What is AVOD and How Does it Fit into the Streaming Landscape?
AVOD (Advertising-based Video on Demand) refers to streaming services that provide viewers with free access to a library of movies, TV shows, and other video content, with the operational costs supported by advertisements shown before, during, or after the content. It’s a key segment of the OTT (Over-the-Top) market, alongside SVOD (Subscription Video on Demand) and TVOD (Transactional Video on Demand). Popular examples include services like Tubi, Pluto TV (which also has FAST Channels), Peacock’s free tier, and YouTube.
How AVOD Services Work
AVOD platforms acquire licenses for content or produce their own, making it available for users to stream without a subscription fee. Users select specific content they wish to watch from a catalog, similar to SVOD services like Netflix, but must watch periodic ad breaks. These ads are the primary revenue source for AVOD providers, allowing them to offer content for free to the end-user. This model is attractive to audiences looking to reduce their entertainment spending or supplement their existing subscription services.
Who Benefits from the AVOD Model?
Viewers benefit from free access to a wide variety of content, from classic movies and TV shows to newer releases and niche programming. Advertisers gain access to a growing and engaged audience on Connected TV (CTV) and other devices, often at potentially more efficient CPMs (Cost Per Thousand Impressions) compared to some other video environments. Content Creators and Owners find new avenues to monetize their libraries and reach broader audiences who might not pay for subscriptions.
Advertising Opportunities in AVOD
AVOD platforms offer valuable inventory for video advertising campaigns. The ad experience is similar to traditional broadcast TV, making it familiar to viewers. Many AVOD services are integrated into programmatic advertising ecosystems, allowing for targeted ad delivery based on various data points, although the level of targeting can vary. This makes AVOD a crucial component for modern TV media buying strategies that incorporate digital video.
The Growth and Appeal of AVOD
The rise of AVOD is driven by several factors. “Subscription fatigue” leads consumers to seek free alternatives as the number of paid streaming services proliferates. AVOD also caters to budget-conscious viewers. The increasing availability of quality content on AVOD platforms, including originals and exclusives, further boosts their appeal.
As more viewing shifts to streaming, AVOD provides a scalable way for advertisers to reach these audiences. Understanding the nuances of platforms like The Roku Channel or Amazon Freevee (as they are also retail media networks with AVOD components) is becoming increasingly important.
AVOD in a Global Context
The adoption and popularity of AVOD services vary by region. In some international markets, AVOD may be a primary way for audiences to access a wide range of streaming content, especially where disposable income for multiple subscriptions is limited. Local AVOD players often emerge, catering to specific language and content preferences. For global brands, an international media planning and buying agency can help identify the most effective AVOD platforms in different countries.
Pro Tip: When advertising on AVOD, consider the context of the content your ad appears alongside. Aligning your brand with relevant programming can enhance ad receptiveness and impact. Also, leverage the data capabilities of AVOD platforms to refine targeting and measure performance effectively.