Rethink: SVOD to triumph over AVOD over the next five years | Media Analysis | Business | News | Rapid TV News
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Netflix’s expected launch of an advertising video-on-demand (AVOD) service to address slowing core revenues has sent shockwaves through the subscription VOD market leading to some talking of peaks, but research from Rethink TV is predicting a resurgent SVOD sector from 2023.
REthin SVOD AVOD 24April2022
The study forecasts that by 2027, the global SVOD industry will generate $171 billion from as many as 1.8 billion subscribers, while AVOD services will draw 8.6 monthly active users (MAUs) leading to $91 billion in ad revenues.

Ion terms of how the market will likely develop, the analyst suggests that the SVOD market will grow from some 723 million subscribers in 2022, with revenue by the end of this year amounting to $72.1 billion. For AVOD, the MAU count will grow from 6.81 billion in 2022 with the advertising revenue growing from $50.18 billion as ARPUs are bolstered.

The analyst believes a key point to consider in the relative market developments will be the beginning of the AVOD services collective expansion into subscription models in 2022. It adds that through this period, there will be no crossover between the two industries.

Looking at the context of this for pay-TV and broadband operators, the key issue for Rethink TV is the impact of SVOD and AVOD services on the value proposition for pay-TV. The analyst does not foresee pay-TV increasing in value among consumers, and fears that pay TV providers have about becoming dumb pipes will intensify.

Moreover, Rethink sees the SVOD and AVOD research echoing a report on the state of Multicast-ABR (M-ABR). Many of the vendors for this technology believe that there should be considerable cooperation between the ISPs and the third-party content owners, with regard to delivering video in an efficient manner.

The on-demand data is said to show this operational headache is going to intensify, with operators required to deliver ever more data to their paying customers. Ultimately, the analyst predicts in its study that with technologies like M-ABR, and eventually decentralised CDNs, the growth of SVOD and AVOD traffic should not be disastrous for the operators but will spark conflict, as the two camps work out the model for such partnerships.