In today’s streaming landscape, creators face a challenge: producing engaging content and ensuring it reaches the right audience. Traditional distribution models often come with high costs and rigid structures, which can limit independent filmmakers and small studios. Advertising-based Video-on-Demand (AVOD) platforms have emerged as a potential solution.
But is AVOD monetization the right choice for creators? Let’s explore the pros and cons.
What is AVOD?
AVOD is a monetization model where viewers access content for free, with revenue generated through advertisements shown during playback. To compare, Subscription-based Video-on-Demand (SVOD) charges recurring fees, and Transactional-based Video-on-Demand (TVOD) requires viewers to pay per movie. And AVOD relies on ad placements to fund operations and reward creators.
AVOD-based platforms bridge the gap between creators, advertisers, and viewers, making this model increasingly popular.
Pros of AVOD for Content Creators
#1 Revenue Without Upfront Costs
AVOD model eliminates the financial barriers associated with traditional distribution. Filmmakers can monetize their content without requiring viewers to pay directly,. They share advertising revenue with the streaming platform. This provides creators with a reliable income stream.
#2 Broader Audience Reach
With content available for free, AVOD platforms attract diverse audiences. This monetization strategy is especially appealing to those who prefer to avoid subscription fees. As it eliminates being tied to a platform, the model becomes ideal for viewers who seek flexibility and control over how and where they consume content.
#3 Retaining Control Over Content
Unlike some traditional deals, AVOD platforms allow creators to maintain full control of their work, preserving intellectual property rights and reducing risks.
#4 Community Building
AVOD platforms often promote creators’ content through social media and other channels, helping build a fan base. Filmmakers can cultivate a community around their art, creating opportunities for deeper engagement and loyalty.
#5 Additional Business Opportunities
AVOD enables creators to explore collaborations, sponsorships, and even potential acquisitions. Some platforms offer flexibility to build a personalized channel, allowing filmmakers to strengthen their brand and expand their reach with minimal bureaucracy.
#6 Viewer Acceptance of Ads
Studies show that 84% of viewers are willing to watch ads in exchange for free content, making AVOD an attractive option for advertisers and distributors alike. This growing acceptance can significantly expand viewership.
Cons of AVOD for Content Creators
#1 Reliance on Advertiser Interest
Revenue generation depends on securing advertisers, which can be competitive and unpredictable. Platforms must balance the interests of advertisers, creators, and viewers, adding complexity to the model.
#2 Revenue Splits
While sharing ad revenue ensures creators earn without upfront costs, the split means filmmakers might earn less per view compared to direct sales or premium subscription services.
#3 Ad Insertion Challenges
Depending on the platform’s technology, ad placement can disrupt the viewer experience. Server-side ad insertion (SSAI) might ensure seamless playback and bypass ad blockers, but not all AVOD platforms offer such smooth integration.
#4 Limited Revenue for Niche Content
Content catering to particular audiences might struggle to attract advertisers willing to pay premium rates, potentially limiting earnings.
#5 Competitive Landscape
AVOD platforms often host a vast library of content, making it challenging for individual creators to stand out without additional promotional efforts.
Is AVOD Right for You?
AVOD offers a low-risk, high-reach opportunity for creators to distribute and monetize their content. But it’s not without challenges, particularly for those creators who seek higher payouts or target niche audiences. AVOD platforms might mitigate some of these challenges as they offer direct access to unique markets and use advanced ad insertion technology.
AVOD can be suitable for filmmakers prioritizing audience growth and community building over immediate profit margins. Understanding its intricacies and aligning them with your goals is key to making the most of this model.