25% of Streaming Viewers Use AVOD and SVOD Services; New Survey Says Consumers Don’t Mind Ads
When it comes to cutting the cord, consumers have many different streaming services from which to choose. They must also decide whether they want to pay for ad-supported video-on-demand (AVOD) or subscription video-on-demand (SVOD).
As streaming continues to take off, more data is becoming available, giving us more insight into consumers’ habits. A new study from Ampere Analysis shows that one-quarter of streaming consumers were using both AVOD and SVOD streaming services in 2021 Q1. In 2020 Q1, only 15% of streamers were using both types of services.
In Q1 of 2020, 2% of consumers used AVOD services, but in Q1 2021, that number jumped to 3%. The number of people using SVOD services without AVOD services decreased from 55% to 49% in the same amount of time.
There’s a good reason that more consumers are using AVOD services now. Over time, the number of people willing to watch ads while streaming has grown. Ampere’s report shows that in 2018 Q3, 37% of consumers don’t mind seeing ads while watching shows or movies. In 2021 Q1, it jumped to 46%.
Currently, the fastest-growing age bracket for AVOD subscriptions is older users from ages 55 to 64. The Ampere study notes that the pandemic seems to have pushed older users to sign up for streaming services, including AVOD.
“We can see (AVODs’) appeal with older audiences at present, but AVOD services will need to compete more directly with the content on SVOD if they want to attract the younger, more affluent audience already familiar with SVOD,” said Ampere analyst Tom Bell.
Now, AVOD companies are looking for ways to increase their audiences. With so many streaming services available, companies must set themselves apart by offering unique content and features.
“As studios are reserving an increasing proportion of their content for their own platforms, AVOD platforms are beginning to follow suit and commission their own originals. While content exclusivity remains a key difference in strategy between AVOD and SVOD platforms, these early moves into original commissioning bring AVOD players a step closer to increasing their catalog exclusivity and quality and differentiating themselves in a crowded market,” said Bell.
There is an overlap between the programming available on AVOD and SVOD platforms. Ampere's study shows that 12% of programming on SVOD services is also accessible on AVOD services for free. Part of this is due to the varying subscription tiers the services offer. For example, Peacock offers a paid ad-free tier as well as a free ad-supported subscription. A portion of the shows and movies is available to subscribers using either option, as well as Tubi, which is free.
As Bell mentioned, it’s important for companies to expand their libraries with original content that’s not available anywhere else. With the right programming to get consumers on board, we may continue to see AVOD growth. The Roku Channel appears to be focused on releasing more original content. Other companies are already making plans for original content, and plenty more are expected to do the same.