More than 60 percent of all streaming users worldwide now use at least one ad-supported service โ€“ and this trend is growing. AVOD, short for Advertising-based Video on Demand, is no longer a niche model but a standalone segment of the global streaming market. This article explains what's behind it, how it differs from other models, and why it's currently experiencing such strong growth.

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AVOD, SVOD, FAST: Three Models, One Market

The streaming market is broadly divided into three financing models. SVOD โ€“ Subscription Video on Demand โ€“ is the most well-known: users pay a fixed monthly fee and receive ad-free access. Netflix, Amazon Prime Video, and Disney+ operate on this principle. AVOD works the other way around: access is free, financed by ad clips shown before or during the content โ€“ comparable to traditional free-to-air TV, but on demand.

FAST stands for Free Ad-Supported Streaming Television and is a special form of the AVOD model: here, linear channels are simulated, meaning continuously running streams without a pause function. The difference from classic AVOD lies in the user experience โ€“ FAST feels more like television, while AVOD offers true on-demand streaming. However, both models share the basic principle: free access, financed by advertising.

In addition, there is TVOD โ€“ Transactional Video on Demand. Here, users pay per title, for example, when renting or buying a movie. Today, TVOD plays a minor role but complements many AVOD and SVOD platforms as an optional add-on purchase.

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Why AVOD is growing: +21% Market Share in Three Years

The numbers speak for themselves. According to an analysis by Ampere Analysis, the global AVOD market grew by more than 21 percent between 2021 and 2024 โ€“ faster than the SVOD segment during the same period. The main driver of this development is increasing price pressure: In Germany, the UK, and Italy, Netflix, Amazon, and Disney+ have repeatedly increased their subscription prices between 2022 and 2024. The result: users are actively looking for free alternatives.

In addition, there's a general shift in media consumption. Younger target groups โ€“ especially 18- to 34-year-olds โ€“ are increasingly accepting advertising as part of the user experience, provided the value proposition is right. Studies by Deloitte and Kantar show that around 40 percent of surveyed streaming users in Europe are willing to accept up to four minutes of advertising per hour if the service remains free as a result.

The model is also attractive from the provider's perspective: Advertisers get significantly more precise targeting options in the AVOD environment than in traditional TV. This drives up CPMs โ€“ the cost per thousand ad impressions โ€“ and makes AVOD economically viable for platforms, even without subscription fees.

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How AVOD works in practice: Technology, Advertising, User Data

Technically, AVOD is based on the so-called ad insertion process. Ad blocks are dynamically integrated into the video stream โ€“ either as pre-roll (before the content), mid-roll (during the content), or post-roll (afterward). Unlike traditional TV advertising, each user can be shown different ads based on location, time of day, device, and โ€“ where legally permissible โ€“ demographic characteristics.

Data protection plays a central role here. In Europe, the GDPR stipulates that personal data may only be used for targeting purposes with explicit consent. Reputable AVOD platforms therefore work with consent management systems and offer users the option to choose contextual rather than behavioral advertising. Contextual targeting โ€“ i.e., advertising that matches the content of the current film, not the user profile โ€“ is therefore gaining importance again in Europe.

For the user, the everyday difference is manageable: A typical AVOD service shows between two and six minutes of advertising per hour. In comparison: traditional free-to-air TV averages 12 to 15 minutes of advertising per hour. AVOD is therefore significantly less ad-intensive than linear television, which many know as a reference.

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AVOD in Numbers: What the Market Shows

โ€ขย ย ย ย ย  Over 60% of streaming users worldwide use at least one AVOD service (Source: Whip Media, 2024).

โ€ขย ย ย ย ย  The global AVOD advertising market is estimated to exceed 66 billion USD in 2025 (Source: Statista).

โ€ข 40% of European streaming users accept advertising if the service remains free (Source: Deloitte Digital Media Trends).

โ€ข Netflix and Disney+ introduced ad-supported entry-level plans in 2022โ€“2024 โ€“ a clear signal of the AVOD model's relevance.

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The Free Alternative: AVOD as a Standalone Model

While large platforms position AVOD as a cheaper entry-level option alongside their subscriptions, there are services that were built from the ground up on this model. wedotv is an example of this: The platform offers movie and series streaming entirely for free โ€“ no subscription, no hidden costs. The service is funded exclusively by advertising.

The difference from an SVOD provider's ad-supported plan lies in the approach: Pure AVOD services are not designed as an entry into a more expensive subscription, but as a complete, permanently free service. For users who don't want to commit to a monthly subscription or already have multiple subscriptions, this is a different model โ€“ not a worse one, but a different one.

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Conclusion

AVOD is not a transitional solution, but an established and structurally growing segment of the streaming market. The combination of rising subscription prices, growing ad acceptance among younger target groups, and improved targeting technology makes the model attractive for users, platforms, and advertisers alike. Whether AVOD will become the dominant model in streaming in the long term depends not least on how effectively platforms balance user experience and data privacy. The direction is clear, however: Free streaming โ€“ financed by advertising instead of subscriptions โ€“ is here to stay.

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Frequently Asked Questions

What does AVOD mean?

โ€AVOD stands for Advertising-based Video on Demand โ€“ free streaming financed through advertising. Users get free access to films and series; the service generates revenue through ad placements before or during content.

What is the difference between AVOD and SVOD?

โ€SVOD (Subscription Video on Demand) requires a monthly subscription for ad-free streaming โ€“ like Netflix or Amazon Prime Video. AVOD is free and ad-supported instead. Both offer on-demand content but differ fundamentally in their business model.

What is the difference between AVOD and FAST?

โ€AVOD offers true on-demand streaming: users choose content freely and can pause or skip. FAST (Free Ad-Supported Streaming Television) simulates linear channels โ€“ similar to traditional TV, but streamed. Both are free and ad-supported.

How many ads does AVOD show?

โ€A typical AVOD service shows between two and six minutes of advertising per hour. That's significantly less than traditional free-to-air TV, which averages 12 to 15 minutes of ads per hour.

Is AVOD free?

โ€Yes โ€“ AVOD services are completely free for users. No subscription or credit card is required. The service is funded entirely through advertising revenue.

Is wedotv an AVOD service?

โ€Yes. wedotv is a pure AVOD service: all content is freely accessible, with no subscription or hidden costs. The platform is funded exclusively through advertising.

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