AVOD services refer to Advertising-based video on demand. It allows users to stream videos and movies for free in exchange for viewing advertisements. AVOD platforms have a large library of on-demand movies and TV shows which provides an alternative to paid streaming platforms. The increasing internet penetration and preference towards online streaming has boosted the growth of AVOD services.
Market key trends:
One of the key trends driving the growth of AVOD services market is increasing OTT video streaming. Rising number of smartphone and internet users along with declining data costs have increased video streaming activities on mobile devices. Additionally, users prefer free streaming services over paid subscriptions due to affordability issues. Major players are investing heavily in developing their content libraries to attract new customers. For instance, Peacock TV launched with an extensive library of TV shows and movies from NBCUniversal, DreamWorks Animation, Universal Pictures etc. This will help the platform to gain new subscribers.
The global AVOD Services Market Growth is estimated to be valued at US$ 28.09 Bn in 2023 and is expected to exhibit a CAGR of 14.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Threat of new entrants: Low cost of entry and high capital requirement prevents new companies from entering the market easily.
Bargaining power of buyers: Buyers have high bargaining power due to the availability of substitutes and low switching costs.
Bargaining power of suppliers: Content creators and service providers have moderate bargaining power as they can negotiate better deals with platforms.
Threat of new substitutes: Threat from new substitutes like OTT platforms is high as they provide similar ad-supported content.
Competitive rivalry: Intense competition exists between existing players to acquire more viewers and market share.
Strengths: Wide variety of free ad-supported content and easy accessibility through various devices attract a massive user base. Existing brands and partnerships provide a significant competitive advantage.
Weaknesses: Reliance on advertisements impacts user experience. Limited ability to compete against subscription-based services in terms of content quality and features.
Opportunities: Growing cord-cutting trend and increasing smartphone/internet penetration in developing markets will expand the target audience. Partnerships allow platforms to expand their content libraries.
Threats: Stricter privacy policies can impact tracking abilities and monetization strategies. Regulatory issues and licensing challenges pose threats.
The global AVOD Services Market is expected to witness high growth at a CAGR of 14% over the forecast period due to increasing cord-cutting and demand for low-cost streaming options. The market size is projected to reach US$ 98.52 Bn by 2030 from US$ 28.09 Bn in 2023.
Regional analysis – North America currently dominates the global market due to high smartphone and internet penetration with over 40% revenue share in 2023. However, Asia Pacific is expected to exhibit the fastest growth during the forecast period with a CAGR of 16% owing to rising digitalization in populous countries like India and China.
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), Tubi TV (Fox Corporation). The major players are focusing on expanding their libraries by partnering with Hollywood studios and independent producers.