2019 was the year of SVoD (Subscription supported Video on Demand), from surging subscriber bases, significant platform launches and increased competition. Now, early industry forecasts are predicting this is the year for AVoD (Advertising supported Video on Demand).
AVoD – Ad based VoD is a free for consumer service, providing streaming content supported by advertisements. It is more comparable to traditional cable TV services as opposed to platforms such as Netflix or Disney+. AVoD’s impact has been relatively small up to this point as compared to other VoD platforms. At the time of writing, it currently holds 3-6% of US online household acceptance levels.
Ampere Analysis, a London-based data analysis firm have just published statistics forecasting ad-free models will be pushing for international growth across the year. In their report, they state: “The year 2020 looks set to be the year of the AVoD platforms as services begin global roll-out and studio’s increasingly adopt hybrid (mixed pay/free) business models for their new streaming services.”
One of the main appeals for consumers of VoD services has been the removal of advertisements, be it in the form of ad-breaks or invasive cookie-led pop-ups. On top of this, VoD is relatively cheaper than traditional television, with more people cord-cutting with each passing year.
However, over the past year, and increasingly as we move deeper into 2020, the market is set to become more competitive. With more choice for the consumer than ever before, and the so called streaming wars well under way, the cost-saving benefits of streaming will continue to diminish. Here in the UK, on the horizon we have the upcoming launches of Disney+, HBO Max, Peacock and more, each boasting exclusive content. With each platform stacking on top of one another for the consumer, the monthly costs will begin to reflect that of traditional television. Eyes will begin to look elsewhere, and perhaps AVoD will be the solution.
The AVoD marketplace is certainly growing, with the likes of Amazon already operating an AVoD platform through its IMDb brand. Plus, you have the likes of PlutoTV, which was acquired by Viacom in 2019 for $340m – its certainly not a drop in the ocean. With more choice come a more competitive market, to the consumers benefit, encouraging AVoD platforms to continue to push their content.
Advertisements can be a hard pill to swallow for many consumers, with many happily paying to ensure their removal – note YouTube Premium. But just how much will we pay for each month, from streaming platforms, apps, music providers and more, that pill may start to seem less daunting.