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How Ad-Supported Video On Demand (AVOD) is Revolutionizing Content

Wed, Jul. 12, 2017 | By: Tremor Video

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There's no denying that video on demand is transforming the way we consume content. Increasingly, consumers are choosing streaming video services over the linear TV they watched in the past. Media company Axios recently reported that cord-cutting is expected to increase considerably this year among 16 to 64-year-olds. "The trend reflects consumers' preferences to ditch bundled cable packages for more affordable, niche bundled services that can be accessed on TV box tops or on mobile," the company wrote.

These include advertising-based video on demand offerings, also known as AVOD. Consumers gravitate toward AVOD services because of their flexibility and affordability, but also because of the programming that's available. Ad-supported video on demand platforms like Pluto TV, Sling TV, and Vimeo are doing their part to establish AVOD as a go-to for first-class video content.

The ABCs of AVOD

AVOD differs from other forms of streaming video like SVOD — subscription video on demand services, including Netflix — in that ads are delivered in exchange for content. There are a lot of consumer benefits to engaging with this model. Besides being accessible anywhere and anytime, AVOD can stream premium programming, both existing and original. Watch a few ads, and you get a near-endless supply of entertaining and educational videos.

Increasingly, AVOD users are also finding there are many more options at their disposal than YouTube alone. Streaming service Pluto TV recently struck deals with Lionsgate, MGM, and Warner Bros. that will bring thousands of TV shows and feature films to viewers, including acclaimed movies like The Usual Suspects and Thelma & Louise. Another of its recent distribution agreements, this time with Gravitas Ventures, will deliver access to an additional 2,000 titles — the equivalent of about 5,000 hours of programming. Pluto TV has content partnerships with publishers like CNN, CNBC, and Mashable as well.

Another alternative is Sling TV, which does require a subscription but positions itself as a TV service for cord-cutters. It features popular channels like NBC, FX, TBS, and Viceland, along with the same kind of commercial breaks that viewers find on linear TV.

Quality Programming, Quality Ads

The question on the minds of marketers, of course, is how consumers respond to the ads they see on these platforms. The answer might surprise you. A new survey from the Interactive Advertising Bureau (IAB) found that 50 percent of consumers would sooner watch commercials while streaming video to their TVs than opt to pay for a subscription. More than 30 percent believe those commercials are a cut above the ads found on traditional TV, calling them both "better" and "more memorable."

IAB research also shows that more consumers feel this way today than they did in 2015. For many AVOD viewers, it seems, streaming video is synonymous with higher quality ads.

What this tells us is that the AVOD opportunity is something that marketers must not overlook. As services like Pluto TV continue to grow their catalogs, more internet users will log on to experiment with these revolutionary streaming video services.

What they find there, both in terms of programming and advertising, is sure to make them happy they came.

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