The Rise of SVOD: Outlook for Advertisers


 

The streaming video landscape just got significantly more crowded after product announcements from Disney and Apple in recent weeks. Both companies plan to unveil subscription video on-demand (SVOD) services in the fall of 2019 to rival Netflix and Amazon with access to a variety of premium content.

The Rise of SVOD

Disney made news last week with the official announcement of their upcoming SVOD service, Disney+. Disney is expected to feature original content from their Marvel and Star Wars properties prominently in the new streaming service. There are also rumors of a potential bundle with Disney+, ESPN+, and Hulu (Disney now owns a 60% stake in Hulu after their FOX acquisition). Apple also recently announced their foray into the TV business with Apple TV+, touting access to exclusive original shows, movies and documentaries. Notably, both Apple and Disney announced that these services would not be supported by advertising.

So what does this mean for advertisers?

This evolution and expansion of SVOD might sound like the worst-case scenario for advertisers looking to run next to premium digital video content, but over time this will likely benefit those advertisers. Consumers will soon be flush with SVOD options with a variety of content at different price points. This sounds great in theory, but when hit with the reality of paying five different streaming services on a monthly basis, consumers may opt to be more conservative in their platforms of choice. The intense competition between streaming services will only drive content and subsequently subscription costs up, further exacerbating the consumer’s choice between platforms. Ultimately, you can anticipate free ad-supported tiers of SVOD services to gain traction from this mess. Consumers will seek out free options to offset the cost of their multiple streaming platforms and content producers will look to advertising as a secondary revenue stream. As this recent dataxu blog post describes, AVOD services have been enjoying massive growth and their outlook is extremely positive going forward with these latest SVOD developments.