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34% of Consumers Use AVOD Services, Streaming Device Popularity Accelerates

Aubrey Meister

A new report from Ampere Analysis shows the popularity of ad-support video-on-demand is continuing to grow. Platforms like Pluto TV, Tubi, and Roku Channel offer free streaming but show ads to bring in revenue, which is appealing to consumers who want to save money without compromising on content.

Ampere’s report found that in the past month, 34% of domestic internet users have used an AVOD service. In Q3 2020, just 17% of internet users had tried an AVOD service. AVOD usage is growing fastest in young audiences in the 18-to-24 bracket. In Q3 2021, 30% of those younger users had used AVOD services, compared to just 9% a year ago.

“The growth in AVOD usage partly reflects how expensive the streaming market is becoming,” Ampere analyst Minal Modha said in a statement. “The fact that younger audiences are now engaging with AVOD will be welcome news for platform owners and will make the services even more attractive to [advertising] brands.”

In the streaming world, AVOD services aren’t alone in their success. Streaming devices are also picking up more users as people choose to cut the cord. Many consumers are purchasing Roku, Google Chromecast, Amazon Fire TV, Apple TV, and other devices to stream content from their favorite platforms. These devices have become so popular that almost two-thirds of U.S. internet-connected homes have them. Compared to 2019’s third-quarter reports, streaming device ownership has grown by 18%, likely accelerated by the pandemic.

Streaming devices give consumers easy access to SVOD and AVOD services all in one place. With app stores on these devices showcasing the AVOD and SVOD apps available to download, audiences can discover even more free or cheap streaming options.

As consumers cut the cord, buy streaming devices, and create their own bundles of various services, they are looking for ways to keep costs down. While many people are choosing to stream content rather than pay for a cable TV subscription, the vast selection of streaming services from which to choose can leave them with a high bill. AVOD services are a great alternative, giving audiences access to programming at no cost. Another Ampere Analysis study from August shows that people don't mind watching ads, especially if they can save money on a streaming service. Some services are free with ads, while other services offer ad-free and ad-supported tiers. For one, Hulu charges $6.99 per month for its ad-supported tier and $12.99 per month for ad-free streaming.

In August’s Ampere Analysis report, the fastest-growing age bracket for AVOD usage was folks between 55 and 64. At the time, Ampere analyst Tom Bell said, “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.” Based on the most recent report, it appears that The Roku Channel, Tubi, Pluto TV, and others are continuing to make the right moves by sparking younger audiences’ interest in their content.

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