Jan 9

AVOD vs SVOD: Understanding Key Differences

In today's digital age, the way we consume TV and film content has dramatically shifted, thanks to the advent of Video on Demand (VOD) services. Among the various models of VOD, Advertising-Based Video on Demand (AVOD) and Subscription Video on Demand (SVOD) are two of the most prevalent, each offering distinct benefits and catering to different viewer preferences.

This article explores the fundamental differences between AVOD vs SVOD, helping viewers and content providers alike navigate the complex landscape of digital TV streaming.

What is AVOD?

AVOD, or Advertising-Based Video on Demand, is a model that features four main stakeholders: the platform, viewers, content creators, and advertisers.

In AVOD, viewers can access film and TV content either for free or at a reduced cost, with advertisements displayed before, during, and after the content. This ad revenue is crucial as it supports both the platform and the content creators. AVOD is especially attractive in markets sensitive to subscription costs and where viewers are more accepting of ads. Advertisers benefit from this model by purchasing ad inventory, using it to target specifically relevant audiences through programmatic targeting.

Examples of AVOD platforms include YouTube, Peacock, and Hulu’s free tier, which offer a wide range of content from user-generated videos to professionally produced shows and movies.

What is SVOD?

SVOD, or Subscription Video on Demand, refers to a service where users pay a regular subscription fee to access a library of content without any advertisements. This model is favored for its user-friendly approach, allowing uninterrupted viewing experiences. Major players in the SVOD market include Netflix, Amazon Prime Video, and Disney+, which offer extensive catalogs of movies, TV shows, and exclusive content to their subscribers.

AVOD vs SVOD: Key Differences

Pricing Structure:

AVOD: Generally free or less expensive for users, monetized through advertisements.
SVOD: Requires a monthly or annual subscription fee, providing an ad-free experience.

Content Accessibility:

AVOD: Often provides a broad range of content but may not always include the latest releases or exclusive content.
SVOD: Typically offers more exclusive and premium content, including latest releases and original programming.

Revenue Model:

AVOD: Relies on advertising revenue, which can fluctuate based on viewer numbers and ad engagement.
SVOD: Benefits from a steady stream of income through subscriptions, providing a more predictable revenue model for the platform.

Market Trends and Popularity

In 2024, SVOD revenue is expected to reach nearly $54 billion, while AVOD revenue is projected to hit around $18 billion. The popularity of SVOD remains robust; however, there is a noticeable shift towards AVOD, particularly as advertising technologies advance, enabling less intrusive and more targeted ads. This shift is also influenced by economic factors, as consumers seek to reduce discretionary spending without sacrificing access to entertainment. For instance, in Q4 2023, almost 63% of respondents in the US and Canada reported reducing their entertainment spending due to recent economic inflation.

Considering that an average American subscribes to three streaming services simultaneously, these services may represent different models. For example, 44% of current SVOD users have subscriptions that include an ad-supported tier, either within the same platform or a different one. Nowadays, many major streaming platforms offer various subscription tiers—there is often a cheaper or free AVOD tier for those looking to save money and tolerate ads, and a more expensive SVOD tier for those who prefer an uninterrupted binge-watching experience. Streamers themselves benefit from this diversified portfolio of models, as it creates synergy between them—AVOD attracts monthly viewers and can convert some to its more premium SVOD model.

About allrites

allrites is a premier marketplace for buying and selling film and TV rights. We provide a vast catalog of Film and TV content, from major studios to independent producers, available in any language and genre. Our innovative licensing models, including allrites Content-as-a-Service, offer flexible and efficient solutions for content monetization and acquisition, accommodating the evolving needs of content buyers and sellers worldwide.