Why AVoDs could lose the video streaming wars?
9/25/2020, DAN TAITZ, President and Chief Operating Officer, Penthera
The recent slew of AVoD acquisitions by media giants like Fox and Comcast shows they understand ad-supported streaming is a smart investment. At the same time, online video ad spend grew 20% in 2019 and is expected to accelerate.
Ad-supported video businesses are now, for the first time, in a perfect position to overtake their subscription-based counterparts. While the OTT industry is going to face some serious challenges in the next couple of years, AVoDs should be able to overcome those challenges and come out ahead in the streaming wars.
Yet there's one problem many AVoDs have ignored that needs to be addressed – a problem that is costing the industry millions of dollars in lost ad revenue. And that's the fact that the mobile streaming experience remains flawed and frustrating for viewers.
STREAM ABANDONMENT is costing AVoDs millions, and mobile is to blame.
... often due to frustration with PLAYBACK DELAYS CAUSED BY CONNECTIVITY ISSUES. For ad-supported video providers, this translates directly into lost revenue.
Stream abandonment is especially problematic on mobile. Indeed, smartphones have the lowest average session time among devices (5.3 minutes compared to 21.3 minutes on CTVs and 12.4 minutes on PCs) and the highest buffer ratio (1.2%, compared to the average VoD buffer ratio of 0.49%).
...... Of course, mobile streaming problems like BUFFERING affect subscription-based content, too. But when ads are thrown into the mix the added complexity can create more issues and more opportunities for frustration.
In turn, this creates more chances for frustrated users to abandon the content they are watching, before the AVoD can get the ad dollars or engagement. Plus, when AVoD viewers abandon a stream because an ad is struggling to load, the provider not only loses out on the monetization – they also have to pay the ad serving cost. This means a poor user experience leads to a direct loss of revenue.
The OTT industry is losing millions of dollars in revenue because of poor experiences caused by connectivity issues, and AVoDs are particularly vulnerable to this. Solving stream abandonment is crucial to taking full advantage of the opportunity on the table, and the providers that innovate around stream abandonment are the ones who will come out on top.
Read the full text at: http://www.lightreading.com/cablevideo/why-avods-could-lose-video-streaming-wars/a/d-id/764211