When subscription-based services like Netflix first started to gain popularity, media experts and advertising gurus darkly predicted the end of the TV ad age. Ads appear to be on the verge of retaking center stage in the business after a few years. In light of Discovery’s ad-supported streaming options, Netflix’s business model is now anachronic. By dynamically injecting commercials into the ad breaks, ad-supported tiers, as opposed to a subscription model, are able to provide linear streaming services for no cost.
Because of advertising-based business models, streaming service providers have a possibility to continue expanding despite the industry’s saturation and their own considerable market penetration. AVOD and FAST are the two types that have contributed the most to the expansion. The acronyms AVOD and FAST are becoming more frequent in our everyday discourse, however they are sometimes used interchangeably. FAST (free, ad-supported streaming TV) mimics the linear TV experience, whereas AVOD (advertiser-supported video-on-demand) is totally on-demand. So let’s bring to light some of the major differences between the two models.
AVOD
The OTT revenue model for advertising video on demand is «free» for viewers in the sense that there is no fee to access the content. Rather than charging viewers a charge to watch content, streaming services generate money by licensing advertising space to businesses before and during programs. The purpose of this strategy is to monetize the massive viewership that these platforms have through adverts.
FAST
Instead of on-demand, the material is supplied in the form of linear scheduled programming, with advertisements running prior to, during, or following videos. As a result, FAST resembles regular cable television a lot more than other OTT streaming providers. Similar to regular TV viewing, viewers who wish to see a certain episode or movie on a FAST channel must tune in at a specific time of the day and may experience commercial breaks.
Major Difference between FAST and AVOD
FAST (free, ad-supported streaming TV), in striking contrast to AVOD (advertiser-supported video-on-demand), mimics the experience of linear TV. In contrast to free ad-supported TV (FAST) apps that host linear channels and distribute scheduled programming to a large audience through connected devices, ad-supported video-on-demand (AVOD) is controlled by the user and is triggered by individual viewing sessions that create inventory in which to serve personalized advertising.
While FAST openly advertises itself as a «lean back» experience, AVOD actively wants the spectator to interact. In contrast to FAST, where the platform chooses what viewers will watch and when, AVOD allows users to search the library for the content they want.
The revenue method is another distinction. FAST is entirely free, as the name implies. There are no fees associated with accessing the information. This strategy doesn’t necessarily preclude alternative video monetization strategies because AVOD adverts are the main source of revenue for AVOD. Some AVOD companies demand a fee to access their premium content.
FAST and VOD Future Prospectus
Even though gloomy observers see recent drops in subscriber counts from companies like Netflix as evidence that the streaming party is over, the truth is a little more nuanced than that. The majority of customers are scrimping and saving where they can given the state of the economy. Monthly subscriptions seem to be the first to go, so AVOD and FAST channels are essential for any marketing plan.
Every other TV business model lost viewing time to FAST and AVOD providers. AVOD/FAST now accounts for 22% of viewing time, up from 10% in Q4 2021. Additionally, it is envisaged that by 2027, the value of the AVOD tier will be $70 billion.
As audiences in many developed nations, such as the UK, are embracing ad-supported tier to reduce the cost of video consumption, it is likely that viewers will also embrace FAST and AVOD, or hybrids therein. The success of these platforms will depend on their ability to draw in and keep viewers engaged, as well as satisfy advertisers.
How to Integrate these Models?
Some businesses in the VOD sector combine the aforementioned methods to bring in money and offer customers services. Content providers are giving both models to their own niche audiences as both models have gained popularity over time. One such platform provider is Muvi, which has a solid reputation for providing a range of content monetization options. Based on your company strategy, you can monetize your content with Muvi right now.
It reduces transactional bother; all you have to do is concentrate on producing high-quality content while letting Muvi’s sophisticated billing engine manage all the transactions. All well-liked monetization models are supported by Muvi Billing right out of the box.
You may use Muvi to establish a White label VOD platform and live streaming platform. SVOD, Pay-Per-View, AVOD, Donations, Coupon codes, Gift cards and vouchers, credits, and more methods can be used to monetise your material. Take advantage of a 14-day free trial to learn how to increase your earnings utilizing various tactics.
