As consumers begin to rationalize their spending on streaming subscriptions, there will of course be winners and losers. One of those winners could well be ad-funded video. This fast-growing category includes both on demand (AVOD) such as Fox’s Tubi and Disney’s Hulu in the United States and All4 and ITV Hub across Europe, as well as the linear, free, ad-supported television (FAST) services such as Viacom’s Pluto TV and Xumo in the United States, and Joyn and Discovery in Europe.
In the wake of the pandemic and in the face of rising inflation, consumer subscription fatigue may make ad-funded models more attractive as a means to counter Subscription Video-On-Demand’s (SVOD) slowing subscriber growth. The growth of ad-funded streaming offers opportunities to all players in the media value chain. That’s the good news.
The big challenge? Getting AVOD/FAST right is not easy. It requires high levels of engagement to secure advertising dollars and achieving that will require a range of approaches and capabilities that are distinct from those needed for successful subscription-based services.