What is AVOD?
AVOD is an acronym for Advertising-Based Video on Demand which provides FAST (Free Ad-Supported TV) services to users, allowing them access to a library of video content in return for embedding must-watch ads in between the streams.
In contrast to the Transactional video on demand (TVOD) and Subscription video-on-demand (SVOD) monetization models, AVOD provides streaming access for free. Rather, AVOD monetization leverages advertising revenues to support broadcasters and video platforms and ensure future content. YouTube is by far the most well-known AVOD platform today.
How does AVOD work?
AVOD platforms are similar to traditional television, where streaming content is interspersed with ads to create a revenue stream. Viewers are expected to sit through advertisements in order to continue streaming content. You may have come across an ad-based video on platforms like YouTube, Hotstar, Hulu, Tubi, or The Roku Channel.
Even DailyMotion, Facebook Watch, IMDB TV, etc., leverage AVOD monetization to offset video production costs.
AVOD vs TVOD vs. SVOD
While AVOD is free to all users, it doesn't generate revenue at par with SVOD and TVOD. Plus, most content platforms prioritize providing a smooth streaming experience without disruptions and, thus, avoid an AVOD monetization model. So, if you regularly publish premium content and are confident users will subscribe to your platform, A SVOD or TVOD model is better suited for you.
However, many media companies are now returning to the AVOD model. For instance, a huge chunk of The Roku Channel's revenue comes from AVOD. Today, AVOD is typically used in conjunction with the SVOD model to maximize revenue.
AVOD Use Cases
AVOD is widely popular among TV channels, apps and video platforms where user-created videos are published. Among the major AVOD service providers are YouTube, Hotstar, Hulu, Tubi, The Roku Channel, Facebook Watch, Peacock, IMDb TV and more.