The chaos on the screen and the battle for attention: Too many streaming services? Why choosing is so difficult.

The fragmentation of the television and streaming market: A comprehensive analysis

The increasing fragmentation of the media market, particularly in television and streaming, is a key phenomenon in today's media landscape. Consumers have more choices than ever before, while media companies face the challenge of reaching their target audiences across an ever-expanding range of platforms. This report analyzes the current situation, causes, and effects of this development.

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Definition and causes of fragmentation in the media market

The fragmentation of the media market describes a progressive splitting and diversification of the media landscape into many parallel segments. This development is not new, but has been significantly accelerated by digitization.

“The fragmentation of the media and entertainment industry has a huge impact on media consumption,” Adobe states in its analysis. One of the most important consequences is a significant “shift in power away from media and entertainment companies” and toward consumers, who “decide for themselves which content they want to consume, when, and where.”.

This development is driven by several factors:

Digitalization and technological progress

Digitization has drastically reduced the production and distribution costs of media content and lowered the barriers to market entry for new providers. At the same time, new technologies enable media consumption independent of time and location.

Multiplication of the supply

The number of available TV channels and streaming services is constantly growing. While previously there were only a handful of television channels, today there are dozens of linear programs and numerous streaming platforms available.

Mobility and flexibility of use

Mobile devices allow media content to be consumed anywhere and anytime. “In fact, studies by Adobe Digital Insights show that consumers are increasingly watching television outside their living rooms. And this trend is growing stronger.”.

The current situation of the television market in Germany

The German television market is showing increasing fragmentation, although the major public broadcasters continue to dominate.

TV channel market shares

In 2024, ZDF achieved its highest market share since 1994, reaching 15.3 percent among the total audience. ARD followed with 13.0 percent. Among the private broadcasters, RTL led with 8.1 percent, followed by VOX and Sat.1.

In the advertising-relevant target group of 14- to 49-year-olds, the distribution looks different: Here, RTL achieved the highest market share with over ten percent, followed by ARD with 9.4 percent.

The current market shares illustrate a long-term trend: While the major broadcasters continue to lead, many of them have lost significant market share over the last 20 years

• The first channel lost more than two percentage points
• RTL even lost seven percentage points
• Sat.1 and ProSieben each lost at least five percentage points

Decline of linear television

The ARD/ZDF media study 2024 shows a significant decline in linear television viewing. The daily reach of linear television programming fell by 6 percentage points to 58 percent among the target audience. This trend is particularly pronounced among younger viewers

• Among 14- to 29-year-olds, only about one in four (24%) still watches linear television daily (a decrease of 10 percentage points)
• In the 30 to 49 age group, the daily reach fell by 10 percentage points to 43 percent

A Nielsen study confirms this trend and concludes that in 2024, the use of streaming services in Germany was higher than that of linear television for the first time.

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The growing streaming market in Germany

The streaming market in Germany is experiencing considerable growth. According to Statista, revenue in the video-on-demand market is estimated at approximately €5.96 billion for 2024, representing an increase of about 10.4% compared to the previous year.

Market shares of streaming services

The German streaming market is currently dominated by two major providers:

• Amazon Prime Video leads Netflix by approximately 2 percent
• Disney+ follows at a considerable distance, leading Apple TV+ and WOW by 12 percent

In terms of newly concluded streaming subscriptions in the third quarter of 2024, Amazon Prime Video recorded the largest market share with around 17 percent, followed by Disney Plus and Netflix with approximately 14 percent each.

Growth and user numbers

The number of streaming video-on-demand subscribers in Germany has risen sharply in recent years:

• From 15.0 million in 2019 to 21.1 million in 2023 (an increase of over 40 percent)
• Further growth is expected for 2024
• Statista predicts that the number of video streaming users in Germany will rise to 41.8 million by 2027

According to Nielsen, 77% of Germans use video streaming services weekly, representing an increase of 7 percentage points compared to the previous year and 13 percentage points over the last three years.

Streaming usage varies greatly by age group:

• 92% of 18-34 year olds use streaming services weekly
• The largest annual increase is in the 35- to 54-year-old age group, with a rise of 10 percentage points to 83%
• An increase of 8 percentage points compared to the previous year can also be observed among 55- to 69-year-olds

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Factors influencing the streaming market

A key factor influencing the German streaming market was the abolition of the ancillary cost privilege in July 2024, which ended the practice of automatically billing cable connection costs through ancillary rental costs. Many households faced the decision of either signing their own contract or using alternative services, which led to a significant increase in streaming subscriptions.

Impact on consumer behavior

The fragmentation of the media market has profound effects on consumer behavior.

Changed usage habits

The ARD/ZDF Media Study 2024 shows that the fragmentation of media consumption will continue in 2024, with daily reach and usage times for all media categories declining slightly. The decline is particularly pronounced for linear media, while non-linear offerings remain relatively stable or even grow.

The change is particularly pronounced among younger users:

• Among the target group of 14- to 29-year-olds, the daily reach of music streaming services (54%) has been higher than that of traditional radio (37%) for the third year in a row
• The 30 to 49 age group shows the largest increase in the use of music streaming services, from 17% to 27%

Challenges for users

Fragmentation brings not only advantages but also challenges for consumers:

“The main problem from a user's perspective is the fragmentation of the market. Those who want to stream often have to invest a lot of time to find content they like,” said Michael Schmid in an interview with WirtschaftsWoche.

This leads to a higher churn rate for streaming services: “Three out of four streaming users canceled at least one of their subscriptions last year […]. Around half even canceled two or more streaming subscriptions.”.

Overlaps and stable usage patterns

Despite the fragmentation, stable usage patterns are also emerging:

“However, the assumption of a pronounced fragmentation of the audience should also be critically examined. Significant overlaps exist between different media and media offerings, and thus, in turn, shared audiences.”.

“Furthermore, consumers develop stable usage routines that are similar for large groups of consumers and are likely to change only slowly.”.

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Challenges for media companies and advertisers

Increasing fragmentation presents media companies and advertisers with complex challenges.

Monetization and advertising revenue

“This power shift hits media companies at a very sensitive point – advertising revenue. Monetization can become a challenge when your own content has to be made available on all platforms and channels used by your target audience.”.

Fragmentation makes it more difficult to achieve broad reach, which puts pressure on the traditional advertising model. At the same time, it offers the opportunity for more targeted advertising to specific audiences.

Measurement and analysis of media usage

“Media fragmentation is greater than ever, and agencies are looking for unified tools to measure and reach fragmented target groups.”.

New measurement and analysis instruments like Nielsen ONE are being developed to:

• To standardize cross-media measurement for agencies
• To achieve greater range
• Predicting future audience trends

Strategies for a fragmented media landscape

Adobe recommends six measures for media companies to succeed in the fragmented media landscape:

1. “A cross-channel or cross-device strategy is more important than ever before.”
2. “Capture, consolidate, and manage online and offline audience data.”
3. “Provide personalized experiences at all touchpoints at the right time.”
4. “Manage the customer journey, from anonymous prospect to loyal advocate.”
5. “Older measurement tools don’t capture viewers at all touchpoints. And what isn’t captured can’t be used.”
6. "Earn customer loyalty through outstanding content and experiences."

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Social and political implications

The fragmentation of the media landscape also has social and political consequences.

“The fragmentation of the public poses a particular challenge for the political system, because its continued existence depends on a certain basic social consensus.”.

The increasing spread of specialized content and the formation of separate sub-audiences can lead to a “Balkanization” of public discourse, in which common points of reference are lost.

“To prevent the fragmentation of the public, the political system must therefore resort to increased communication management, which actively attempts to influence the communication of politics and socially relevant topics.”.

Outlook and future developments

The fragmentation of the media market is expected to continue in the coming years, albeit with some differentiating aspects.

Continuation of the trend towards non-linearity

“Due to the declining use of linear media, it can be assumed that the media landscape will become even more fragmented in the future. This development leads to users' attention being distributed across many different channels.”.

The continued existence of linear media

Despite fragmentation, linear media remain relevant: “Even though the use of classic linear media is steadily declining, both linear television programming and classic radio remain by far the most used offerings within their respective genres.”.

“Despite the overabundance of media and the increasing fragmentation, significant usage shares can still be recorded for classic linear TV.”.

Opportunities through personalization

Fragmentation also offers opportunities: “Fragmentation makes marketing more complex, not simpler. The great opportunity: to get closer to and better reach the target groups.”.

The increasing personalization of content and advertising allows for more precise targeting of audiences and can lead to higher relevance and engagement.

Data-driven and flexible: Media innovation in the age of platform diversity

The fragmentation of the television and streaming market is a multifaceted phenomenon with far-reaching implications for consumers, media companies, and society as a whole. While it offers consumers more choice and flexibility, it also presents media companies with the challenge of monetizing their content across multiple platforms and reaching their target audiences.

The trend towards fragmentation is expected to continue, with non-linear media gaining further importance. At the same time, linear media will play a significant role, especially for older audiences and for events with broad societal relevance.

For media companies, the future lies in cross-media strategies that encompass both linear and non-linear offerings and are tailored to the specific needs of different target groups. Success will increasingly depend on their ability to leverage data to deliver personalized experiences across all platforms while simultaneously managing audience fragmentation.

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