By: The BitMar Team.
Image Source: Gemini.
The streaming industry is undergoing a significant transformation, with ad-supported video on demand (AVOD) models rapidly gaining traction. As viewers seek more affordable entertainment options and platforms explore new revenue streams, understanding the trajectory of ad-supported streaming is essential. This shift impacts how consumers access content and how advertisers reach their target audiences.
A key driver behind AVOD's growth is consumer demand for free or lower-cost entertainment alternatives. According to a report by Persistence Market Research, the global AVOD market was valued at approximately US$41.3 billion in 2024 and projects a market value of US$125.5 billion by 2031. This highlights a clear trend: many consumers are willing to watch advertisements in exchange for reduced or no subscription fees, especially as the number of subscription video on demand (SVOD) services increases.
The increasing adoption of ad-supported tiers by major streaming players further signals a market evolution. Initially, many premium services focused exclusively on ad-free subscription models. However, as the market matures, these platforms are introducing ad-supported plans to attract a broader customer base. Ampere Analysis consumer data, as of January 2025, showed that 24% of United States-based Netflix subscribers were on an ad-supported tier, indicating a significant acceptance of this model among users of established services.
Technological advancements also play a crucial role in the future of ad-supported streaming. The rollout of 5G networks and increased high-speed internet penetration enhance the viewing experience on AVOD platforms, making them more appealing. Furthermore, as Persistence Market Research notes, the growing use of artificial intelligence and machine learning in ad targeting presents opportunities for AVOD platforms to deliver more relevant and less intrusive advertising, which may improve viewer satisfaction.
Despite the growth, the AVOD market faces challenges, including competition from ad-free SVOD services and the risk of ad fatigue if viewers are oversaturated with commercials. However, the trend of service stacking, where consumers subscribe to multiple services including AVOD options, suggests that various models can coexist. Kantar's research from Q1 2025 in Australia found that ad-supported tiers more than doubled in household penetration year-over-year and that AVOD customers were more likely to hold five or more video-on-demand subscriptions.
The future of streaming likely involves a hybrid approach, where consumers mix and match various services—including AVOD, SVOD, and FAST (Free Ad-Supported Streaming TV) channels—to suit their preferences and budgets. As ad-supported streaming continues to evolve, it will likely become an even more integral part of the overall viewing experience, offering more choices for consumers and new avenues for content monetization.
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