Glad about ads? Why viewers are favouring AVOD plans lately
The value exchange proposition when it comes to digital media and content has evolved. What’s especially remarkable is the rapid pendulum swings the industry has gone through. But now, with the proliferation of OTT channels, ad-supported content is becoming increasingly popular with consumers, signifying a major change in consumer habits.
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Life in the FAST lane
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“With over 46 OTT channels and 500+ FAST channels, along with diverse genres that transcend language and geographical barriers, consumers have an unprecedented array of content choices irrespective of the devices. Users prioritize access to a wide variety of content, whether it is ad-supported or ad-free. Moreover, advertising on CTV platforms is not inducing significant fatigue, and any potential concerns about ad overload can be addressed as they arise,” observes Nikhil Kumar, Chief Growth Officer, mediasmart by Affle. Experts across the board agree that there is a discernible paradigm shift brewing in the Indian video consumption landscape. “Advertising is no longer being perceived as an unwanted imposition, but rather as an acceptable value exchange for accessing premium content without exorbitant upfront costs. This perspective is particularly prevalent among younger demographics adept at navigating the ad-viewing experience across multiple touchpoints,” notes Russhabh R Thakkar, Founder and CEO, Frodoh World. For Thakkar, the proliferation of AVOD and FAST models represents a seismic shift in how Indian audiences are consuming and valuing content today. With a fragmented media landscape offering a dizzying array of SVOD, AVOD, OTT and bundled options, convenience and affordability have emerged as key determinants driving viewer choices. “While the ad-free subscription model was once touted as the holy grail, we are now witnessing a renaissance of ad-supported consumption. This harks back to the traditional TV era when advertising was an accepted norm. However, what sets the modern AVOD/FAST experience apart is the ability to offer premium long-form content absolutely free to consumers, while generating revenue through strategic, contextual advertising,” he says. And this is not least because of the scattered digital media landscape, where there are a plethora of screens of all sizes and indeed, internet connections of all speeds and costs. “Smart TVs, in particular, have become more accessible due to competitive pricing from smaller manufacturers. Today, a Smart TV manufacturer - irrespective of the price point of the TV - is integrating FAST channels directly. This integration offers users easy access to a wide range of free content without needing additional devices or subscriptions,” says Kumar, noting that unlike traditional linear television, which often requires additional fees for popular channels, FAST offers these channels for free, supported by advertisements. Deleise Ross, Senior VP and Business Head, MudraMax, points out that SVOD targets niche audiences who are willing to pay for their desired content either monthly, quarterly or annually, and offers significant benefits, including predictable and recurring revenue; better profit margins; and a better customer base. Whereas AVOD with unlimited videos for free, ensuring a vast reach and democratic viewership. YouTube stands out as the most prominent example of AVOD advertising. The revenue generated from ads is strategically utilized to offset production costs, manage the expenses of the best online video hosting platforms, and facilitate content delivery. YouTube promoting its ad-free subscription platform is primarily to attract Premium audiences that have the money to shell out on a monthly basis. Connecting the dots “Advertising on FAST channels is available through two mediums - one is within the OEM ecosystem with every Smart TV manufacturer (Xiaomi, TCL and others) having their own FAST ecosystem; the other is through FAST aggregators who provide access to FAST across OEMs. On mediasmart, we currently work with different players and curate 500+ FAST channels to our advertisers,” says Kumar, noting that the flexibility to access different types of content without committing to a subscription encourages viewers to explore these ad-supported options. Ross chimes in saying, “Creating an effective video monetization platform is a smart move that goes beyond just providing content. It ensures that you can deliver great content to a carefully selected group of users while also keeping a steady income and growing your successes. The ever-changing world of VOD needs you to be flexible, creative, and committed to meeting what your users want.” This also means that the rise of ad-supported streaming is not necessarily a disconnect for platforms, but highlights the need for a mixed strategy to succeed. While YouTube promotes its Premium ad-free tier for viewers willing to pay for an uninterrupted experience, its ad-supported offerings remain crucial to monetize the large user base that prefers free content. “This elevated value proposition positions ad-supported consumption not as a compromise, but as an empowering choice for cost-conscious Indian audiences to access a wide array of premium entertainment options without recurring financial commitments. As data costs decline and connectivity proliferates further, this ad-supported renaissance is poised to go truly mainstream across India,” says Thukkar. What has catalyzed this mindset evolution is the ability of leading AVOD/FAST platforms to deliver highly engaging, relevant ad experiences that seamlessly complement the content stream. “By leveraging granular targeting based on factors like language preferences, location, content genres and viewing habits, they can serve ads that feel contextual and non-intrusive to the viewer,” he adds.
In 2016, when Netflix and other platforms started streaming, audiences accustomed to seeing TV content punctuated by commercials welcomed the idea of paying a platform for ad-free content.
Tags : Affle Mediasmart Streaming App Ad Supported Plan Avod Ott Platform