AVOD: Free Streaming Explained

What is it?

AVOD stands for Advertising-based Video on Demand. It is a streaming business model where viewers can access a library of TV shows and movies for free, with the service being funded by advertisements shown before, during, and after the content. Unlike subscription-based models (SVOD) like Netflix's standard plan, AVOD services such as Tubi, Pluto TV, and Freevee generate revenue from advertisers rather than viewers' monthly fees. This model mirrors traditional broadcast television, but with the on-demand flexibility modern audiences expect.

Why is it trending?

A primary driver for AVOD's growth is "subscription fatigue." As the number of paid streaming services increases, consumers are becoming overwhelmed by the cumulative cost and are actively seeking free alternatives. Economic pressures also encourage viewers to cut back on discretionary spending, making free, ad-supported options more attractive. Furthermore, major media companies are heavily investing in AVOD, launching their own services or adding cheaper, ad-supported tiers to existing platforms, which legitimizes and popularizes the model.

How does it affect people?

For consumers, AVOD makes a vast catalog of entertainment accessible without a financial barrier, democratizing access to content. The trade-off is the interruption of ad breaks, a familiar experience for anyone who grew up with cable TV. For the entertainment industry, AVOD provides a crucial alternative revenue stream and a way to reach cord-cutters who are no longer accessible through traditional TV advertising. It diversifies the streaming landscape, giving viewers more choices in how they consume and pay for their entertainment.

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