There is a cut-throat competition in the streaming industry and every business owner is fighting to gain maximum eyeballs for their respective streaming platform. As the fight intensifies, more and more platform owners are diversifying their monetization strategies to include Ad-supported streaming services that scale both ad offerings and capabilities. Big names in the industry like Disney and Netflix debut ad-supported streaming models, marketers as well as advertisers can take advantage by integrating themselves into the mix of ad-supported and subscription-based to create campaigns that hook viewers for a longer period.
No doubt, subscription-based streaming models were leading the way for OTT and streaming companies, but as subscription models are getting less attention nowadays, ad-supported streaming services have gained traction and become more mainstream, allowing a broader reach to those end-users who are reluctant to subscribe to content, but still want to view it.
Impact of Ad Trends on OTT Industry
An intense competition for Ad-dollars exists because several advertisers are chasing those ad budgets. This competition is developing recently because ad spends and targeting costs are increasing across the market. Since the market is evolving, inventory quality is also becoming a hot topic rapidly. As targeting specifications increase, addressable inventory starts to decrease.
Scaling happens in 2 methods:
- Actual ad sales based on inventory and that inventory being sold to you directly
- Parents and other organization selling your premium inventory
These methods left you left overs, thus proposing the question – What would you do with the remaining inventory? This brings in a profound discussion of fragmentation of inventory and ad data, which will impact omnichannel planning and overall scalability of several teams.
Regardless of these issues, the need for reaching out targeted audiences across streaming media still exists and the battle for ad dollars intensifies, generating more pervasiveness for ad-supported streaming services than ever before. Advertisers are slanting into OTT streaming as a vital part of their digital media mix to expand their marketing reach and thus increase ROI.
What are Ad-supported Streaming Services?
Ad-supported streaming services is the method of streaming audio or video contents to an audience without any kind of charge or fees, directly or indirectly. The media distributors can monetize their contents by running video ads across their platform. Users get free access to the content library on the platform in exchange for watching ads. The primary source of revenue in ad-supported streaming services is ads which is used to offset production as well as hosting costs.
What is the difference between Ad-supported and Subscription-based streaming services?
As mentioned in the above paragraph, Ad-supported streaming refers to ad-based channels that do not charge any kind of fees to the end-users to watch content. On the other hand, subscription-based streaming allows users to pay a regular fee to receive unlimited access to a huge content library. AVOD models use the revenue from the ads to offset the cost of production and hosting and SVOD models use the revenue generated from the audience to do the same.
Current Scenario of the Streaming Market
While both Ad-supported and subscription-based streaming services are growing in the U.S.A, more consumers are being more aware of their budgets and leaning towards Ad-supported services. Since inflation continues to hit consumer’s wallets, there is a huge shift of audience from Subscription models to Ad-supported models.
There is a tremendous growth in FAST channel audience and this growth has led to rapid addition of channels in FAST platforms with a total of 300 channels added by June 2022. Not only entertainment, but also free ad-supported sports streaming channels have also grown since last year.
Most FAST platform owners prioritized keeping ad loads in check as they look to grow their audience reach and avoid a linear TV experience that encompasses 10 minutes or more of ads per hour of viewing.
The faster adoption of ad-supported streaming services signifies a shift in the market and consumer’s tolerance of advertising in the streaming environment. Introduction of Ad-supported options gives more revenue paths to streaming giants that are searching for growth opportunities.
Read now – What is Fast channel and what is its future?
How Ad-supported streaming services work?
Ad-supported streaming services work by running ads within the streaming contents watched over internet connected devices. These ads will appear before or during streaming content found on ad-supported streaming platforms. It does not require any subscription or transactional fee as revenue is earned from the ads. Service providers can share their huge library to audiences for free and reach targeted audiences effectively.
Ads can be featured within several different inventory types as well as served programmatically. Depending on the audience a brand is trying to reach, ads can be featured anywhere from the free streaming services like. Most ad-based streaming services use pre-roll ads which are ads at the beginning.
What streaming services are free with ads?
- Roku channel
- Pluto TV
- Tubi Tv
Market size ad-based streaming services and how it is going to gain traction in future
Ad-based streaming market is a huge market that both advertisers and content creators or publishers aim to tap into. The market is expected to grow because there is a continuous advancement in technology that allows further advancement in the business model.
Reasons why the market size is getting bigger:
- Advancement in streaming technology
- Upsurge in the number of smartphone users
- Increase in online content creation
Ad-based streaming services are expected to grow even more because it is a huge market and can grow exponentially. The industry is expected to grow by 144% in the subsequent decade, reaching $66 billion in revenue across one-hundred and thirty-eight nations. Ad players will be pulling ad dollars away from other channels such as social, programmatic, and digital display to invest more into streaming media. Additionally, ad-supported OTT streaming services are becoming increasingly more mainstream, offering prime openings to acquire premiere ad space to garner audience attention as well as diversify the revenue.
Choose Muvi to Start Your Own Ad-Based Streaming Services
Muvi allows you to monetize your Video Streaming Platform by running Video Ads. You can run various types of Ads on your videos across Website, Mobile Apps and TV Apps, as well as any other kind of video ad units that are supported by the video advertising platform, and monetize on Ad-Supported Model (AVOD). You can also build and run your platform with both Paid and Advertisement models – all from a single admin-CMS.
Our HTML5 player is completely customizable and is filled with enormous features including VAST and VPAID compatibility. You just need to simply log in to the Muvi One dashboard as well as add the necessary VAST/VPAID tags over a simple form. Take a free trial to explore the awesome feature of Muvi now!