AVOD (Advertising-based Video on Demand) services refer to online video streaming services that are freely accessible to users and are supported by advertisements. Major AVOD platforms provide a wide selection of movies, TV shows, news segments, sports highlights and other video content that users can watch at their convenience on various connected devices. The services are gaining popularity due to their accessibility and cost-effectiveness.

The AVOD Services market is estimated to be valued at US$28.09 Bn in 2023 and is expected to exhibit a CAGR of 14% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights. 

Market Dynamics:
The global AVOD services market is driven by the rising popularity of online video streaming and preference of cord cutters and cord nevers for ad-funded content. According to surveys, the number of cord cutters in the U.S. increased from 8 million in 2018 to over 21 million in 2022 as younger audiences prefer cheaper or free online streaming options over cable or satellite subscriptions. Additionally, the proliferation of smart TVs, mobile devices and broadband connectivity has improved access to online video services across regions. Major AVOD platforms are leveraging data analytics to target personalized ads to viewers, which is encouraging greater sponsorship and advertising on these platforms. However, growing concerns around data privacy and evolving regulations may negatively impact the ad targeting capabilities of AVOD services.

SWOT Analysis

Strength: AVOD services offers free content to viewers without subscription. It generates revenue from ads which makes the content free for viewers. Being free, it attracts large user base and engagement. It allows access to latest movies, shows and live content.

Weakness: As revenue comes from ads, there is limitation of funding for original content. Viewers experience ads interrupting the content. Ad loads and frequency can impact viewing experience.

Opportunity: Growing internet and smartphone penetration increase the reach of such services. Young demographic is open to watch ads in exchange of free content. Partnership with telecom and device makers help promote the service.

Threats: Stricter regulations around user data and privacy can limit ad targeting. Subscription VoD services offer better viewing experience without ads. Piracy platforms provide similar free content without any interruptions.

Key players analysis: Key players operating in the AVOD services market are YouTube (Google), Hulu (Disney), Peacock (NBCUniversal), Tubi (Fox Corporation), Pluto TV (ViacomCBS), IMDb TV (Amazon), Roku Channel (Roku), Crackle (Chicken Soup for the Soul Entertainment), Xumo (Comcast), Vudu (Walmart). US based players like YouTube, Hulu, Peacock capture large domestic market currently.

Regional analysis: North America dominates the AVOD services market currently due to high smartphone and internet penetration with over 40% share. Asia Pacific is the fastest growing region due to rising middle class population and increasing digital adoption in major countries like India and China. 

Key Takeaways

The global AVOD services market is expected to witness high growth, exhibiting CAGR of 14% over the forecast period, due to increasing media consumption across devices. Binge watching trend and preference for personalized content on demand further boost the market growth.