver of vMVPD subscriptions. Upon its
launch, ESPN’s direct-to-consumer offering will
allow fans to access premium sports content
independently of vMVPDs or traditional cable
subscriptions, undermining one of Pay T V’s last
remaining value propositions. Beyond ESPN, deep-pocketed tech companies like Amazon, Google,
and Apple are actively acquiring sports broadcasting rights, often
paying premium prices to secure exclusive deals. Prime Video, for
instance, recently landed a landmark 11-year deal to stream NBA
and WNBA games, becoming the exclusive streaming service for 66
regular-season NBA games beginning in 2025. This deal and ones
alike pose a direct challenge to vMVPDs like YouTube T V, which has
built a significant portion of its growth on
sports content.
YouTube T V, with an estimated 18 million subscribers and a 40%
share of the vMVPD market, owes much of its growth to its $2 billion
annual deal for NFL Sunday Ticket, which allows streaming of out-of-
market games across the U.S. Approximately 41% of Sunday Ticket
subscribers who purchase the add-on also become new YouTube T V
customers. However, as more sports content shifts to DTC platforms,
YouTube T V and other vMVPDs will face growing challenges in
retaining subscribers and maintaining their market share.
The rise of vMVPD alternatives is further accelerated by broadcasters
like CBS and NBC, who are partnering with their respective streaming
platforms, such as Paramount+ and Peacock, to provide live
sports and other premium content. With the combination of over-
the-air (OTA) broadcasts and streaming services, consumers can
increasingly assemble their own content packages, focusing on what
matters most to them.
Shifting consumer behaviors and the rise of
‘cord-nevers’
vMVPD growth has been fueled largely by cord-cutters—subscribers
transitioning from traditional Pay T V, with around 27% of MVPD
cancellations eventually signing up for a vMVPD service. Now,
the emerging generation of consumers, younger millennials, and
Generation Z are increasingly establishing households without ever
subscribing to traditional or virtual Pay T V services—earning the label
“cord-nevers.”
Adding to the pressure, vMVPD prices have risen significantly since
their inception. For instance, YouTube T V launched in 2017 at $35 per
month, but monthly fees have more than doubled to $73. These price
hikes reduce the affordability and appeal that initially set vMVPDs
apart from traditional Pay T V.
In 2025, vMVPD will peak
We project that vMVPDs will experience moderate growth in 2025,
driven primarily by ongoing cord-cutting trends. However, the rapid
shift of live sports to DTC platforms like ESPN’s flagship service,
coupled with changing consumer preferences and rising costs, will
mark a tipping point. Beyond 2025, vMVPDs are expected to decline
as their competitive edge continues to diminish.
For vMVPDs to remain competitive, they must innovate their offerings
to align with the demands of a rapidly evolving media landscape.
2025 Media & Entertainment Industry Predictions Report

02. Spor ts betting and casino gaming: Fund tech investments or face marginalization 11
AUTHORS OF THIS CHAPTER:
Matteo Carli, Paul Sanders, Clive De Silva, Steve Braude, Santiago Asiain, Guy Levell, and Brad Holmes
02. SPORTS BETTING AND CASINO GAMING:
Fund tech investments or face
marginalization
2025 Media & Entertainment Industry Predictions Report

02. Spor ts betting and casino gaming: Fund tech investments or face marginalization 12
The stakes are getting higher for the online sports betting and casino gaming
markets, and industry players need to be careful around where they place their
bets. Powerful market forces like consolidation, upstream integration, evolving
user behavior, and increasing regulation are combining to exert pressure on
CEO and CTO agendas.
Major jurisdictions are considering new affordability checks, stake
limits, enhanced verification and background checks, restrictions on
credit card payments, and stricter advertising rules. These measures
will better protect players, but gaming operators will need to overcome
increased costs and potentially reduced revenue. As jurisdictions
intensify efforts to penalize offending parties, operators have no
choice but to adhere or risk massive financial punishments—or even
the loss of their license to operate.
Compounding the regulatory challenges is a robust black market
that costs the legal gaming industry more than $44 billion in annual
revenue in the U.S. alone. Regulators are working to mitigate the
impact of illegal sports betting and online gaming by increasing
legalization, which could facilitate growth in the legal sector.
To solve for this, all operators will need to invest in core platforms
to ensure ongoing compliance with rising regulatory standards. This
includes implementing real-time, 360-degree views of customers
and their behaviors, along with identifying risk profiles and enacting
responsible gaming initiatives to promote player safety.
Increasing regulation carries
heavy implications for
operators that don’t comply
Technology is quintessential to unlocking potential for success. From an investment perspective, executives must focus on
the prevailing technological imperatives to get ahead. This means addressing long-standing tech debt , incorporating new
AI capabilities, modernizing products, and ensuring tech stacks are compatible for post-merger integrations—all alongside
investments for heightened, hyper-personalized user experiences and regulatory compliance.
As such, gaming operators must take control of their product and technology roadmaps as core differentiators while
growing efficiently to sustain investments as the market becomes increasingly competitive. Smaller players and niche
operators may struggle to keep up with high customer acquisition costs, compliance requirements, and advanced
technology needs.
In 2025, we believe that within the online sports betting and iGaming industries, there will only be room for three to
five dominant players to successfully invest at scale and grow. As others fight for market share, we predict at least one
company will be forced out of the competitive arena.
2025 Media & Entertainment Industry Predictions Report

02. Spor ts betting and casino gaming: Fund tech investments or face marginalization 13
GenAI has arrived, and all industries, including
gaming, are seeking to leverage the technology
for practical, scalable, operational, and
commercial benefits. While emerging use
cases differ in degrees of maturity at this stage,
operators that have a clearly formulated strategy
can harness the power of AI for short-term ROI
by improving their internal efficiency, bolstering
risk management and compliance efforts, and
increasing player satisfaction.
A key challenge around AI implementation is
effectively targeting the right use cases for a
given aim, which we highlighted in an article
in September. Eventually, we believe operators
will be able to utilize GenAI to expedite the game
ideation and design process and accelerate
decisions around the right games to greenlight.
But while AI offers incredible possibilities,
companies must not lose sight of the importance
of the player experience. Hyper-personalized
content is becoming table stakes to entice and
retain players, and operators that can leverage
technology to deliver individual, tailored gaming
offerings will reap the rewards. Immersive,
real-time social interactions as part of the
digital gaming experience are also growing in
popularity. For example, Evolution—the leading
global operator of online live-casino gaming—is
investing $75 million in Atlantic City to house
live-dealing studios that provide online players
with the atmosphere of in-house betting from the
comfort of their homes.
Apart from new technology, it’s critical that
operators looking to acquire or partner with
other companies can efficiently integrate their
tech stack to not disrupt a seamless player
experience. We often see M& A activity go wrong
when new products and technologies are poorly
integrated, operators overly customize third-
party components, weak legacy architecture
proves expensive to host and scale, and teams
support too many platforms at once.
– 2.0pp -1.0pp 0.0pp 1.0pp2.0pp 3.0pp
0%
5%
10%
15%
20%
25%
30%
35%
40%
R&D/Revenue growth
Revenue growth
IGT L&W
AGS Everi
FIGURE 5:
Increased revenue growth is visibly correlated with
growing R&D expenses as a share in revenue
Revenue and R&D / revenue growth (% change, 2019 – 2023)
1. IGT includes lottery segment
Source: Company’s 10K, S&P Capital IQ, AlixPartners analysis
DESIGN DONE
Aristocrat
Effectively integrating the latest technology—as well
as acquired technology—is imperative
Those that succeed will solve these tech debt and re-platforming
issues by ensuring their decisions align with short, medium,
and long-term business goals. Operators can start by asking
themselves four key questions: To what extent do my platforms:

• Enable new products, features, and content to be delivered
quickly and efficiently?

• Provide the ability to rapidly respond to ever-changing
regulatory requirements?

• Allow for operational scaling to support new markets
and new partnerships?

• Deliver a hyper-personalized player experience and
player-centric view?
Technological advancement is largely driven by integrating B2C
operators with B2B tech, solution, and content providers. When
analyzing the providers that have progressively increased their
commitment to R&D as a share of revenues, it’s clear that these
leaders have consistently achieved premium growth rates.
2025 Media & Entertainment Industry Predictions Report

02. Spor ts betting and casino gaming: Fund tech investments or face marginalization 14
202120222023
–
5
0
5
10
15
20
25
30
35
40
FIGURE 6:
Top three online sports betting and iGaming operators are increasingly consolidating their market share,
reaching ~ 60% in 2023 vs. 48% in 2021
Market share of top operators (% of market, 2021 – 2023)
FanDuel
DraftKings BetMGM
Penn Interactive Caesars
BetRivers Wynn Interactive
PointsBet Other
1. Penn entered a joint venture with ESPN in Aug 2023; PointsBet
was acquired by Fanatics in Jun 2023; Wynn dropped operations outside the states of Nevada and Massachusetts
Source: AGA, Company’s 10K & 10Q, S&P Capital IQ, Investor presentations, Earnings call, AlixPartners analysis
DESIGN DONE
Building and maintaining scale will be crucial to fund lofty investments in technology. We expect larger operators will make
the most of their economies of scale to drive market consolidation—and those with technology platforms most efficiently
set up to absorb new acquisitions will jump to pole position. Smaller players will likely struggle, as they lack the scale to
afford large investments.
Consolidation will continue to be part of the solution. Buyers are focused on adding new jurisdictions and games to
their portfolios, alongside augmenting their existing gaming offerings with new capabilities. Caesars Entertainment, for
example, recently acquired sports betting technology company ZeroFlucs to expand its same-game parlay offerings.
DraftKings bought digital lottery app Jackpocket to enter the lottery market, while Aristocrat acquired digital gaming,
sports betting, and lottery provider NeoGames to consolidate positioning for its interactive business.
Within online sports betting and iGaming, where technology advancements are more sustained, scale and R&D leadership
drive growing market shares for dominant players, relegating smaller competitors to marginal positions.
How will successful operators navigate
the road ahead?
2025 Media & Entertainment Industry Predictions Report

02. Spor ts betting and casino gaming: Fund tech investments or face marginalization 15
Over the next 12 months, we believe there will only be room
for three to five dominant players to successfully grow and
scale within the online sports betting and iGaming industries.
As others fight for survival, some will be forced out of the
competitive arena.
As the market witnesses fewer but much larger players thrive, we
will enter a new era of tech investment that prioritizes efficiency
and hyper-personalized player experiences. Consolidation will
continue as industry leaders fight to differentiate themselves to
customers—we’ll be watching to see which all-in bets pay off. Our prediction for
the sports betting
and casino gaming
markets in 2025
2025 Media & Entertainment Industry Predictions Report

03. Beyond the console: Video gaming’s cloud revolution 16
AUTHORS OF THIS CHAPTER:
Matteo Carli, Mario Ribera, Steph De Vuyst, Santiago Asiain, Maneel Grover, and Chris Schroeder
03. BEYOND THE CONSOLE:
Video gaming’s cloud
revolution
2025 Media & Entertainment Industry Predictions Report

03. Beyond the console: Video gaming’s cloud revolution 17
Cloud gaming is set to reshape the video gaming industry in the upcoming years, allowing a much broader base of users to
stream high-fidelity games (those with advanced graphics and complex game mechanics) on any device without the need
for expensive gaming consoles or PC hardware. The cloud gaming market projects to expand by a 44% CAGR through
2030, driven by rapidly improving high-speed internet infrastructures, evolving commercial models, and improved user
experiences. Beyond the gaming experience, cloud gaming will also transform all levels of the video game value chain.
We predict that in 2025, both gaming consoles and PC hardware sales will decline, as consumers choose to spend
instead on displays and streaming devices. 2025 will be a critical year for building cloud gaming capabilities across the
value chain, and players must consider carefully where to invest.
FIGURE 7: Cloud gaming 2025 predictions across the value chain DESIGN DONE
Customer layer
Gamers
Distribution layer
Digital storefronts
Ecosystem layer
Hardware & device
providers
Development layer
Developers &
publishers
Infrastructure layer
Cloud & connectivity
providers
Source: AlixPartners analysis
• Spend will shift away from console and PC hardware to displays (TVs and monitors),
accessories, and streaming devices
• AAA games on smartphones and portable gaming consoles will gain traction as game
and graphics processing shifts to the cloud
•
Investments in cloud infrastructure —including partnerships with cloud service
providers —will accelerate
• Subscription models will continue to replace one -time purchases as the primary
monetization lever for AAA games
•
Continued investment in cross -platform capabilities
• Increased investment in dedicated cloud -gaming data centers
• Xbox, PlayStation, et al. will continue to focus on console hardware sales in 2025,
while meaningfully expanding no -console models
•
Emergence of AAA games on mobile, requiring innovative user interfaces and game
mechanics
• Increased investment in server -native game development engines and game
optimization for cloud platforms
•
At- scale 5G / fiber roll- outs coupled with next- gen-AI -enabled virtualization software
will further enable cloud gaming
• More cloud service and content delivery network providers will enter the cloud gaming
market
2025 Media & Entertainment Industry Predictions Report

03. Beyond the console: Video gaming’s cloud revolution 18
FIGURE 8: How cloud gaming differentiates from conventional gaming
Conventional gaming relies on local (on -device) computation, while cloud gaming offloads it to remote servers
On -device
computation:
Disks and cartridges
Memory chips
Device’s CPU
Device’s GPU
Gaming device: Console, PC,
smartphone, tablet
Gaming servers
Cloud-based
computation:
Server storage
Centralized CPU
Server -based GPU
Gaming device:
Console, PC,
smartphone, tablet
Gaming servers
CONVENTIONAL GAMING
CLOUD GAMING
Controller input
Controller input
Game content stream
Constant internet connection
Game files download
One -time internet connection
Source: GlobalData
DESIGN DONE Cloud gaming encompasses various technologies that leverage the cloud to deliver all or part of the gaming experience.
The most significant of these is cloud streaming. Cloud streaming has two components: running central processing unit
(CPU) and graphics processing unit (GPU) intensive video games on powerful remote servers, and streaming the gameplay
to users’ devices. By shifting the considerable computing power required for gaming to the cloud, cloud streaming makes it
possible to play high-fidelity games on any device with a display and an internet connection.
How does cloud gaming work?
Why is cloud gaming
the future?
Cloud gaming offers vastly improved
accessibility and cross-platform integration.
It reduces consumer barriers to entry by
eliminating the need for expensive hardware
such as consoles or PCs, making high-quality
games more affordable and available to a wider
audience—though ongoing subscription prices
will likely increase as cloud hosting and delivery
costs are embedded within. This shift presents
an opportunity for traditional PC and console
game developers to expand their offerings
on platforms such as smartphones, which
account for ~50% of the global gaming market.
Additionally, cloud gaming aligns with current
trends for seamless cross-platform experiences,
allowing players to easily transition between
devices while maintaining gameplay progress.
3.4 5.07.011.1
17.0
23.9 30.845.3 63.8
0
10
20
30
40
50
60
70
Market Size in $B
2022
2023
2024
2025
2026
2027
2028
2029
2030
++4444%%
FIGURE 9: The cloud gaming market is poised to
considerably expand
Source: Cloud Gaming – Worldwide | Market.us Forecast
Forecast
DESIGN DONE
2025 Media & Entertainment Industry Predictions Report

03. Beyond the console: Video gaming’s cloud revolution 19
Cloud gaming current
location on
adoption curve
Q
R
37
L
M
N
O
P
Total revenue ($M)
2003
2004
2008
2009
2010
2011
2012
2013
LTi
2006
2007
2005
FIGURE 10:
Cloud gaming looks to follow a similar adoption curve to video streaming
Blockbuster Netflix
Source: Company details, Capital Im
Netflix
launches
streaming platform
DESIGN DONE
36
Despite its promising outlook, cloud gaming continues to face both technological and commercial constraints. On the
technology front, necessary internet speeds, low latencies, and virtualization software are not yet widely available to allow
for mass adoption. But 5G availability and fiber-optic infrastructure are advancing at pace, and AI and machine learning are
continuously optimizing video compression and reducing buffering times, further improving the overall user experience.
We therefore believe the technology constraint will soon be solved.
The transition to the right cloud-friendly commercial models, however, will prove more challenging. More specifically, four
entities make up the large majority of games consumed on consoles and PCs (Microsoft, PlayStation, and Nintendo for
consoles, and Steam on PC). While they are gaining momentum by bundling cloud gaming options with higher-end content
subscription service offerings, these companies have not yet reached a tipping point. Cloud gaming will only see mass
adoption once these storefronts incentivize it more effectively.
Xbox and PlayStation have offered cloud gaming for several years, but their focus has been on expanding cross-platform
reach rather than reducing customer costs by eliminating console hardware. On Xbox Live, customers must subscribe
to the most expensive “premium” plan to access cloud gaming. Steam, which makes most of its revenue by taking a
percentage of one-time purchases rather than a subscription model, only offers cloud gaming via peer-to-peer, in which
one player acts as the server and others connect to that player. To make a larger change, Steam would need to change its
revenue model.
What may finally incentivize game distributors to prioritize cloud gaming is evidence that the average revenue per user
(ARPU) for cloud games seems to be on the rise and set to surpass all other gaming mediums, apart from mobile, by
2 0 2 7. Once the commercial model problem has been solved, we expect a rapid shift from traditional to cloud gaming,
with an adoption curve similar to that of video streaming—where over a period of 10 years, Netflix completely wiped
away Blockbuster’s advantage, leading to the latter’s demise.
What challenges does cloud gaming face?
2025 Media & Entertainment Industry Predictions Report

03. Beyond the console: Video gaming’s cloud revolution 20
The cloud gaming market could reach $64 billion by
2030 (and $140 billion by 2032, according to
Market.us), and continue to rise from there. We
predict a marked shift in consumer spending in
2025, as gamers eschew traditional hardware to
instead spend on streaming devices and displays.
Game developers, publishers, and distributors alike
must focus on setting themselves up for success in
both the immediate and long term to prepare for the
cloud gaming revolution. Technological challenges
will soon be resolved, allowing those who solve the
commercial model problem to jump ahead in this
lucrative, burgeoning industry.
Our prediction for the
cloud gaming market
in 2025
2025 Media & Entertainment Industry Predictions Report

04. AI in creative industries: Enhancing, rather than replacing, human creativity in T V and film 21
AUTHORS OF THIS CHAPTER:
Mark Endemaño and Catherine Brien
04. AI IN CREATIVE INDUSTRIES:
Enhancing, rather than
replacing, human creativity
in TV and film
2025 Media & Entertainment Industry Predictions Report

04. AI in creative industries: Enhancing, rather than replacing, human creativity in T V and film 22
For decades, the creative industries have explored technology’s potential to shape society, from the dystopian visions
presented in movies like“Blade Runner” and “The Terminator” to the optimistic future of “A.I. Artificial Intelligence.” But in
recent years, AI has moved from on-screen fiction to real-world transformation—and with generative AI, the T V and film
industries are at the epicenter of this shift. Yet AI isn’t here to replace human creativity in T V and film; it’s here to enhance it.
In 2025, we predict that AI will continue transforming the production cycle—not by eliminating creative jobs, but by
providing new tools, redefining roles, and sparking synergies between creative teams and technology.
Pixar, a tech-born company, pioneered computer-generated imagery
(CGI) to bring deeply emotional stories like “Toy Story” to life.
Pixar’s innovative use of CGI technology was never about replacing
human artistry; it was about enhancing the production process and
improving the quality of animated films. The technology was always
in service to supporting character-led storytelling with heart. We
believe that AI will take on a similar supporting role with human
creativity as the lead.
The Academy Award-winning “Everything Everywhere All at
Once,” described by The New York Times as a “metaphysical
multiverse galaxy-brain head trip,” provides a powerful example
of AI complementing human creativity. Runway AI’s green screen
technology and stable diffusion were used to create the film’s
otherworldly scenes, seamlessly blending complex images to
conjure the multiverse in visually compelling ways. Additionally,
Filmmaker AI’s background removal tool streamlined post-
production, enabling the small visual effects team to achieve high-
quality results within tight deadlines.
The 2023 SAG-AFTRA and Writers Guild of America strikes
set a clear precedent: AI should serve as a tool to support, not
replace, human talent. A year later, AI tools are gaining traction,
with advertising creatives, studios, and filmmakers experimenting
with generative AI use. Inevitably, adoption varies across the
industry with mixed attitudes among artists. The overarching
expectation is that lower-level work will be automated, releasing
humans to bring their focus and creative talent to truly make a
difference on projects. In fact, we predict that in 2025 there will be
a lack of creatives with the expertise and skills required to use the
new AI tools available.
Rather than replacing artists,
AI acts as an enabler
2025 Media & Entertainment Industry Predictions Report

04. AI in creative industries: Enhancing, rather than replacing, human creativity in T V and film 23
Use cases that we predict will grow in 2025 include:
• Applications like Runway AI’s text-to-video tool
and Cinelytic’s analytics and predictive film intelligence
platform that are designed to plug into production
workflows, helping studios and filmmakers
streamline production tasks and make more
informed business decisions.

• Tools like Pencil AI that can create high-quality, low-
cost ads in minutes, with predictive analytics to
test performance. ChatGPT also provides analytical
capabilities, allowing industry players to create audience
archetypes to test new TV programs.

• From a post-production perspective, we expect localization
AI applications that improve dubbing and subtitling
solutions to see a continued increase in usage in 2025.
Platforms like Speechify, ElevenLabs, and Panjaya.ai
simplify and expedite the process to dub audio and create
closed captioning. This enables distribution companies
to unlock incremental revenues in territories where
localization costs have historically been prohibitive.
Low
High
Commercial adoption
•
Concept
development for
marketing
campaign
• Market analysis
• Market testing •
Media content for
publishing (text &
image)
• Audio content
generation •
AI dubbing for
content
localisation
• Content
moderation •
Personalised
content discovery
• Dynamic and
personalised
advertising •
Customer service
chatbots
• Content
moderation
• AI news
broadcaster
• Autocompleting
code to assist in –
game programming
• AI game NPCs
•
Game prototyping
• Script writing •
Colouring and
grading
• Visual effects
(VFX) workflow •
Budget
management
•
Deepfakes
• News article
generation
• Music composition
• AI-based virtual
reality experience
• AI rendering •
Voice cloning
• Creating realistic
sound effects for
film, TV or games
• Video editing
process
automation
•
AI-integrated VFX
workflows
(storyboarding,
motion capture)
• Movie predictive
analysis
• Script analysis •
Conversation
summarisation
tool •
Cybersecurity and
protection
• Streaming
optimisation
Pre –
production ProductionPost
–
production Commercial
Strategy Business
Operations
FIGURE 11: AI use cases span the entire value chain
DESIGN DONE
We believe that with thoughtful and pragmatic usage, AI tools have the potential to blend innovation and creativity to bring
stories to life faster, at lower cost, and eventually at the required level of quality.
Democratizing creativity and unlocking
new possibilities
GenAI is rapidly improving, but in its current state, there
are still limitations to what it can do and should be used
for. At the highest level, this technology is not yet capable
of handling full-scale film and T V production end-to-end.
In addition, vendors in the pre- and post-production space
are often newer entrants, catering to specific use cases and
niche applications. We predict that the output quality and
efficacy of the best of these tools will continue to evolve
through 2025.
Studios need to identify a combination of tools and seamlessly
integrate them into existing and improved workflows to
optimize across various stages of production. Move.ai, for
example, uses advanced motion capture to track human
movement without the need for traditional suits. OpenAI’s
Sora is still in development with the intention to offer AI-
driven support for tasks like script analysis and storyboarding,
enhancing efficiency in early production stages.
The increased stability, maturity, and improved
functionality of niche, use-case-specific tools is essential.
Companies need confidence that incorporating these tools into
integrated pipelines doesn’t create a single point of failure.
2025 Media & Entertainment Industry Predictions Report

04. AI in creative industries: Enhancing, rather than replacing, human creativity in T V and film 24
FIGURE 12: Creative industry leaders see major AI upside
47%
44%
39%
35%
34%
32%
30%
24%
18%
7%
8%
11%
10% 11%
14%
5%
9%
12%
7%
7%
Technology
Media/Entertainment Telecommunications Retail
Healthcare/Life Sciences
Consumer ProductsFinancial Serivces
Automotive and Industrial Aerospace and Defense Energy
Significant revenue opportunity Significant threat to revenue
DESIGN DONE
Creative industries have always been at the
forefront of new technology adoption, and
this remains the case for this current wave
of innovation.
According to AlixPartners’ annual
Digital Disruption Survey , 44% of media
and entertainment companies see AI as
a significant revenue opportunity. The
companies that will thrive are those
that thoughtfully embrace this
disruption, adapting their business and
commercial models to harness AI’s
potential for the future.
The media and
entertainment
sector is at the
leading edge
While AI’s upside potential for T V and film production is undeniable, it also raises serious legal and ethical challenges.
As Deepak Chopra said, “Technology can be beautiful and diabolical, just like people.” It’s up to us which version of AI
we create.
Many GenAI tools in the pre- and post-production space rely on copyrighted materials to train large language models
(LLMs), raising the major issue of infringement risk. There is also the key consideration of whether the IP created using
AI is afforded the same legal protections. With no clear standards, navigating these questions i