AVOD sees US, European divergence but fast growth set to continue | VOD | News | Rapid TV News
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As it is increasingly seen as a shelter for low-budget content consumption, the advertising video-on-demand (AVOD) market is expected to increase fast on a global scale, driven by the launch of new major players in the US, the growth of YouTube in Europe and Latin America, and the consolidation of the Asian market says research from Dataxis.
Dataxis AVOD 2July
The study says that he Covid-19 crisis highlighted a considerable increase in video consumption. It notes that in the US, Comcast has seen a 50% rise in VOD viewing over March and April 2020 for instance. Yet while subscription VOD (SVOD) and linear-OTT environments have become more overcrowded over two SVOD services, AVOD has been increasingly seen as a shelter for a low-budget content consumption. And says Dataxis if this move towards AVOD is not completely new in the US, the market as a whole has become significantly more competitive since 2018.

Within this saturating market, Dataxis believes that only a few players are standing out in terms of monthly active users, namely: Pluto TV, Vudu, Tubi, and more historical players such as Hulu, Roku Channel and, obviously, YouTube. In total, it counts more than 15 services gathering more than five millions active users every month.

The research also found that advertising revenues, which used to be mainly captured by YouTube, are becoming more diversified between a growing number of players, able to monetise their audience in a country where the digital transition in ads-spending is accelerating. It noted that some actors have started to go international, especially in Latin America and Europe.

While YouTube’s share was declining in the US, the online video juggernaut was still dominant in Europe. In addition, the research revealed that reality of a fragmented TV market covered by numerous but domestic-only local players has hindered the emergence of a regional native player with the ability to compete.

Mainly composed of broadcaster platforms, the European AVOD market remains in a consolidation phase, leading consumers to prefer SVOD offers. For advertisers too, this nascent AVOD market is yet to become a strategic asset, as the user appropriation out of YouTube remains low. Nevertheless, Dataxis believes that a small number of well-implanted broadcasters in Western Europe have managed to monetise their audiences consistently. In France, the domestic AVOD market now accounts for 150 million euros and it reached more than €300 million in the UK.

But even if on a global scale the European AVOD market has been experiencing a limited growth so far, Dataxis observed that some actors have started to adopt hybridisation strategies coming from the US mixing AVOD and SVOD offers in order to maximise their reach. In addition, it added that partnerships between domestic actors are increasing, citing the case of Discovery and ProSieben in Germany, which launched their Joyn freemium platform in 2019, as probably one of the most emblematic examples of that trend.

In conclusion, Dataxis expects the arrival of international players such as Pluto TV, Rakuten, and eventually the soon to be launched Peacock as potentially delivering could give a kick-start to the European AVOD market. Latin-American is seen as remaining heavily focused on YouTube’s unquestionable domination, which still accounts for more than 90% of the advertising revenues of the AVOD market. Dataxis says penetration of the social video platform in the LATAM region has significantly increased over the past three years, and so did its penetration in terms of revenues among the total of the Internet net advertising revenues.