Imagine for a moment that you’re out shopping in your local supermarket, and as you pass one of their new product sampling stands, you’re offered a small glass of the “Finest Sparkling Wine”. The staff member tells you - as they hand over the glass - that it’s a dry and crisp sparkling wine made in England… yet you find it’s closer to carbonated apple juice than an alternative to Champagne. Imagine your disappointment had you bought a whole bottle of the stuff? Having the opportunity to sample a product before purchasing is a great way to avoid this, so we ask: does this have a parallel in the OTT industry?
Would you like a free sample?
The whole concept of try before you buy is one of the key benefits of advertising video-on-demand (AVOD). Think of it as an opportunity for your customers to preview content before they decide to purchase it. You can give them a taste of your content offering for free, while still generating revenue from advertising, further topping this up by offering titles as one-off transactional (TVOD) purchases. Video piracy is costing the US economy between $29.2 and $71 billion each year, with more than 80% of global online piracy attributed to illegal streaming services. AVOD can provide an alternative for the masses that turn to these illegal services, at no cost to them while still generating revenue for you.
An average adult makes around 35,000 conscious decisions each day. Making a decision should be as simple as possible when you’re asking someone to part with their hard-earned money. Give them the option to see the content for free – with advertising – and then provide them with the option of removing those ads with a TVOD purchase. We can’t imagine watching the Lord of the Rings trilogy with the odd jewellery shop advert interrupting our experience (even if it is somewhat thematic…), so making a TVOD purchase to watch that trilogy ad-free would benefit us. Simplestream can provide both AVOD and TVOD models – standalone or combined in a hybrid solution – across all popular devices and major platforms, through our out-of-the-box set of applications available on App Platform.
The perfect pairing
The AVOD market was worth $33 billion in 2021, and that’s only set to increase in the coming years. Gone are the days of the DVD collection, as people don’t want to be lumbered with yet more physical items, instead opting for buy-to-own TVOD purchases for the films and tv series they love. The TVOD market is projected to reach $10.42 billion in 2022, so this market holds a significant opportunity, especially if utilised in addition to the AVOD model.
We really have come full circle, from linear broadcast to SVOD, and now seeing a return to advertising-supported distribution. It’s not a stretch to see the value that TVOD will add, as even with the targeted and relevant advertising that Server-Side Ad Insertion (SSAI) offers, some will still prefer an uninterrupted experience for their favourite titles. Much like a wine pairing for your favourite meal, TVOD could be the complimenting tipple to your AVOD model, cheers.