Reports Video

AVOD A market primed for success

Report by Tim Mulligan
Cover image for AVOD
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The 20,000 foot view

The leading ad-supported video on demand (AVOD) services in the US have doubled their weekly active users (WAUs) in the past        months. While still niche, AVOD is now moving ever closer to mainstream adoption. This is most strikingly seen in the pivot of its userbase, from younger, lower-income demographics to older and wealthier consumers. However, increased adoption is more of an endorsement for free rather than ad-supported services, with AVOD users over-indexing for ad avoidance preferences. Squaring the disconnect between the subscription-free model and the antagonism to ads is AVOD’s next great challenge.

Key Insights

  • Between        2020 and        2021, average WAU engagement for the leading US AVOD services has doubled, with The Roku Channel increasing by ten percentage points to       
  • However, over-indexing for ad avoidance for video consumers remains a key strategic challenge that underlines consumer tolerance rather than willing engagement with the ad-monetisation model
  • Despite ad-aversion, video monetisation across leading video behaviours among AVOD consumers exceeds the consumer average 
  • AVOD users are now older and earning above average incomes, thus presenting an opportunity for AVOD services to finesse traditional intrusive TV ads with contextual advertising, and personalise value exchange propositions through interactive ads
  • AVOD has the potential to be the streaming ‘top up’ option for households that already have one or two video subscriptions, rather than adding yet another subscription on top

Companies and brands mentioned in this report :Amazon, Amazon Prime Video, , Peacock, Pluto, Fox Corporation, Roku, The Roku Channel, Tubi

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