Julia Stoll
Research expert covering TV and video media
Ad-supported video-on-demand in the United States - statistics & facts
The video streaming market is approaching a state of universal appeal. There are now multiple options available according to price, content variety and quality, and ease of use. With no subscription fees and expanding content libraries, the usage of the streaming segment’s ad-supported video-on-demand (AVOD) in the United States is growing on a quarterly basis. Industry experts generally agree that advertising is more profitable than subscription-only revenue. In an entertainment environment in which streaming services are increasingly looking for possibilities to generate positive income, this business model could be key. By contrast to subscription video-on-demand (SVOD), AVOD services charge their users only a fraction of the ad-free price and get the majority of their revenue from advertising.
For consumers unwilling to financially commit to SVOD, but who still prefer large on-demand libraries, AVOD appears to be a good option. With AVOD subscriptions increasing at a faster pace than ad-free options in the U.S., advertising-based streaming could have a bright future.
AVOD drivers
Although ad-supported and subscription-based streaming services are not necessarily in competition with one another, each model appeals to different audiences. Older age groups tend to be more interested in ad-supported streaming content due to cost saving reasons than their younger counterparts. Indeed, with the video streaming market saturating and services increasing their subscription fees, an increasingly share of viewers would rather watch ads and save money. On the other hand, the demographic group 18 to 54 years had more AVOD subscriptions than older generations, according to a 2023 survey.The most popular AVOD services
In order to respond to this heightened level of user engagement, several large SVOD services, such as Netflix, Disney+, and Amazon Prime Video, have launched their own ad-supported tiers. Success has proved them right: the share of Amazon Prime Video subscribers choosing the ad-supported tier in the U.S. and Canada expanded to nearly one third in the third quarter of 2024. Other AVOD services have seen consistent subscriber increases in recent years as well. For example, Tubi grew its userbase by over 40 million between May 2022 and the end of 2024 alone. Roku is also going from strength to strength, having nearly tripled its number of active accounts in five years.For consumers unwilling to financially commit to SVOD, but who still prefer large on-demand libraries, AVOD appears to be a good option. With AVOD subscriptions increasing at a faster pace than ad-free options in the U.S., advertising-based streaming could have a bright future.
