Analyst: Exclusives key for AVoD growth
April 21, 2022
Major AVoD platforms have joined the original content goldrush, with groups such as Roku, Tubi and IMDb TV (soon to be Freevee) collectively releasing over 100 brand new original titles in the last two years. A report from Ampere Analysis also finds that the US AVoD services with the highest investment in original content have also seen the largest growth in usage. Tubi, which has launched 20 original titles, saw monthly usage grow by 164 per cent, by Ampere’s estimates, between Q3 2020 and Q3 2021.
The increasing investment in original content mirrors the moves from subscription streamers, allowing providers to add exclusive content to their catalogues amidst a backdrop of a shrinking pool of licensable content as the major studios bring content in-house for their SVoD services. And catalogue exclusivity has proved crucial in such a competitive market; AVoD services with higher volumes of exclusive content benefit from greater usage.
AVoD originals cannot compete with titles from larger SVoD services
But AVoD platforms can’t match the billions of dollars spent by the leading SVoD players in the creation of original content. AVoD services are smaller in scale, and the advertising business model will struggle to justify the sorts of multimillion dollars per-hour content investments which the leading Subscription VoD players have applied to new flagship titles. However, according to Ampere’s analysts, one fundamental calculation for investing in original content remains true for both service types: As platforms expand globally, original content investments scale well. Investing in originals is a consistent way to offer exclusive content worldwide without incurring additional licensing costs in each market.
Additionally, while AVoD originals do not yet provide enough of a draw to pull viewers away from larger SVoD platforms entirely, they do differentiate services within the increasingly fragmented AVoD market, and offer a reason for viewers to choose one service over another.
AVoD strategies vary
In the early stages of original programming, strategies between AVoD platforms vary. Roku has invested more extensively in original-branded content, in part because of its acquisitions of Quibi’s content assets and its focus on low-cost-per-hour content. Of the six most popular AVoD platforms in the US, Pluto TV is the only one not to have invested meaningfully in original programming – although it is in a position to take advantage of the programming slate of its parent company – Paramount – and outside the US has become the temporary home for hit Paramount originals such as Star Trek: Discovery.
“Despite AVoD originals not having an impact in the wider streaming market – largely limited by their current lack of reach –AVoD platforms should not stop their investment,” advises Joseph Hall, Analyst at Ampere Analysis. “Our analysis shows that the AVoD platforms with the highest growth in use since Q3 2020 are those with the most released or announced original programming.”