Rethinking: SVOD will triumph over AVOD in the next five years | Media analysis | Business | News

Netflix’s planned launch of an advertising video-on-demand (AVOD) service to address the slowdown in core revenue has sent shockwaves through the subscription VOD market, leading to talk of spikes , but research from Rethink TV predicts a resurgence of the SVOD industry from 2023.
The study predicts that by 2027, the global SVOD industry will generate $171 billion from 1.8 billion subscribers, while AVOD services will attract 8.6 monthly active users (MAUs) generating 91 billions of dollars in advertising revenue.

Regarding likely market developments, the analyst suggests that the SVOD market will grow from some 723 million subscribers in 2022, with revenues by the end of this year rising to 72.1 billions of dollars. For AVOD, the number of MAUs will increase from 6.81 billion in 2022, with advertising revenue increasing by $50.18 billion as ARPUs are strengthened.

The analyst believes that a key point to consider in the relative evolution of the market will be the beginning of the collective expansion of AVOD services into subscription models in 2022. He adds that during this period, it will not there will be no crossover between the two industries.

In this context for pay-TV and broadband operators, the key question for Rethink TV is the impact of SVOD and AVOD services on the pay-TV value proposition. The analyst does not expect the value of pay-TV to consumers to increase, and fears that pay-TV providers are becoming dumb pipers will intensify.

Additionally, Rethink sees SVOD and AVOD research echo a report on the status of Multicast-ABR (M-ABR). Many vendors of this technology feel that there should be considerable cooperation between ISPs and third party content owners, when it comes to delivering video effectively.

Data on demand would show that this operational headache will intensify, as operators are required to provide ever more data to their paying customers. Ultimately, the analyst predicts in his study that with technologies like M-ABR, and possibly decentralized CDNs, the growth of SVOD and AVOD traffic should not be disastrous for operators but cause conflict, with both sides building the model for such partnerships.

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