AVOD, key to the survival of video on demand

The latest study of Digital TV Research highlights the importance of AVOD (Advertising Video on Demand) and its coexistence with SVOD (Subscription Video on Demand) as a new business model among the large video on demand platforms.

The investigation of Digital TV Research, although he points out that global subscriptions to SVOD will increase in 428 million between 2022 and 2028 until reaching the 1,760 million, also highlights how the model AVOD-SVOD It will be consolidated as a crucial element of the sector's business model. In the words of Simon Murray, study analyst: “We estimate that Netflix will offer its hybrid AVOD-SVOD tier in 85 countries in 2028, with Disney+ in 91 countries, HBO in 55 and Paramount+ in 56. This includes pan-regional services in Spanish-speaking Latin America and also in Arabic-speaking countries.” These four platforms will collectively have 372 million subscribers of hybrid AVOD-SVOD services in 2028, that is, the 56% of its total subscriber base.

Subscribers are expected to Disney+ in most markets automatically convert to hybrid level AVOD-SVOD, which will mean that, in 2028, the platform will have 206 million subscribers with this model (88% of its total). On the other hand, the 24% of total Netflix subscribers will pay for the AVOD-SVOD hybrid tier in 2028, i.e. 63 million.

"Netflix has a large SVOD-only subscriber base. Most of these subscribers will continue with these plans, even though the AVOD-SVOD tier is considerably cheaper. The hybrid tier will be more attractive to developing countries, where disposable incomes are lower. The hybrid tier will also be attractive to new subscribers who do not have legacy SVOD-only subscriptions," he adds. Murray, delving deeper into the study's findings.