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What is AVOD and How does it Work?

Ankit Jena Published on : 15 December 2022
What is AVOD


OTT Revenue is one of the most lucrative revenue models for content creators as compared to any other content distribution models. OTT landscape is changing and giving the audience more control over when and where to watch content and have the complete liberty to choose preferred payment model. Content creators need to realize the taste and need of their audience and accordingly sell or monetize their contents online in order to meet their revenue goals.

Out of various OTT monetization models available for content monetization on online video platforms, AVOD is one of the most rapidly growing models that content distributors are considering. AVOD or Advertised-based Video on Demand business model helps generate revenue by inserting ads into the videos.

According to a report, AVOD revenue in the U.S is going to boom in the next few years and will surpass 94.7 billion U.S dollars by 2030 due to release of new services both domestically and globally.


AVOD Meaning


What is AVOD?

Advertised-based video-on-demand is a revenue model where the audience must see the ads to watch the content for free without paying or subscribing. The platform owners generate revenue by inserting ads into video streaming, either via Client-Side AD or Server-Side AD insertion.

Instead of charging viewers to access the content, streaming platforms offer up Ad Space to advertisers to turn a profit.

Ads can appear as skippable or non-skippable pre-roll ad, mid-roll ad or post roll ad.

The most popular example of an AVOD supported Online Video Platform that we all will be aware of is YouTube!


Why Choose an AVOD Model?

AVOD has proved to be a lucrative monetization model for content distributors with a lot of viewers coming and watching their preferred content for free. It has already captured a huge portion of the streaming business and is rapidly growing than ever before.

AVOD is filling the gap between an ad-free experience provided by streaming services and linear TV. It has strategic advantage of both:

  • On-demand availability of content
  • Access to a Huge content library without any subscription charge

In a cut-throat and aggressive OTT marketplace, content distributors continuously battle for viewer’s attention. And on the other hand, viewers have several alternatives to choose from. AVOD has seen fast growth and spread out across several markets globally. Advertisers all around the world are looking to insert their ads in OTT streaming because a large group of audience is consuming content online which will help them build brand recognition.

An environment with a huge library of premium yet free content without needing to pay a single penny makes AVOD the most popular method of content consumption amongst viewers. Hence, obtaining maximum user engagement with earning higher profit by running ads makes AVOD the most preferred monetization model for content distributors.


What is AVOD


Benefits of AVOD Revenue Model


Higher User Acquisition

AVOD has no entry barriers as it is a free model and therefore, it attracts a huge range of audience to come and consume their preferred contents without paying or subscribing. Platforms like YouTube are free to sign up and don’t have any other regulations to watch content for free. Internet connectivity has helped audiences to consume content anywhere and from any device thus media distributors should target their desired audience and reach them effectively with a huge and attractive content library and earn revenue by inserting ads into their streams.


Optimum Revenue Source

AVOD provides outstanding potential to both platform owners and advertisers to make much revenue. Platform owners and advertisers can equally gain traction of digital ads and make profit to achieve their respective business goals. AVOD helps media distributors for precise, user-level targeting thus making the video library attractive to advertisers and profitable for content owners.


Variety of Ad Formats

Ad formats in AVOD revenue models include skippable ads and non-skippable ads, pre-roll ads, mid-roll ads, post-roll ads, beyond video ads some other ad-supported monetization options include display banners, sponsored contents, and other streaming media ad creation formats like binge and pause ads. Thus, streaming platforms and ad distributors can make ads more appealing to viewers.


AVOD Audience Targeting Option


Advertisers like platforms that offer targeting options

AVOD business models offer audience targeting options by analyzing the preferences and habits of a viewer. Advertisers like platforms that offer audience targeting options. It helps advertisers to reach their targeted audience based on their location and region. The advertisers who were spending bulk amounts on traditional advertising are now shifting to streaming ads. Looking at the reach and audience targeting option, more and more advertisers are convinced to spend their digital ad budget in the streaming industry.


Personalized Ads

Personalized Ad is the method of targeting ads to individual customers and thus help advertisers reach their targeted audience effectively and convey their message across loud and clear. Consumers are more likely to purchase a product or service when you provide them personalized experience. Personalization makes relevant content more visible and de-emphasize content that customers don’t take interest in.


Ad targeting based on Parameters

  • Geo-Targeted Ads – Geo targeted ads helps advertisers to focus on the areas where they will find the appropriate customers, and exclude areas where they won’t advertise. It also helps run different ads in distinct locations, which can be optimized for the diverse audiences in each place.

  • Device-Targeted Ads – Device targeted ads helps advertisers target users across all devices and helps businesses to expand their reach and improve conversion rates. Targeting a user across devices and platforms help advertisers provide a more consistent and seamless messaging experience to their viewers.

  • Interest-based ads – Consumers are served with ads based on their past choices. Interest based ads help consumers gain access to real-time deals on desired products and services. Interest-based advertising helps viewers receive information and offers concerning products they might want to purchase.

  • Language-based ads – Language-based ads help advertisers target specific audiences based on their language settings. It helps increase traffic, generate more leads, boost click-through rates (CTR), lower your cost per clicks (CPCs) and increase conversion ratios.


Retargeting Ads

Retargeting Ads offers additional points of contact to your brand, increasing the chances that those customers who have already visited your website or application will convert. With the ever-expanding landscape of digital advertising, the battle for audience’s attention has to be won with not just quantity but also quality.


How AVOD Business Model Works in Insertion?

There are two basic methods of Ad Insertion in an Ad-based revenue model:

  • CSAI
  • SSAI


CSAI or Client-Side Ad Insertion is the method of inserting ads to clients through mobile, gaming consoles, desktop, etc; where the client-side player requests the ad-server for the advertisement during the time it reaches any ad-makers in the streaming file.


SSAI or Server-Side Ad Insertion is the Dynamic Ad insertion technique where Ad’s media are inserted directly into the video that is being streamed at the server not the viewer’s player side. It is quite different from CSAI where the ad insertion is done at the client.


Types of Ad Options for a AVOD business


Video Ads –

Streaming video-based Ads are the most affordable yet effective methods of video marketing for advertisers. Video Ads are appealing and are more likely to get imprinted in the mind of the viewer. It receives 30% more views as compared to other ad formats.


Pre roll –

Pre roll ads are usually the ads that are played before a stream. It means viewers will have to watch the ad first and then watch the desired content. One of the major benefits of pre roll ads is it is seen by most people because potential audiences are interested in watching the content that is followed by the ad and hence do not leave without watching.


Mid roll –

Mid roll ads are typically the ads that are played in between a stream. Platform owners have the option to enable mid roll ads while uploading the content. Mid rolls are beneficial because they appear in the middle of the video where the viewer has almost watched a part of the video and being so involved in the content, they would also prefer watching the ad in between.


Post roll –

Post roll ads are the ads that are usually played at the end of a stream. Post roll ads only appear on the video that has opted into an ad revenue program and typically is 10 to 15 seconds long and can be three minutes long.


How is AVOD different from other models?

AVOD – In this OTT revenue model, the revenue is generated using Ads in the streams and it helps video streaming platform owners offer audiences a vast content library for free and monetize the same by running ads.

SVOD – In this OTT business model, the revenue is generated by taking a subscription fee from the audience of those who opt for watching the videos. Platform owners can offer audiences with a content library to watch and monetize the same by asking the viewers to subscribe to the platform monthly or yearly.

TVOD – TVOD or Pay-Per-View model allows viewers to pay for each of the content they want to access. It means they do not have to subscribe to the entire library for a month or year, they can simply watch their preferred content by paying for that video.

PPV Bundles – PPV bundles is the monetization model that helps platform owners to create a bundle of contents available and set a pricing plan for the bundle. It enables you to hide the bundle from the regular bundles accessible on the streaming platform.


Getting Started with AVOD


What do you need?

To get started with a video streaming platform with AVOD business model, first you need a video streaming solution that helps you create your own multi-device streaming platform. With Muvi One, you can build a video streaming platform instantly and monetize your contents by running Video Ads! Run several Ads on your videos across Website, Mobile Apps and TV Apps, as well as any other type of video ad units that are supported by the video advertising platform.

Our AVOD interface is user-friendly and seamlessly integrates with Video Advertising Platforms like YuMe, SpotXchange and DoubleClick. Integrating Ad Servers helps you offer complete control of your Ad inventory.

Some of the popular Ad networks are Primis, OpenX, Magnite, SelectMedia, Unruly, YuMe, SpotXchange, etc.


Criteria for Google AdSense Qualification:

  • Content must be high-quality
  • Content must be Original and attract audience
  • Make sure that your content complies with AdSense Program Policies
  • Pages must have clear and easy to use navigation


Video Ad Exchanges and Automated ad inventory fulfillment

Video ad exchange is a virtual marketplace where publishers and advertisers trade digital ad inventory. It is an online platform that is utilized by publishers to provide their ad space inventory for sale. For advertisers, it serves as a digital marketplace by bidding on ad inventory.


Some Popular AVOD Platforms

Some popular AVOD platforms include:

  • YouTube
  • Hulu
  • Paramount +
  • Facebook Watch
  • Instagram
  • Dailymotion
  • MX Player
  • TikTok
  • Pluto TV
  • Roku TV


AVOD and FAST channels

FAST Streaming is a part of the Ad-based revenue model. FAST channel stream linear TV programs without any subscription fee.

AVOD means offering on demand contents to the viewers in exchange for ads and FAST provides linear channels that are supported by advertisements. Both the models monetize the inventory, eliminating the need for a subscription, which also helps limit audience subscription fatigue.

Read more: What is the FAST channel and what is its future?



AVOD monetization model is ideal for content providers or operators who have a huge variety of content which appeal to the audience.

AVOD platforms generate free traffic and the outstanding advantage to providers is its ability to collect user information which can be used to boost an SVOD offering.

If you have an idea about launching a video streaming platform with AVOD model, consider choosing Muvi One. Muvi One helps you launch your own multi-device video or audio streaming platform and stream contents across the globe. Take a free trial to know how easy it is to stream contents using Muvi One!



What does AVOD mean?

AVOD or Advertising Video on Demand is a OTT business model that allows your viewers to access the content library for free and watch ads in exchange. The platform owners can generate revenue from the ads.


What are the benefits of AVOD?

Prime benefits of AVOD are:

  • Provide free viewership
  • Higher user acquisition
  • Optimum revenue source
  • Variety of Ad formats


How to choose the best AVOD Platform for your business?

Below are some valuable factors to consider when choosing the right platform provider:

  • Intended audience
  • Privacy and security
  • Audience targeting option
  • Ad Insertion Method


What are some Examples of AVOD platforms?

Some examples of AVOD platforms are:

  • YouTube
  • Hulu
  • Paramount +
  • Facebook Watch
  • Instagram
  • Dailymotion
  • MX Player
  • TikTok
  • Pluto TV
  • Roku TV


What is AVOD

Written by: Ankit Jena

Ankit is Content Writer for Muvi’s Marketing unit. He is a passionate writer with 5+ Years of Experience in Content Creation And Development. In his past time, he likes to dance, play football and google various things to quench his thirst for knowledge.

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