Advertising or not advertising, that’s the question of streaming

Subscribers of many streaming services are falling, and industry giants are already starting to think of new ways to offer their services. 

Just during the 1st semester of 2022, it is estimated that Netflix has lost two million users worldwide. This has reactivated the idea of offering cheaper plans with ads on (AVOD or FLASH). If we analyze United States’ market offer;  Apple+, Paramount+, and HBO Max already offer Ads On plans, which are approximately 5 dollars cheaper than Netflix itself.  

Even though many OTT platforms have implemented Ads, it is not so easy, since it requires an expensive marketing structure differentiated by country. In addition, an analysis of the transfer cost from the SVODs to the AVODs subscription will be required. Moreover, the income the ads provide must compensate for and surpass SVOD’s income. 

The good point of AVODs, for example, FAST, is that it allows sending more personalized messages and ads thanks to the data provided by users. Due to this, the volume of digital advertising is growing and, in some cases, surpassing the volumes of open and pay-TV together. 

Last but not least, AVODs will have to face the competition of free, even though their offer is not that extensive, and will need to define how many ads are acceptable for the audience.  

In a nutshell, the quality of offered content will be the one that defines whether a consumer chooses one platform or another.   

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