The advertising-based video on demand (AVOD) market is a dynamic segment within the digital entertainment landscape, witnessing significant growth and evolution. The AVOD market is expected to grow at a CAGR of 29.2% during the forecast period of 2024 to 2032, driven by key drivers such as the rising trend of digital content consumption, the adoption of AVOD by content creators and publishers, and the global expansion of AVOD platforms. However, the challenge of ad fatigue and user experience concerns poses a significant restraint that requires careful consideration. The nuanced segmentation of the market by advertisement position, device, and geographic region provides insights into the dynamic strategies and preferences shaping the AVOD landscape. Geographically, the Asia-Pacific region emerges as a key driver, reflecting the region's rapid digitalization and the popularity of AVOD services. In the competitive landscape, top players play a pivotal role, leveraging their extensive content libraries and strategic initiatives to maintain market dominance.

Rising Digital Content Consumption: Fueling Demand for advertising-based video on demand (AVOD)

The AVOD market is driven by the surging popularity of digital content consumption. Evidence includes the exponential increase in online video viewership across platforms, with users increasingly preferring on-demand access to a diverse range of content. This driver is underscored by the shift from traditional linear TV to digital streaming platforms, as evidenced by the growing number of subscribers to AVOD services. The market has experienced a paradigm shift in consumer behavior, with viewers seeking personalized and ad-supported content, creating lucrative opportunities for AVOD platforms. As evidenced by the substantial increase in user engagement and the number of hours spent on AVOD services, the rising trend of digital content consumption is a primary driver shaping the market's trajectory.

Adoption of AVOD by Content Creators and Publishers: Monetizing Digital Content through Advertising

The AVOD market is propelled by the widespread adoption of AVOD models by content creators and publishers. Evidence includes the strategic partnerships between content creators and AVOD platforms to monetize content through targeted advertising. This driver is emphasized by the increasing number of content creators opting for ad-supported models to reach a wider audience and generate revenue through advertisements. As evidenced by the success stories of content creators who have effectively leveraged AVOD platforms, adopting AVOD as a monetization strategy has become a mainstream trend in the digital content ecosystem. The collaborative efforts between content creators and AVOD platforms are driving the market's growth, providing consumers with free access to premium content supported by targeted advertisements.

Global Expansion of AVOD Platforms: Tapping into International Markets for Growth

The AVOD market is experiencing robust growth due to the global expansion of AVOD platforms. Evidence includes AVOD services extending their reach to international markets, and capitalizing on the growing demand for ad-supported content worldwide. This driver is highlighted by the strategic localization of content and advertisements to cater to diverse cultural preferences, expanding the user base beyond domestic boundaries. As evidenced by the increasing partnerships and collaborations between AVOD platforms and content creators from different regions, the global expansion of AVOD is a key driver influencing market dynamics. The ability of AVOD platforms to offer region-specific content and advertisements contributes to their success in penetrating and thriving in new markets.

Ad Fatigue and User Experience Concerns: Balancing Revenue Generation with User Satisfaction

A notable restraint in the AVOD market is the challenge of ad fatigue and user experience concerns. Evidence includes the potential negative impact of excessive advertisements on user satisfaction and engagement, leading to a decline in the overall viewing experience. This restraint is emphasized by user preferences for a seamless and uninterrupted content-watching experience, raising concerns about the balance between revenue generation through ads and ensuring a positive user experience. As evidenced by user feedback and surveys indicating dissatisfaction with intrusive or repetitive advertisements, addressing ad fatigue and user experience concerns is crucial for AVOD platforms to retain and attract a loyal user base.

By Advertisement Position: Mid-roll Advertisements Dominate the Market

In 2023, the AVOD market showcased substantial revenue from Mid-roll advertisements, positioned during the middle of content consumption. Simultaneously, Pre-roll advertisements exhibited the highest CAGR during the forecast period from 2024 to 2032, indicative of the growing preference for ads preceding the main content. This nuanced segmentation illustrates the dynamic nature of ad positioning strategies, with Mid-roll ads catering to user engagement during content consumption and Pre-roll ads gaining traction for capturing immediate attention.

By Device: Mobile Device Segment Dominates the Market

The AVOD market demonstrated significant revenue from Mobile devices in 2023, reflecting the increasing trend of content consumption on smartphones. Simultaneously, TV devices exhibited the highest CAGR during the forecast period, signifying the growing adoption of smart TVs and connected devices for AVOD services. This comprehensive segmentation highlights the diverse platforms through which users access AVOD content, with Mobile devices dominating in terms of revenue and TV devices driving the highest growth.

APAC Remains the Global Leader

Geographically, the AVOD market exhibited dynamic trends in 2023, with the Asia-Pacific region leading in both revenue generation and the highest CAGR. This reflects the region's significant contribution to the global AVOD landscape, driven by the increasing digitalization of entertainment and the availability of affordable smartphones. North America also contributed significantly to revenue, driven by a mature digital content ecosystem and a large base of digital consumers. Europe, while demonstrating a robust market, experienced a slightly lower CAGR, indicative of the mature nature of the market in the region. This geographic segmentation underscores the global nature of the AVOD market, with different regions playing distinct roles in shaping its trajectory.

Market Competition to Intensify during the Forecast Period

In the competitive landscape, top players such as YouTube, Hulu, Roku, Facebook, IBM, Vimeo, Brightcove, Vidyard, Kaltura, Dailymotion, Vdocipher, SymphonyAI Media, Muvi, and Dacast are instrumental in steering the AVOD market. These industry leaders, with their extensive content libraries, user-friendly interfaces, and strategic partnerships, have significantly influenced market dynamics. In 2023, these companies demonstrated strong revenues, and their continued investments in content acquisition, user engagement strategies, and global expansion position them as key contributors to the market's growth. As the AVOD market progresses into the forecast period from 2024 to 2032, these industry leaders are expected to maintain their dominance and play a pivotal role in shaping the market's future.

Historical & Forecast Period

This study report represents analysis of each segment from 2022 to 2032 considering 2023 as the base year. Compounded Annual Growth Rate (CAGR) for each of the respective segments estimated for the forecast period of 2024 to 2032.

The current report comprises of quantitative market estimations for each micro market for every geographical region and qualitative market analysis such as micro and macro environment analysis, market trends, competitive intelligence, segment analysis, porters five force model, top winning strategies, top investment markets, emerging trends and technological analysis, case studies, strategic conclusions and recommendations and other key market insights.

Research Methodology

The complete research study was conducted in three phases, namely: secondary research, primary research, and expert panel review. key data point that enables the estimation of Advertising-Based Video On Demand market are as follows:

• Research and development budgets of manufacturers and government spending
• Revenues of key companies in the market segment
• Number of end users and consumption volume, price and value.
• Geographical revenues generate by countries considered in the report
• Micro and macro environment factors that are currently influencing the Advertising-Based Video On Demand market and their expected impact during the forecast period.

Market forecast was performed through proprietary software that analyzes various qualitative and quantitative factors. Growth rate and CAGR were estimated through intensive secondary and primary research. Data triangulation across various data points provides accuracy across various analyzed market segments in the report. Application of both top down and bottom-up approach for validation of market estimation assures logical, methodical and mathematical consistency of the quantitative data.

Key questions answered in this report

• What are the key micro and macro environmental factors that are impacting the growth of Advertising-Based Video On Demand market?
• What are the key investment pockets with respect to product segments and geographies currently and during the forecast period?
• Estimated forecast and market projections up to 2032.
• Which segment accounts for the fastest CAGR during the forecast period?
• Which market segment holds a larger market share and why?
• Are low and middle-income economies investing in the Advertising-Based Video On Demand market?
• Which is the largest regional market for Advertising-Based Video On Demand market?
• What are the market trends and dynamics in emerging markets such as Asia Pacific, Latin America, and Middle East & Africa?
• Which are the key trends driving Advertising-Based Video On Demand market growth?
• Who are the key competitors and what are their key strategies to enhance their market presence in the Advertising-Based Video On Demand market worldwide?