TV2PLAY launches AVOD subscription option
The business model in which Online Video users pay a monthly fee to be able to watch ad-free content is conquering the world, with Netflix leading the way.
However, a range of services have attempted to offer VOD services, in which users pay less - or pay nothing - and in return the content is wrapped in commercial messages, much like linear TV channels used to be.
The model of YouTube if you will.
Hulu have since 2007 offered a free streaming plan, but it was never successful and was recently re-loacted to a Yahoo context. Instead Hulu have introduced 2 options for consumers, an ad-free subscription of $11.99/mo and an ad-based subscription at a discounted price of $7.99/mo. "If you dont like adds, pay 50% extra to get rid of them..". Reportedly, the AVOD service has 12 mill. subscribers.
TV2 Denmark is offering the SVOD service TV2PLAY in Denmark, reportedly with 0.3 mill. subscribers (in a 5 mill. population). Currently the ad-free subscription is priced at $18/mo.
The new AVOD version of TV2PLAY will be priced at $14/mo. As no details of the level of ad-load have been released, it remains to be seen, if and to what extent users will embrace adds (TiVO recently released research suggesting a tolerance of 3 ads pr. 30 minutes of content was max., but this was in a U.S context where traditional TV is heavily infused with ads, so tolerance in Denmark might be different, as TV2 is surely surveying).
The real interest here is of course the chance for TV2 to work with programmatic advertising in a larger context, also building up experience of how this new form of targeted advertising will sell with advertisers. And of course, if consumers will react more positively to targeted - maybe even relevant - adds. Perhaps even coming to love them, who know.
But AVOD services have so far only worked with short-form content, as YouTubes limited succes of the YouTube Red concept shows. Converting from AVOD to SVOD is hard, but maybe TV2 will be more successful in growing from SVOD to AVOD, or rather introducing a mix.
Link [article in Danish]: http://mediawatch.dk/Medienyt/TV/article9175965.ece
Intresting. But I think the 'discount' should be greater in order for the AVOD to truly take off. But let's see the SVOD services from Swedish Broadcaster seems to have flatten out, so this might be a new path for them. Stay tuned!