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- The Year of AVOD
Happy New Year Hollywood tech nerds!
In this week’s post:
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The Year of AVOD
Friends, it’s 2024! What are your most and least-anticipated events of the year? For me my most/least are Dune: Part Two and my Aunt Joan’s getting out of jail party.
Second on that least list, though, HAS to be shelling out even more scratch for these subscription video services. Everybody who uses Amazon Prime recently received the following email about their streaming video service:
Obviously other services like Netflix and Max have introduced ad-supported tiers, but typically as alternative lower-priced options than their baseline subscription service. So what’s going on here?
According to Brian Dean at Backlinko, “Amazon has an estimated 167.2 million Amazon Prime Members” in the US and 157.1 million of them use the Prime Video service. That’s a ton of potential eyeballs to which advertisers would LOVE exposure.
I’m guessing Amazon’s gamble is that most people on Prime use it actively for free 2 day delivery and are only sporadic watchers of content on their streaming service, so showing them a few ads wouldn’t be enough to drive them out of Prime membership entirely. The subset who really do care about ads will grudgingly shell out the extra $2.99 for pristine ad-free viewing of a random assortment of movies and The Boys. You know, people like me! It’s a win/win for them: more opportunities for revenue from both groups.
As I’ve written before, expect to see a continued drive towards AVOD and FAST channel type services from the major players as the scalability of SVOD hits its built-in limits. New TV is going to start looking a lot like old TV!
Content in an Ad-Supported World
This week is something of a two-parter: the shift to an advertiser-supported vision of content distribution means one thing for the business, but what does it mean for the content?
As Elon Musk has learned the hard way, advertisers tend to be sensitive about what their ads are played against, which is probably why all the advertising I see on X/Twitter now consists of crypto scams and full-frontal nudity.
The appeal of subscription services is partially that it puts the media they produce outside the realm of advertiser influence. Does The Boys get made if there are advertising considerations at play? Perhaps, but certainly in a much-censored form.
I spoke to one of my contacts with previous experience at an AVOD streamer, and they had this to say about the type of content they were most interested in:
I think anybody who has a library of content that has been played on regular TV is in a good place. Old sitcoms, procedurals, cooking shows, anything that’s been pre-vetted is attractive for advertisers. They know it’s not going to be a case of somebody’s head getting chopped off and then cut to a commercial for diapers.
TV versions of your movies are important. I’m always surprised when studios don’t have a sanitized cut of some action or sci-fi movie. Those are just easy sells. Anybody thinking “could someone sell advertising against this?” has their head in the right space, content-wise.
Kernels (3 links worth making popcorn for)
Here’s a round-up of cool links about Hollywood and technology:
Variety on Apple TV+’s biggest problem. (link)
The 15 best movies you missed in 2023. (link)
Is Google’s unchecked dominance about to be over? (link)