The Ad-based Video on Demand (AVOD) services market allows users to stream films, television shows and other video content for free in exchange for watching advertisements. With the growing internet and smartphone penetration worldwide, AVOD services have emerged as a cost-effective alternative to subscription-based video streaming platforms. Key players in this space are monetizing their vast libraries of video content through in-stream video ads to drive revenue growth.
The Global AVOD Services Market is estimated to be valued at US$ 28.09 Bn in 2024 and is expected to exhibit a CAGR of 14.% over the forecast period 2023 to 2030.
AVOD services provide users with free access to premium entertainment content, which has boosted their popularity globally. With AVOD, viewers get to watch their favorite movies and TV shows without paying subscription fees. This has led to increased viewership for AVOD platforms. Additionally, many users prefer AVOD as they only have to tolerate ads to access a vast catalog of on-demand content. The services also allow users to sample content before subscribing. The growing consumption of online video on mobile devices has further spurred demand for AVOD services.
Key Takeaways
Key players operating in the AVOD services are YouTube (Google), Hulu (Disney), Peacock (NBCUniversal), Tubi (Fox Corporation), Pluto TV (ViacomCBS), IMDb TV (Amazon), Roku Channel (Roku), Crackle (Chicken Soup for the Soul Entertainment), Xumo (Comcast), Vudu (Walmart), The Roku Channel (Roku), Popcornflix (Screen Media Ventures), MX Player (Times Internet), Voot (ViacomCBS).
Key opportunities in the market include partnering with telecom operators and pay TV providers to reach larger audiences. Additionally, monetizing content in international markets presents lucrative growth prospects. Strategic acquisitions allow platforms to enhance their content libraries and subscriber bases.
Major players are focusing on global expansion to tap the fast growing international AVOD markets. Regionalized content and language support helps platforms scale across key territories like Europe, Asia Pacific and Latin America. Partnerships with local players aid international market penetration.
Market Drivers
Growing time spent by consumers on digital platforms for streaming movies and TV shows is driving the need for AVOD services. Free and easy access to premium content acts as a major value proposition fueling market growth. Increasingly affordable internet plans and smartphones have enabled access to streaming services in emerging nations.
Market Restrains
Limited monetization options and lower revenue yield per viewer compared to SVOD hinders scalable monetization through AVOD. Dependence on advertising revenues exposes players to macroeconomic risks. Additionally, stringent regulations around collection and use of user data presents challenges.
Segment Analysis
The AVOD services market is dominated by the subscription-based video on demand (SVOD) segment. The SVOD segment includes services like YouTube, Hulu, Peacock, which charge a monthly subscription fee but provide access to a large content library without any ads. This segment dominates as users are willing to pay a nominal subscription fee every month in order to enjoy an ad-free experience and access a wide range of movies and TV shows.
The transactional video on demand (TVOD) segment is the second largest. This includes services like Vudu, iTunes, Google Play Movies where users can purchase or rent movies and TV shows on a per transaction basis.
Global Analysis
The North America region currently dominates the global AVOD services market and is expected to continue its dominance over the forecast period. High internet penetration, growing consumption of OTT media content and strong presence of key players like Netflix, Hulu, Amazon Prime in the region are driving the market.
The Asia Pacific region is expected to be the fastest growing market during the forecast period. Factors such as increasing disposable incomes, growing millennial population and rising internet and smartphone adoption in countries like India and China are supporting the growth of AVOD services in the region. Countries like India and China are expected to emerge as highly lucrative markets and several global players are focusing on expanding their footprint in these regions.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
