“AVOD Services Market is Estimated to Witness High Growth Owing to Continuous Technological Advancements”

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The advertising-based video on demand (AVOD) services market has demonstrated immense growth in recent years. AVOD services provide free access to video streaming content supported by advertisements. Major advantages of AVOD services include on-demand access to a large variety of movies, TV shows, live sports, and other entertainment content without additional subscription costs. With rising internet penetration and affordable availability of smartphones and other smart devices, AVOD services have emerged as a widely popular alternative to traditional pay TV. Rapid increase in the number of cord cutters and cord-nevers has driven significant demand for affordable streaming options.

The Global AVOD Services Market is estimated to be valued at US$ 28.09 Bn in 2024 and is expected to exhibit a CAGR of 14% over the forecast period 2023 to 2030.

Key Takeaways

Key players operating in the AVOD services market are YouTube (Google), Hulu (Disney), Peacock (NBCUniversal), Tubi (Fox Corporation), Pluto TV (ViacomCBS), IMDb TV (Amazon), Roku Channel (Roku), Crackle (Chicken Soup for the Soul Entertainment), Xumo (Comcast), Vudu (Walmart), The Roku Channel (Roku), Popcornflix (Screen Media Ventures), MX Player (Times Internet), Voot (ViacomCBS).

The key opportunities in the market include increasing availability of premium content from major studios on AVOD platforms and ability to target niche audience segments based on user behavior analysis. Personalized content recommendations and targeted advertising are enabling platforms to enhance viewer experience.

Continuous updates to streaming technology, including support for higher video quality formats, improved UI/UX for better content discoverability, and expanded device compatibility are expanding the reach and popularity of AVOD services.

Market drivers: The primary driver for the growth of the AVOD market is the rising number of cord cutters and cord nevers who prefer affordable entertainment options compared to paid cable/satellite television subscriptions. Growing millennial population with higher acceptance of streaming as their primary entertainment medium also contributes to market growth. Increasing smartphone and internet penetration worldwide has enhanced the accessibility of AVOD platforms.

The AVOD Services Market is expected to witness high growth owing to continuous technological advancements which are improving user experience and helping target niche audience segments. Rising popularity of streaming as the preferred entertainment medium also drives the demand for affordable, advertising-supported options.

Current Challenges in AVOD Services Market

The AVOD services market is facing challenges due to the high cost of content creation and increasing competition from global players. Producing high-quality original content requires significant investment which puts pressure on operating margins. At the same time, users have many options and they can easily switch to other platforms if not satisfied with content or user experience. Retaining existing users and attracting new subscribers is a persisting challenge. Monetizing content through advertisements alone is also difficult as ad revenues may not cover rising content costs over the long run. Platforms need to effectively balance ad loads to enhance monetization without compromising the viewing experience. Data privacy and security have also emerged as major concerns for users which need to be addressed.

SWOT Analysis
Strength: Large user base and subscriber growth gives economies of scale for content spending; Strong brand recognition and loyalty for some major players.
Weakness: Heavy reliance on third party content for some players limits control over library; Fragmentation across multiple platforms causes consumer confusion.
Opportunity: Expanding TV advertising market presents ad sales upside; Growing SVOD market penetration indicate potential for bundling AVOD and SVOD subscriptions.
Threats: Stiff competition from global streaming giants with bigger budgets; Shifts in consumer behavior like cord-cutting pose challenges to traditional TV model.

Geographical Regions
Currently, North America accounted for the largest share in the global AVOD services market in terms of value due to high broadband and smartphone penetration coupled with widespread adoption of digital platforms. The US is a major consumer market for on-demand video content. However, Asia Pacific is emerging as the fastest growing regional market driven by increasing digital connectivity and usage in densely populated countries like India and Indonesia. Latin America is also witnessing higher uptake of affordable smartphones and data plans facilitating the growth of AVOD platforms.

The fastest growing region for AVOD services in terms of value over the forecast period is expected to be Asia Pacific excluding Japan. Rapid urbanization, rising incomes, and growth in digital infrastructure across populous nations will expand the potential audience base and spending power. Local content creation is helping platforms attract diverse users. Favorable demographics with young target groups and their openness to digital transformation present a strong foundation for continued expansion of AVOD models.

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  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it