AVOD (Advertising-Based Video on Demand) is a business model for streaming video content where the service is provided to viewers for free, and revenue is generated through the inclusion of advertisements. This is in contrast to SVOD (Subscription Video on Demand), which requires viewers to pay a monthly subscription fee to access the content.
AVOD platforms typically offer a mix of content, including movies, TV shows, and original programs, and they may also include a mix of live and on-demand content. The content is typically supported by advertisements, which are shown before, during, or after the video content. The advertisements may be targeted based on the viewer's demographics or interests, and the revenue is typically shared between the AVOD platform and the content creators. AVOD platforms are available on a variety of devices, including smart TVs, streaming media players, and mobile devices.
Cost benefit for viewers: AVOD usually offers viewers free usage of the platform. This can be very appealing to those who are not willing to pay for a monthly subscription fee to access video content. In fact, the number of AVOD viewers in 2022 in the United States is estimated to be around 140 million, and this number is expected to grow up to 170 million by 2026.
Monetization for content creators: AVOD platforms allow content creators to monetize their work through advertising revenue. The revenue generated from AVOD monetization is shared between the platform and the content creators. The exact terms of the revenue share may vary, but it is typically based on factors such as the number of views the content receives and the type of advertisement that is shown.
Targeted ads for advertisers: Because AVOD platforms are typically free and have a vast amount of content, it has a large number of viewer base. This can be a good opportunity for advertisers to run targeted ads based on the viewers' demographics, content preference, and behavioral data.
Interruptions: The most significant drawback of AVOD is that the viewing experience may be interrupted by frequent advertisements. This can be frustrating for viewers and may cause the them to leave the platform if the interruption frequency gets too severe.