THE RISE OF AVOD STREAMERS


Digital video advertising – connected TV (CTV),


social media, and short-form video – grew 21% in 2021 and is expected to grow another 26% in 2022 to reach $49.2 billion globally, the Interactive Advertising Bureau (IAB) predicts in its 2021 Video Ad Spend and 2022 Outlook. CTV ad spend is growing at a considerably faster


rate, however – up 57% in 2021 to $15.2 billion, and predicted to grow another 39% to $21.2 billion in 2022. “One of the most exciting things CTV can offer


advertisers is incremental reach to new audiences they might not find on other platforms,” says Dave Castell, General Manager, Inventory Partnerships, at digital media buying platform The Trade Desk. SVOD players introducing advertiser-funded


tiers is “inevitable”, he believes, though stresses that the success of AVOD will depend on the viewer experience. “To ensure consumers aren’t reaching for the


remote, advertisers and broadcasters need to work together to optimise the advertising experience. First and foremost, this means limiting the number of ads, but ensuring they’re relevant,” Castell explains. “If the amazing and often expensive content


that is driving this new golden age of television is to continue, relevant ads are the only way to fund and preserve it. Doing so will help avoid some of the pitfalls that led to consumer fatigue with ads on linear TV.”


Content producers also have much to gain, others suggest. True, the ad-funded model may not support


“THE STREAMING SERVICES THAT STRADDLE SVOD AND


AVOD WILL ULTIMATELY COME OUT ON TOP. THE FUTURE IS CHOICE”


the big budgets available through subscription- funding. But moving forward, AVOD services are now expected to commission more original content for a number of reasons. First, it’s a way of ensuring they have their own


license-free content as their international footprints spread. Second, its insurance against a decline in available third-party content as more studios launch their own VOD services. Third, because as the streaming market grows ever more competitive, exclusive content becomes an increasingly important differentiator. AVOD’s benefits for content creators lie in how


complementary it is to SVOD, adds Fahy. “Ad-funded is an extra path for content creators


to monetise their investments and, as such, is an exciting opportunity. It’s about windowing (content) appropriately – for example, through premium SVOD first then, after a period of time, put it out on AVOD and FAST,” he says. “Others might create original content for FAST


and AVOD and have monetisation in SVOD after.” Moving forward, expect a hybrid mix of business


models across different streaming platforms, Fahy adds: “We see a mixed model in the future, with a


growing segment of AVOD alongside a growing segment of SVOD and other models, as well as a healthy backbone of linear TV consumption.” Castell agrees. “The streaming services that


straddle SVOD and AVOD will ultimately come out on top,” he says. “The future is choice.”


Summer 2022 televisual.com 33


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The Real Prime Suspect


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