US AVOD user base declines by 10% since end of 2020
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Joseph O'Halloran
| 15 June 2021
At the beginning of the year, many pundits predicted that 2021 would be the year of advertising video-on-demand, yet new research from Omdia has shown that a significant number of users in the US at least are eschewing AVOD and instead increasingly consuming content via paid alternatives.
OMdia AVOD decline 15 JUne 2021
Revealing its findings at the Connected TV Summit 2021, Omdia noted that by April 2021, while pay-TV was largely stable, and subscription VOD (SVOD) continues to grow, US AVOD (18+) penetration had declined to 83% from a high of 93% in November 2020. It added that as the number of users of AVOD declines, the average number of US video services (SVOD and AVOD) taken per VOD user has also fallen for the first time, from 7.23 in November 2020 to 7.06 in April 2021. The average number of US video services (SVOD and AVOD) taken per VOD user has also fallen for the first time, from 7.23 in November 2020 to 7.06 in April 2021.

“After the 2020 explosion of VOD growth, we’re seeing a cooling of the market, partially driven by viewing habits normalising, and industry consolidation, but also from a wealth of new SVOD and studio services,” explained OMDIA senior research director Maria Rua Aguete.

Outside of the US, the other countries surveyed by Omdia showed the number of online services per home continuing to rise, with the UK reaching 5.78 services per user. In the past, many have posited an ultimate limit to the number of services a consumer will be able to manage; with US growth stumbling, many will be asking if 7 is the new ceiling for video streaming video services, both in terms of pay and free options.

The analyst said that the launch of studio AVOD service would draw viewers away from broadcaster VOD (BVOD) services, reducing the overall number of services that a consumer must manage, while maintaining access to the same volume of content. Omdia also said that the first-generation of BVOD services has been one of the “victims” of cord-cutting which has not only driven linear TV network decline but also threatening pay-TV providers’ online viewership. With all major US TV broadcasters making a move into next generation of AVOD there has been a subsequent strategic reallocation of production, marketing and other organisation resources often at the expense of broadcast networks and cable channels, and first-generation BVOD/ TV everywhere services.

As a result, said Omdia, in early 2021in the US there has been an accelerated decline of first-generation BVOD/TVE services. Initially they lost eligible users as a result of cord-cutting and they have now lost viewership to new generation of AVOD platforms that broadcasters are now prioritising.

Omdia also says that it has begun to detect the expected fatigue in streaming services the US. It stressed this did not apply to the SVOD market. Omdia has long anticipated that consumers will become more sophisticated about their self-bundle and composition of the streaming services bundle they consume on a monthly basis will be more “seasonal”, with consumers tracking particular content they want to watch and dipping in and out of services based on that. It observed that dipping in and out of AVOD services is even easier than dipping in and out of SVOD and that it was starting to see this behaviour.