By: Sai Mahesh Vuppalapati

In the wake of the COVID-19 pandemic, as millions found themselves confined to their homes, there was a significant shift in entertainment consumption patterns toward seeking free content streaming options. This period marked a dramatic surge in popularity for Advertising-Based Video on Demand (AVOD) platforms, which were perfectly positioned to meet this newfound demand. With the pandemic accelerating the public’s appetite for accessible and diverse content, AVOD services saw unprecedented growth. Offering free access to a broad spectrum of streaming content, with advertisements seamlessly integrated, these platforms quickly became a primary source of entertainment for audiences globally. This shift not only underscored the flexibility and appeal of AVOD in providing varied viewer experiences without the cost barrier but also highlighted its significant role and resilience in a rapidly evolving entertainment landscape.

How is AVOD different from traditional streaming platforms like Netflix or SVOD? 

While the pandemic spotlighted the value of AVOD platforms in offering free, accessible entertainment, it’s crucial to understand how they differ from their counterpart, Subscription Video on Demand (SVOD) services. The primary distinction lies in their revenue models and user access. AVOD platforms provide content at no direct cost to the viewer, generating revenue through advertisements displayed before, during, or after the content. This approach allows users unrestricted access to vast content, with the trade-off being exposure to regular advertising. On the other hand, SVOD services operate on a subscription-based model, where viewers pay a monthly or annual fee for access to content without interruptions from advertisements. This model caters to users seeking an ad-free viewing experience and willing to pay for the privilege. Both models have unique advantages and cater to different viewer preferences, with AVOD appealing to those prioritizing free access and SVOD attracting those who value an uninterrupted, premium viewing experience.

How does AVOD work for free? 

Understanding the mechanics behind how advertising-based video-on-demand (AVOD) platforms can offer a plethora of free content requires a closer look at their revenue generation strategies. The cornerstone of the AVOD model is its ability to monetize viewer attention through advertising. Advertisers pay to showcase their products or services on the platform, leveraging the wide and varied audience that AVOD attracts. These advertisements are strategically placed to maximize visibility and engagement without significantly detracting from the user experience.

The revenue generated from these ads is a vital lifeline for AVOD services, enabling them to acquire, produce, and distribute content without charging the viewer. This model benefits from scale; as more viewers flock to the platform, its advertising space becomes more valuable to advertisers looking to reach a larger audience. Furthermore, advanced targeting capabilities allow AVOD platforms to offer highly personalized advertising based on user behavior and preferences, making the ads more relevant to the viewer and more effective for the advertiser. This symbiotic relationship between viewers, content creators, and advertisers powers the AVOD ecosystem, making it possible to offer a vast library of free content while ensuring profitability and growth.

Is the AVOD market growing in the USA? 

The AVOD market is indeed experiencing significant growth in the USA. According to research highlighted by IBC, ad-supported streaming services (AVOD) are being adopted faster than subscription-based services (SVOD). This is evidenced by a 29% increase in U.S. households streaming AVOD content in 2022 compared to 2020, which contrasts with a 21% increase for SVOD services during the same period. This trend suggests a shift towards budget-conscious viewing as consumers seek cost-effective ways to access content amidst rising inflation and economic pressures. AVOD’s appeal is bolstered by its ability to offer diverse and free streaming options, attracting a wide array of audiences, including significant viewership from diverse communities​.

Moreover, Digital TV Research predicts robust future growth for the AVOD sector globally, indicating a strong market presence and potential for further expansion​. This growth trajectory suggests that AVOD platforms are not only becoming a more popular choice among viewers due to their free content model but are also successfully monetizing through advertisements, making them a key player in the evolving landscape of digital streaming.

Where can interested individuals find AVOD platforms? 

Photo: Pexels.com

In the United States, Tubi, Pluto TV, and Crackle are some of the common AVOD platforms known for their comprehensive range of free content supported by ads. These platforms are recognized for their extensive collections and user-friendly access, making them suitable choices for audiences seeking entertainment without the expense. Each service boasts distinct features and a diverse content selection, appealing to various tastes.

Author Bio:

Sai Mahesh Vuppalapati is an accomplished professional from the Bay Area, CA, and is currently working as a senior manager in data and analytics product management. With over ten years of dedicated experience in Data Management and Advertising Video On Demand (AVOD) sectors, Sai’s profound expertise in Data Management and Machine Learning has been instrumental in driving growth, enhancing user experiences, and understanding the performance metrics of AVOD platforms. 

Beyond his professional achievements, Sai volunteers as a mentor and venture capital scout within the Bay Area, California tech community. His commitment to fostering the next generation of tech professionals through guidance and opportunity identification is well recognized. For individuals keen on delving deeper into Sai’s extensive experience and research within the Data and Streaming sectors, engaging with his insights on LinkedIn. 

Published by: Khy Talara