2020 set to be year of AVOD | VOD | News | Rapid TV News
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Leading analyst Ampere Analysis is advising the video industry to prepare for no less than an avalanche advertising-supported video-on-demand throughout 2020 as many of the current free streaming platforms build scale and roll-out internationally.

Ampere AVOD 7Jan2020Whilst accepting the boldness of the assertion given the current low absolute number of AVOD services in the US at this time, between 3-6% of US online households, Ampere believes this to be “merely the quiet before the storm.”

One of the key drivers for the expected growth in AVOD will likely be the quiet culling of older content from subscription VOD services. Although initially reliant on older content, SVOD players have gradually replaced old with their own originals and newer acquisitions. Ampere cites the case of Netflix where the proportion of its catalogue over five years old fell from 50% in September 2015 to 35% in September 2019. This trend is said to be consistent and continuing across the sector.

As this was happening, the long tail of older content has been embraced by the new AVOD players, who average nearly 80% of their catalogues at five years old by title count, and in the case of Crackle, 70% of content is over ten years old. Ampere sees the demand for older content as not only providing a new market for licensing deep archive, but also offers a boon for distributors and sales agents.

Ampere predicts that as advertisers rush to support AVOD, spend on online video advertising will inevitably increase as the platforms spread globally in 2020. Yet it adds that to date this form of advertising has remained relatively small: it calculates that even in developed markets like the US just 27.2% of online ad spend is on video, and in Canada merely 5.85%. Ampere expects the rush to AVOD to be supercharged by some of the studio direct models such as Disney’s Hulu and NBC Universal’s Peacock which are expected to adopt a hybrid SVOD/AVOD model.

“AVOD is coming, and it’s going to make its mark on the video-on-demand landscape rapidly. Its impact will be felt not just by the entertainment industry, but by advertising too as the shift that has already disrupted the subscription television market sweeps across the free-to-air sector,” commented Ampere Analysis director Guy Bisson. “AVOD services are treading a well-trodden path with an early reliance on older content, but as their market position grows, we can expect them to begin acquiring newer content and even moving into original production activity as they battle for eyeballs in an increasingly crowded market.”