News Analysis: AVOD Just Got Real

The biggest news during last week’s CES occurred hundreds of miles away in Los Angeles.

Amazon’s IMDb.com movie industry website confirmed previous rumors and nixed executive denials with the launch of a branded ad-supported video streaming platform.

IMDb Freedive enables customers to watch TV shows, including “Fringe,” “Heroes,” “The Bachelor” and “Without a Trace,” as well as movies, such as Awakenings, Foxcatcher, Memento, Monster, Run Lola Run, The Illusionist, The Last Samurai and True Romance, without purchasing a subscription, according to Media Play News’ Stephanie Prange.

The launch is significant. Heretofore, AVOD was a distant stepchild to SVOD — the latter spearheaded by Netflix, Amazon Prime Video and Hulu. With a media landscape littered with SVOD and subscription-based online TV, ad-supported platforms offer an economical (i.e. free) alternative.

To be sure, Sony Crackle and Shout! TV have offered ad-supported content without subscription largely to niche audiences for some time. The Roku Channel upped the format by tapping into a user base of more than 27 million Roku subscribers — users who registered to the platform for access to third-party platforms such as Netflix.

The channel, which features catalog TV shows and movies, is now among Roku’s Top 5 accessed platforms. Roku recently licensed the platform to Samsung’s Internet-connected TVs.

“Strong active account growth and accelerating streaming hours point to consumers’ growing enthusiasm for [free] streaming,” said Roku CEO Anthony Wood.

Freedive takes AVOD to another level.

Long before there was Google, IMDb.com was the go-to source for actors, TV shows, movies and behind-the-scenes information. Through October, the platform had about 5.3 million titles (including episodes) and 9.3 million personalities in its database, as well as 83 million registered users. Subscription-based IMDb Pro is considered a must-have database for the business-side of Hollywood.

“Once you’ve signed up for Netflix and Amazon and Hulu, you’re more than $30 deep,” Colin Petrie-Norris, CEO of Xumo, an-ad-supported live TV/on-demand platform, told Digiday.com. “Price-sensitive consumers are seeing [free video streaming services] as viable alternatives or complements to paid services — that’s probably the biggest factor.”

Los Angeles-based Pluto TV launched in 2013 featuring about 100 channels via an ad-supported app that operates on 14 platforms, including Apple TV, Android TV, Amazon Fire TV, Chromecast, Roku and PlayStation consoles.

Last August, Irvine, Calif.-based Vizio rolled out WatchFree, a proprietary ad-supported streaming video platform that partnered with Pluto TV featuring action movies, black cinema, news channels, NBC News, MSNBC, Fox Sports and related fare.

NBC Universal plans to roll out an ad-supported streaming video service in 2020. The media company Jan. 14 re-organized its management structure to accommodate the future streaming service.

Bonnie Hammer, who was named chairman of direct-to-consumer and digital enterprises, will also oversee NBCU stakes in digital media outlets, including Vox, Snap and BuzzFeed.

The ad-supported service will be available at no cost to NBC Universal’s pay-TV subscribers in the U.S. and major international markets. Comcast Cable and Sky will provide the service to their 52 million subscribers. An ad-free version will also be available for a fee.

Additionally, non-pay TV customers can purchase a subscription to the service. Consistent with the company’s long-standing strategy to distribute its content broadly, NBC Universal will continue to license content to other studios and platforms, while retaining rights to certain titles for its new service.

“Our new service will be different than those presently in the market and it will be built on the company’s strengths, with NBC Universal’s great content and the technology expertise, broad scale and the wide distribution of Comcast Cable and Sky,” said Steve Burke, CEO, NBC Universal.

Michael Pachter, analyst with Wedbush Securities in Los Angeles, doubts AVOD will threaten Netflix & Co. anytime soon. He considers the formats largely supplemental to SVOD.

“I’m sure that there are people who can’t afford Netflix who will watch, and there are a handful of subscribers who will defect from Netflix, but most subscribers appreciate the unique content available only on Netflix and will remain subscribers so long as there is fresh original content,” he said.

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