We asked: can advertising-based video on demand (AVOD) and subscription video on demand (SVOD) continue to co-exist?
Here’s what the industry had to say:
Deputy CEO, IAS MEDIA
Looking at the content consumption behaviour, AVOD and SVOD services can continue to co-exist because they offer different benefits to users.
AVOD allows users to access content for free but with ads. This type of model is appealing to consumers who are price-sensitive or interested in trying out new content without committing to a subscription. In contrast, SVOD services offer an ad-free experience with unlimited access to exclusive content. This model is preferred by consumers who desire a more personalised and seamless viewing experience without interruptions.
Either way, content platforms generate the desired revenue via ads or subscriptions. For instance, some content platforms offer the first episodes as AVOD and the rest as SVOD. Here we can see the harmony between two completely opposite business models. Ultimately, both models appeal to different types of consumers and can complement each other in the streaming industry.
VP of Growth & Strategy, OSN+
AVOD and SVOD can continue to coexist. Offering both options can expand a provider’s reach and provide more choices to viewers while still generating revenue. AVOD can attract a different audience from SVOD, including those who are hesitant to pay for multiple subscriptions or want to sample content before subscribing. Balancing the content offering between the two models is critical for driving subscriptions and retaining viewers. Ultimately, having both AVOD and SVOD propositions can complement each other and enhance the overall viewer experience.
CEO & Founder of Augustus Media
Of course, they can. It was a misconception that they never could. Netflix was the original, but the innovation doesn’t stop there. It is the same as the way you would traditionally pay for cable tv channels that have ads or pay for a newspaper or magazine with ads. That’s the same as paying for a digital subscription with ads, even with ‘on demand’. There will be nuances such as pricing models with ad-free and ad-supported tiers. With the cost of streaming, It was inevitable that we would reach this point. The only surprise was that it took this long.
Vice-President Of Business Development and Distribution for MENAT, Warner Bros. Discovery
Our goal is to provide streaming options that cater to every customer, ensuring that no one is left out. We offer premium SVOD products that are ad-free or have fewer ads in multiple markets. In addition to our premium offerings, we’re also exploring ways to bring our extensive library of content to consumers through the FAST (free ad-supported streaming) space. Our approach covers everything from SVOD to AVOD and everything in between, enabling us to reach consumers across all distribution channels. Through our omnichannel distribution and monetisation strategy, we’re maximising the overall value of our content for the benefit of our viewers.
Group Account Director, Radix Media MENA
AVOD and SVOD can and will continue to co-exist as they suit the needs of two different target audiences. While SVOD will continue to grow globally, AVOD will still meet the needs of certain audiences, especially large and diverse markets.
What will be interesting for marketers and planners is to understand the psychographics of each of these audiences. As opposed to looking at just reach figures, time spent and traffic numbers of video-on-demand platforms at large, it will be interesting to understand if your brand suits the AVOD audience now consuming the platform based on their psychographics.
Sales Director, The Mediavantage
Both these services capture different types of consumers, such as professionals who have multiple services or students who rely on an ad-funded model. Consumers will watch advertising if it means saving money on their subscription or signing up to a platform to watch the latest release of an exclusive production. Allowing passive subscribers to come and go as they please will capture an otherwise unattainable revenue stream. This will also open up a conversation with the user to subscribe via an ad-supported package, as seen with major players moving to an ad-supported plan. All streaming players need to be careful of ad fatigue for the consumer, which can be managed by capping the number of ads seen per session or piece of content.
Director – Growth & Expansion (MENA), Pivotroots
AVOD and SVOD can co-exist as both are revenue models for VOD platforms. SVOD requires a subscription fee, while AVOD offers free access in exchange for watching ads. Choosing the right model depends on factors such as content exclusivity, target audience, business goals, and market readiness. SVOD offers a dependable source of income and a loyal customer base but struggles with content retention. AVOD attracts a broad audience and easy-to-acquire customers but lacks a sustained revenue stream. Platforms are already combining models for maximum benefit. Established platforms can opt for SVOD, while new entrants can start with AVOD and eventually transition to SVOD to scale revenue and grow a loyal customer base.
Makram Abou Fakher
Business Unit Director, Havas Middle East
AVOD and SVOD can coexist as they serve distinct segments of the market. AVOD platforms offer free content and are monetised by direct advertisements, providing advertisers with an opportunity to reach budget-conscious audiences. SVOD platforms on the other hand, offer ad-free premium content for a subscription fee, with subtle advertising options such as product placement, attracting viewers who seek uninterrupted content. While both compete for viewers’ attention, their coexistence promotes healthy competition between advertisers and offers more options for viewers. It’s important we consider both platforms to ensure we make the selection that best addresses our target audience.
Chief Business Officer, Weyyak
Some SVOD global players have recently started considering or have already started offering ad-supported content to complement their SVOD service and supplement their subscription revenue. Prioritising personalising the users’ experience on the platform, delivering great content that meets their preferences, while engaging with them, and providing them with the best customer service are the major factors. driving both services’ co-existence and growth in the region. At Weyyak, we have adopted the freemium model, which has both SVOD and AVOD, and it has been working very well for us so far.
Programmatic & Partnership Director, Assembly MENA
I don’t believe there are currently many successful businesses out there that rely on only one form of revenue income.
Video on demand, free or through a subscription model, is not showing any signs of slowing down. In fact, many studies forecast that both AVOD and SVOD will continue to grow year-on-year for the next five years. Audiences on these platforms tend to be more receptive, which is extremely important to any advertiser. One of the biggest challenges for VOD providers will be to make ad breaks as enjoyable as possible for the consumer.
Regional Director, Planning & Digital Investments, UM MENA
While some people prefer an ad-free experience, others are willing to tolerate ads in exchange for free content. AVOD allows for greater reach and accessibility to content for viewers who may not have the financial means to subscribe to multiple SVOD services. On the other hand, viewers might subscribe to some SVOD for short periods to stream specific shows, not available on AVOD. There is no clear differentiation in the industry between AVOD and SVOD in terms of content apart from the ad-free experience. Therefore, both models can co-exist and serve different segments of the market.