In today’s digital dynamic landscape, streaming services have become an essential component of our entertainment consumption. Among the various models that govern these services, AVOD, or Advertising Video-on-demand, stands out as a popular and influential approach.
This comprehensive guide explores what is AVOD, the diverse options available, how it works, and its relevance in the streaming business landscape.
What is AVOD?
Advertising Video On-Demand (AVOD) is a streaming model that allows users to access free content supported by advertisements. The AVOD market is predicted to reach around US$41.13 billion by 2023. It’s expected to have a 10.38% compound annual growth rate from 2023 to 2028, resulting in growth in a market volume of $67.40bn by 2028.
Source: (Statista)
Unlike subscription-based models, where users pay a fee to enjoy ad-free content (SVOD – Subscription Video on-demand), AVOD relies on advertising revenue to sustain itself. This model provides a cost-free experience for users, making it an attractive option for those who prefer not to pay for content.
Various AVOD Options to Choose From!
One of the main features contributing to the success of AVOD platforms is the variety of available ad formats. Publishers can strategically choose from different ad types to enhance the viewing experience for users while maximizing the effectiveness of their advertising campaigns.
Pre-roll Ads: Setting the Stage
Pre-roll ads are popular among publishers as they play before the selected video starts. This format takes advantage of users’ anticipation, capturing their attention while maintaining a non-intrusive viewing experience. By engaging users right from the beginning, pre-roll ads can effectively convey the advertiser’s message without disrupting the flow of the content.
Mid-roll Ads: Finding the Right Balance
Mid-roll ads introduce a different approach by pausing the chosen video part way through to advertise. While this may interrupt the viewing experience, strategic placement, appropriate length, and frequency can make mid-roll ads effective. This format is particularly advantageous when targeting a captivated audience, ensuring the interruption adds value rather than causing frustration.
Post-roll Ads: Capturing the Aftermath
Appearing when the user’s selected content concludes, post-roll ads require immediate attention to combat the risk of viewers disengaging. Though there is a potential user drop-off after the main content, a compelling and attention-grabbing post-roll ad can still leave a lasting impression. Publishers must create content that retains user interest after the leading video ends.
Display Ads: Beyond Video Content
AVOD platforms extend their advertising reach beyond video content through display ads. Unlike other formats directly attached to a video, display ads are visible on the platform. This versatility allows publishers to showcase advertisements in various locations on the platform, increasing the chances of user interaction and engagement.
Banner Ads: Subtle Yet Impactful
Banner ads provide a less intrusive option by being placed across the top, bottom, or sides of a video while it plays. This format allows for subtle yet impactful advertising, ensuring that users remain engaged with the streaming content while being exposed to the promotional message. Strategic placement is critical to making banner ads effective without overshadowing the main content.
Interactive Ads: Engaging the Audience
Embracing modern trends, interactive ads encourage viewers to engage with the content actively. This could involve playing a mini-game, participating in a poll, or interacting with the advertisement in other ways. By making the advertising experience interactive and enjoyable, publishers can create a positive and memorable interaction with their audience.
Different AVOD Platforms
Check the list of some prominent AVOD (Advertising Video On Demand) platforms right below:
YouTube: One of the largest and most popular video-sharing platforms globally, offering a wide range of user-generated and professional content supported by ads.
Hulu: A streaming service that combines AVOD with SVOD (Subscription Video On Demand), providing various content, including TV shows, movies, and original programming.
Peacock: NBCUniversal’s streaming service offers a mix of movies, TV shows, news, sports, and more, with free (AVOD) and premium subscription (SVOD) options.
Pluto TV: A free streaming service with various live channels and on-demand content across different genres, supported by ads.
Tubi TV: An ad-supported streaming service offering a diverse library of movies and TV shows across genres.
Crackle: A free streaming service owned by Chicken Soup for the Soul Entertainment featuring a selection of movies, TV shows, and original content.
IMDb TV: Amazon’s free streaming service, offering a mix of movies and TV shows supported by ads.
Roku Channel: A platform offering various free ad-supported content, including movies, shows, and live TV.
Vudu: While primarily a transactional VOD (TVOD) platform, Vudu offers a selection of free as well as ad-supported movies and TV shows.
There are more like XUMO, Crunchyroll, Redbox Free Live TV, Samsung TV Plus, Twitch, Popcornflix, and more. Remember to check the availability of these AVOD platforms in your geographical region, as they may vary.
How Does AVOD Work?
Advertising Video-on-demand operates as a business model where advertisers pay to showcase their ads before, during, or after video content. This approach lets content creators monetize their offerings without requiring viewers to pay for access. AVOD has become a prevalent model for streaming services, websites, and mobile apps that provide video content.
Ad Insertion Methods in AVOD:
Client-Side Ad Insertion:
Client-side ad insertion involves inserting ads directly into the video stream on the viewer’s device. Here’s how it works:
Client-Side Player: A software program known as a client-side player operates on the viewer’s device. This player is responsible for seamlessly integrating ads into the video stream.
Real-Time Ad Insertion: This method is particularly effective for live streaming services, enabling real-time ad insertion. Advertisers can target specific demographics or geographic areas and update their ads on the fly.
Dynamic Ad Insertion: The flexibility of client-side ad insertion allows for dynamic ad insertion based on the viewer’s location, device, and other preferences.
Pros and Cons of Client-Side Ad Insertion:
Pros:
Flexibility and Control: Offers a high degree of flexibility and control over ad targeting and delivery.
Real-Time Updates: Enables real-time ad updates for live streaming services.
Dynamic Ad Insertion: Allows for dynamic insertion based on viewer-specific factors.
Cons:
Internet Stability: Requires a stable internet connection; issues may arise with buffering and latency.
Complexity: This can be more complex and resource-intensive than server-side ad insertion.
Server-Side Ad Insertion:
Server-side ad insertion delivers ads by inserting them into the stream on the server side, sending the ads as part of the video stream to the viewer’s device. Here’s how it works:
Server-Side Player: A server-side player handles the insertion of ads into the video stream on the server side, simplifying the process for viewers.
On-Demand Content: This method is often used for on-demand video content, as ads do not need to be inserted in real-time.
Targeting and Personalization: Despite being less flexible, server-side ad insertion supports features like geographic targeting and dynamic ad insertion for personalized content delivery.
Pros and Cons of Server-Side Ad Insertion:
Pros:
Reliability: Can be more reliable and less affected by latency and buffering issues.
Resource Efficiency: Generally requires fewer resources and infrastructure than client-side ad insertion.
Supports Personalization: Enables geographic targeting and dynamic ad insertion.
Cons:
Less Control: Provides less control over ad delivery than client-side ad insertion.
Infrastructure Requirements: Requires a higher infrastructure level, including a server-side player, content delivery network, and ad-stitching capabilities.
Why Choose Advertising Video On Demand (AVOD) For Your Streaming Business?
For streaming businesses, AVOD presents a compelling model. It allows a platform like Netflix or others to attract a large user base by eliminating financial barriers and subsequently leveraging the accumulated user data for targeted advertising. This approach not only makes content accessible to a broader audience but also creates a sustainable revenue stream for the platform.
Disadvantages of AVOD
While AVOD has its merits, it’s essential to acknowledge its drawbacks. The primary inconvenience for users lies in the interruptions caused by ads during content consumption. This can lead to a less immersive viewing experience. Additionally, some users may prefer paying for an ad-free experience, making subscription models more appealing.
Difference Between AVOD, SVOD, and TVOD
Understanding the distinctions between AVOD, SVOD (Subscription Video On Demand), and TVOD (Transaction Video On Demand) is crucial.
AVOD relies on ads for revenue, SVOD requires users to pay a subscription fee for an ad-free experience, and TVOD involves a pay-per-view or rental model for specific content. Each model caters to different user preferences and business strategies. Explore the table to find the differences:
| Aspect | AVOD (Advertising Video On Demand) | SVOD (Subscription Video On Demand) | TVOD (Transaction Video On Demand) |
| Revenue Model | Advertisers pay for ad placement. | Users pay a subscription fee. | Users pay per view or rental. |
| User Payment | Free access to content. | Requires a subscription fee. | Pay-per-view or rental charges. |
| Ad Presence | Ads are shown before, during, or after content. | No ads; subscription ensures an ad-free experience. | No ads during the content; revenue is generated through transactional payments. |
| Access to Content | Users have free access to a range of content. | Unlimited access to the entire content library with a subscription. | Users pay for individual titles on a per-view or rental basis. |
| Content Library | Content is often diverse, with a mix of user-generated and professional content. | Extensive library with a range of movies, TV shows, and exclusive content. | Typically focuses on the latest releases and premium content available for purchase or rent. |
| Examples | YouTube, Pluto TV, Tubi. | Netflix, Hulu, Amazon Prime Video. | iTunes, Google Play Movies & TV. |
This table provides a concise overview of the differences between AVOD, SVOD, and TVOD across various aspects, including revenue models, user payments, ad presence, access to content, content libraries, and examples of each model.
How Does AVOD Differs from FAST?
FAST, or Free Ad-supported Streaming TV, is an extension of the AVOD model, specifically focusing on television-style content.
While both models offer free content with advertisements, FAST often replicates the traditional TV experience by providing a curated lineup of channels. This distinction showcases the flexibility of the AVOD model in adapting to various content formats.
| Aspect | AVOD (Advertising Video On Demand) | FAST (Free Ad-supported Streaming TV) |
| Business Model | Advertisers pay for ad placement. | Ad-supported model; relies on ads for revenue, similar to AVOD. |
| User Payment | Free access to content supported by ads. | Free access to content supported by ads. |
| Content Library | Diverse content, including user-generated and professional content. | Curated channels with a TV-like experience, often with live programming. |
| Ad Placement | Ads are inserted before, during, or after content as per AVOD standards. | Channels have ad breaks, and ads are inserted during these breaks, mimicking traditional TV advertising. |
| Flexibility | Offers flexibility in content selection, allowing users to choose from a variety of options. | Provides a linear and scheduled programming experience, similar to traditional TV. |
| Examples | YouTube, Hulu, Pluto TV. | Samsung TV Plus, Peacock’s free tier. |
This table outlines the differences between AVOD (Advertising Video On Demand) and FAST (Free Ad-supported Streaming TV) across various aspects, including business models, user payments, content libraries, ad placement, flexibility, and examples of each model.
Is AVOD the Right Model for Content Distributors (Publishers)?
Content distributors and publishers must carefully consider their target audience and business goals when choosing a streaming model. AVOD is effective for reaching a broad audience, but it may not be suitable for premium or niche content that requires a subscription model. Evaluating the content, target demographic, and revenue goals is crucial in determining the right model.
How Different Industries Are Benefiting from AVOD?
Various industries are leveraging AVOD to reach their target audiences effectively. From entertainment and news to education and lifestyle, AVOD platforms offer a versatile platform for advertisers. The ability to tailor ads based on user preferences and demographics enhances the effectiveness of advertising campaigns across different sectors.
Future of AVOD Services?
As technology evolves, so will the advertising landscape of streaming services. The future of AVOD services looks promising, with advancements in data analytics, targeted advertising, and user personalization. As more users embrace free, ad-supported content, AVOD is likely to play a pivotal role in shaping the future of digital entertainment.
Ending Note
Now, you might have a clear idea about what is AVOD. Advertising Video-on-demand is a pivotal force in the streaming industry, revolutionizing how users access and enjoy content by providing free advertising-supported access.
In this dynamic digital landscape, AVOD has proven adaptable and sustainable, offering a viable model for users and content distributors. The decision to embrace AVOD as the preferred choice for a streaming business hinges on carefully considering factors such as content nature, target audience, and revenue objectives.
As the digital entertainment realm continues its transformative journey, AVOD remains a compelling option, fostering a harmonious relationship between content creators, users, and advertisers. The synergy created by this model allows for the creation of diverse, engaging content while ensuring a cost-free experience for viewers.
At Alphanso Technology, we recognize the significance of AVOD in shaping the future of streaming platforms. Leveraging our expertise, we specialize in developing advanced video streaming platforms that seamlessly integrate AVOD functionalities. If you want to invest in a cutting-edge video streaming platform capable of supporting AVOD and unlocking new avenues for monetization, Alphanso Technology is your trusted partner.
For inquiries and further information on how we can help you realize your vision for a successful AVOD-supported streaming platform, please contact us at sales@alphansotech.com. Our team is ready to collaborate with you to bring your streaming business to new heights in the evolving digital entertainment landscape.
Frequently Asked Questions
What is AVOD?
AVOD stands for Advertising Video-on-demand, a business model in which users can access video content for free, and the platform generates revenue by displaying advertisements during or around the content.
How does AVOD differ from other streaming models?
AVOD differs from Subscription Video On Demand (SVOD) by offering free ad access, while SVOD requires a subscription fee for an ad-free experience. AVOD differs from Transaction Video On Demand (TVOD), where users pay per view or rental.
What types of ads are commonly used in AVOD?
Common ad types in AVOD include pre-roll ads (before content), mid-roll ads (during content), post-roll ads (after content), display ads (on the platform interface), banner ads (within the video player), and interactive ads.
Can Alphanso Technology customize AVOD platforms for specific business needs?
Yes, Alphanso Technology specializes in developing customizable video streaming platforms that support AVOD. We work closely with our clients to tailor solutions that align with their unique brand goals and requirements.
How can I get in touch with Alphanso Technology for AVOD platform development?
For inquiries and information on developing a state-of-the-art AVOD-supported streaming platform, contact Alphanso Technology at sales@alphansotech.com.
Does Alphanso Technology provide ongoing support and maintenance for AVOD platforms?
Yes, we offer comprehensive support & maintenance services. Our team is available to address any issues, implement updates, and provide technical support as needed.
How long does developing an AVOD platform with Alphanso Technology typically take?
The development timeline can vary based on specific requirements and features. Our team works efficiently to deliver high-quality AVOD platforms, and timelines are determined after thoroughly understanding the project scope and goals.
Is Alphanso Technology experienced in compliance with industry regulations for AVOD platforms?
Yes, our team is well-versed with all the industry regulations and compliance standards. We ensure that AVOD platforms developed by Alphanso Technology adhere to legal and regulatory requirements, providing a secure & trustworthy environment for users and advertisers.