US home entertainment spending has surged to record levels, highlighting the continued dominance of streaming in the global media landscape and offering clear signals for Australia’s rapidly evolving digital market.

According to the Digital Entertainment Group’s (DEG) Year-End 2025 report, total US consumer spending on home entertainment hit US$62.2 billion (A$95.5 billion) in 2025, up 17.4% year-on-year.

The growth was overwhelmingly driven by subscription streaming, which now accounts for more than 92% of all home entertainment spend.

The figures come as TCL this week agreed to acquire a 51% stake in Sony’s home entertainment business for A$730 million, marking a major shift as Sony doubles down on content while TCL expands its global TV footprint.

In the US, streaming alone grew nearly 20% to US$57.5 billion (A$88.3 billion), with ad-supported subscription tiers emerging as the fastest-growing segment.

Hybrid models, combining subscription fees with advertising, jumped 60.9% to US$10.3 billion (A$15.8 billion), highlighting a major shift in consumer tolerance for ads in exchange for lower prices.

The data reinforces a broader industry trend. Home entertainment is now almost eight times larger than the US box office, which generated around US$8 billion (A$12.3 billion) in 2025 despite modest recovery.

For Australian tech and media players, the implications are significant. The rise of hybrid streaming mirrors moves by Netflix, Disney+ and Amazon locally, all of which have introduced ad-supported tiers in Australia over the past two years.

Meanwhile, transactional content, including digital purchases and rentals, declined, particularly in the fourth quarter, reflecting a weaker slate of blockbuster releases.

Physical media continued its gradual decline, though premium 4K UHD formats showed resilience with 12% annual growth, driven by collectors.

Interestingly, advertising revenue from free and ad-supported streaming (AVOD and FAST) remained flat at US$22.8 billion (A$35.0 billion), suggesting monetisation challenges despite strong audience growth.

With Australians increasingly subscribing to multiple streaming platforms and embracing ad-supported options, the US trajectory offers a clear preview of where the local market is heading: more streaming, more ads and less reliance on traditional cinema and physical media.