Report: AVOD Revenue Will Nearly Triple by 2028 Thanks to Disney+, Netflix
Report: AVOD Revenue Will Nearly Triple by 2028 Thanks to Disney+, Netflix
It has been fascinating to follow the track of streaming services since they first became a major force in the entertainment landscape. When they originally began to disrupt the industry, the idea behind streaming was to be the opposite of the traditional linear TV experience: no ads, no scheduled viewing, and no hefty contracts to try and get out from under.
But as the Streaming Wars have brought maturity to the subscription video-on-demand (SVOD) market, more companies with streaming services have decided to bring back elements of the linear TV experience for both financial and customer experience reasons. Ad-supported video-on-demand (AVOD) is making huge gains in the streaming market, so much so that a new report from Digital TV Research suggests global AVOD revenues will rise from $38 billion in 2022 to $91 billion in 2028.
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The numbers from Digital TV Research suggest that Disney will be the biggest beneficiary of this revenue boost, as its two ad-supported streamers Disney+ and Hulu will account for $14 billion in combined yearly returns. Disney has not even launched its AVOD tier of Disney+ yet (coming Dec. 8), so the projections represent how confident the market is in the success of that new price plan. Overall, according to the report, by 2028 there will be 15 platforms generating AVOD revenues in excess of $1 billion, including six globally, five from the U.S., and three from China.
Netflix is the only other platform forecasted to reach $5 billion or more in revenue by 2028, so the report foresees tremendous growth in the future. Digital TV Research credits the revenue spikes coming to what it calls “hybrid tiers,” like Netflix and Disney+ have chosen to launch. These are AVOD plans that look a lot more like SVOD tiers, with relatively low ad-loads and a focus on not badgering customers with the same ads over and over again.
“An exciting development will be the global rollout of hybrid AVOD-SVOD tiers by major platforms such as Netflix, Disney+, HBO and Paramount+,” Digital TV Research principal analyst Simon Murray said. “These four platforms [including Hulu] will generate AVOD revenues of $22.6 billion by 2028 – or a quarter of the world’s total.”
The numbers may sound outlandishly high, but they are a bit low compared with other research done earlier this year. A report from August suggested that Netflix could see $5.5 billion in new revenue by 2027 from the ad-supported tier it launched on Nov. 3, suggesting that the company is surely due for a windfall in the coming years.
The U.S. AVOD market is just beginning to heat up, and there’s a lot of room to grow. A survey from earlier this month showed that 37 million U.S. customers now use ad-supported streaming. That number is due to skyrocket in the next year thanks to the AVOD plans at Netflix and Disney+, and according to Digital TV Research, they’ll be raking in cash as well.
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Netflix
Netflix is a subscription video streaming service that includes on-demand access to 3,000+ movies, 2,000+ TV Shows, and Netflix Originals like Stranger Things, Squid Game, The Crown, Tiger King, and Bridgerton. They are constantly adding new shows and movies. Some of their Academy Award-winning exclusives include Roma, Marriage Story, Mank, and Ma Rainey’s Black Bottom.
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Disney+
Disney+ is a video streaming service with over 13,000 series and films from Disney, Pixar, Marvel, Star Wars, National Geographic, The Muppets, and more. It is available in 61 countries and 21 languages. It is notable for its popular original series like “The Mandalorian,” “Ms. Marvel,” “Loki,” “Obi-Wan Kenobi,” and “Andor.”