Volume 5 No. 4: AVOD vs SVOD in the streaming wars
What if there were no more TV commercials?
For a while, ad-free, subscription-based streaming platforms like Netflix were taking off. People seemed plenty willing to pay a little extra to avoid ads.
For a while.
The fastest growing streaming platforms are subscription ad-based.
Each week, we break down a common misconception around TV advertising.
Despite the number of subscription-based platforms growing over the last year, SVOD penetration has declined.
This dip can be partly attributed to a drop in Netflix subscribers, which most blame on price hikes and growing competition. The drop was so detrimental that Netflix announced they’ll soon roll out a less-expensive ad-supported tier.
But even generally, consumer dissatisfaction with content options on SVOD platforms has grown in tandem with rising prices. Despite having more options than ever, people feel there’s nothing to watch. This shift has resulted in some cord-cutters returning to Pay TV, a group known as cord-revivers.
Others are looking to less-expensive AVODs as the solution. As a result, AVOD penetration continues to grow, and it’s clear TV advertising isn’t going anywhere, even as streaming eventually becomes the status quo. FASTs remain especially popular.
There is a notable exception to the SVOD decline. ESPN+ saw an impressive 31.5% increase in user growth this year, likely a result of its bundle with Hulu and Disney+.
Why is this? AVODS are the fastest-growing streaming platforms and will remain so while SVODs tackle high churn rates. Advertising has been proven to be a key part of consumers’ TV viewing experiences and services’ business models.
Question: What should every brand know before watching TV?
We take the web’s most searched questions about TV advertising to a range of marketing experts who can’t help but love TV.
Answer: "Before you launch TV, know that it’s going to change the life of your brand. It's going to ignite curiosity from consumers. People are going to get to know you. They're going to look for you when they're in-market for your product. But make sure you're aligned internally on your brand story because that consistency in your message will be so important as more people get to know you."
— Devan Futterer, Sr Account Director
Devan strategizes with clients to help their campaigns reach the next level. Outside of work, you can find him starting his next DIY house project, at the park with his son, or obsessing over the Green Bay Packers.
Watch: How to Get Your Ideas to Spread
Here we celebrate books, podcasts, videos, and influencers that are actively pushing marketing into the future.
Entrepreneur and author Seth Godin applies his marketing expertise to the digital age in his Ted Talk “How to get your ideas to spread.” Because we live in a world with so many options, ordinary ideas are unremarkable and therefore unmemorable. Godin explains the best way to get your ideas to spread and find success is by standing out—sometimes by being a little bizarre.
Our favorite insight? Godin’s tough on mass marketing because of the “ordinariness” of advertising on these channels. Here’s where we disagree (respectfully) with the marketing guru. We’d argue you can have an incredible impact by applying Godin’s focus on remarkability to those channels.
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