The debut of an ad-based video on-demand (AVoD) business has been announced by aha. The OTT platform believes that AVoD users will be its next great growth potential after attracting over two million paid customers in the first two years of its existence and will also help it become profitable.
To maintain its market domination, aha thinks that AVoD can be a significant new growth potential following lockdowns.
A maximum of three to five million paid customers are allowed in each zone. According to Vasudev Koppineni, senior vice president, of content and non-subscription revenue business, the next significant growth opportunity comes from AVoD users, who are roughly 10 times or more than the paying subscription market. The platform aims to increase non-subscription revenue by 5 times over the previous year. It started offering brand solutions in the middle of the previous fiscal year and the first six months brought in $2 million in non-subscription revenue. “We have already increased our numbers this fiscal year. Over the previous year, we want to increase by 5 times. It is a lofty objective. However, with the launch of AVoD, we can accomplish this, says Nitin Burman, vice president and head of non-subscription revenue.
Along with AVoD, brand solutions, content integrations, and show sponsorships are other non-subscription revenue sources. Another revenue stream for it comes from its roughly 2 million subscriber YouTube channel. For its inventory, it has also cooperated with Google. “We want to launch a few impact assets and elevate our YouTube channel. These will help us achieve our desired 5x growth, he continues.
The growing desire of national advertisers to connect with hyperlocal consumers inspired the idea to enter the AVoD model.
“It also opens gateways for a platform to become profitable. Everybody is putting in huge investments for content, but it is difficult for OTT platforms to be profitable. There are only so many paid subscribers in the market. David will help us to stay relevant. It will also help us to challenge the competitors with deep pockets,” he adds.
Putting it in context with numbers, Burman says the AP-Telangana market has around 8-10 million SVOD subscribers. Of this only 3-4 million are paying subscribers, that is the ones who make the payment for the subscription. The rests are their friends and family who share the subscription. “Of this 3-4 million, we have already acquired more than 2 million. The next set of customers are the ones who want to pay less and are okay to watch content with ads Additionally, it creates opportunities for a platform to make money. Everyone is making significant expenditures on content, yet it is challenging for OTT platforms to turn a profit. In the market, there are a limited number of paid subscribers. We can continue to be relevant by using AVoD. Additionally, it will enable us to compete with the well-funded rivals.
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