What Is AVOD? Advertising Video on Demand, Explained

Connected TV

Advertising video on demand (AVOD) has moved from “nice free streaming option” to one of the centerpieces of the modern TV ecosystem. As Connected TV viewership keeps growing, AVOD gives consumers a lower-cost way to watch premium video, and gives advertisers a scalable way to reach audiences on the biggest screen in the house.

In 2026, almost 210 million U.S. consumers use ad-supported streaming services, a 27% increase from 2023. Streaming itself captured a record 47.5% of total U.S. TV viewing in December 2025, and U.S. Connected TV ad spend is expected to reach $37.95 billion in 2026, up 14.5% year over year. Translation: AVOD is no longer a side plot in streaming. It’s the centerpiece.

Below is everything marketers need to know about AVOD, from how it works to where this video-on-demand (VOD) model fits in a performance marketing TV strategy.

What Is AVOD?

Advertising video on demand (AVOD) is a content-streaming model that lets users watch video content at no cost, or at a lower cost, in exchange for viewing streaming ads before, during, or after that content.

The model should feel familiar: like traditional broadcast TV, AVOD monetizes programming through advertising. But unlike old-school linear TV, AVOD brings that ad-supported model into the streaming era, where viewers can often choose what they want to watch, when they want to watch it, and on which device.

For consumers, AVOD solves a real budget problem. For streaming platforms, it creates advertising revenue without relying only on subscription fees. For advertisers, it opens up access to large, engaged audiences across premium streaming environments.

AVOD vs. SVOD

Subscription video on demand (SVOD) requires users to pay a recurring fee to access a content library. For years, SVOD was closely associated with ad-free viewing — think Netflix’s original streaming model. But that line is blurrier in 2026. While SVOD still means “subscription-based,” it no longer always means “ad-free.”

Many major subscription services now operate hybrid models, offering ad-free premium tiers alongside lower-cost ad-supported tiers. Antenna found that nearly half (46%) of subscriptions among SVOD services that offer both ad-free and ad-supported plans are now ad-supported, and 71% of net additions over the previous nine quarters came from ad plans.

Netflix is a clear example of the shift. Its ad-supported plan now reaches more than 250 million global monthly active viewers. Disney has also moved deeper into a unified streaming model, announcing plans to fully integrate Hulu into Disney+ to create a single app experience with entertainment, family programming, news, and sports.

AVOD vs. TVOD

Transactional video on demand (TVOD) allows users to rent or buy individual titles. Instead of paying a monthly fee or watching ads in exchange for access, viewers pay for a specific movie, episode, or event.

Prime Video, for example, still offers a store where viewers can rent or buy movies and TV shows. Apple TV also operates as a destination for browsing movies, shows, and Apple Originals.

TVOD can be useful when viewers want early-release content, premium rentals, or a title that isn’t available on one of their current streaming subscriptions. But because each viewing decision requires a separate transaction, TVOD can be a tougher sell for regular, everyday watching.

Learn more about AVOD vs SVOD vs TVOD

AVOD vs. FAST

AVOD and FAST are often mentioned in the same breath, but they’re not identical.

AVOD generally refers to on-demand content supported by ads. FAST, or free ad-supported streaming TV, refers to free streaming channels that feel more like traditional linear TV — scheduled programming, channel guides, and always-on viewing.

The overlap is big because many platforms offer both. Pluto TV, The Roku Channel, and Tubi all combine on-demand libraries with live or linear-style free channels.

For advertisers, the takeaway is simple: the ad-supported streaming opportunity is bigger than one format. AVOD captures the “I know what I want to watch” viewer. FAST captures the “just put something on” viewer. Both are valuable.

How AVOD Works

AVOD platforms make content available to viewers, then monetize that viewing through over-the-top ads. Those ads may appear before a video starts, during natural breaks in the content, or after the content ends.

The big difference between AVOD and traditional TV is data. AVOD lives in a digital environment, which means advertisers can often use audience targeting, frequency controls, campaign measurement, and real-time optimization that are much closer to paid search and social than traditional linear TV.

Viewers benefit by saving money. Content providers benefit by generating ad revenue. Advertisers benefit by reaching streaming audiences with more precision than old-school TV buying ever allowed. Everybody gets something, which is probably why the model keeps growing.

Key Features of AVOD Services

Here are a few features that AVOD services have in common:

1. Ad-Funded Monetization Model

AVOD platforms monetize content by delivering video ads instead of charging every viewer a full subscription fee. This model helps platforms expand reach, attract cost-conscious viewers, and create a revenue stream that scales with audience engagement.

2. Dynamic Ad Insertion (DAI)

Dynamic ad insertion allows streaming platforms to serve different ads to different viewers within the same piece of content. Instead of every household seeing the same commercial break, ads can be matched to audience segments, geography, behaviors, or other available signals.

That matters because relevance is the whole game. A better-matched ad is more useful to the viewer and more valuable to the advertiser.

3. Granular Audience Targeting

AVOD platforms can use first-party data, device signals, behavioral insights, and other audience information to help advertisers reach specific groups of viewers.

That turns a broad TV buy into something more strategic. Instead of buying against one show and hoping the right audience is watching, advertisers can build campaigns around the audiences most likely to care, and ideally, take action.

4. Flexible Content Windows

AVOD catalogs are dynamic by design. Platforms rotate titles, license new libraries, experiment with originals, and blend on-demand content with FAST-style channels.

That constant movement keeps viewers coming back and gives advertisers more opportunities to appear alongside fresh, familiar, or nostalgia-heavy content.

5. Scalable Inventory Across Devices

AVOD content can run across smart TVs, streaming devices, mobile devices, desktops, and tablets. For performance marketers, the TV screen is especially valuable because it combines a premium viewing environment with digital-style targeting and measurement.

The best AVOD strategies are not device-first. They are audience-first. Reach the right people wherever they stream, then measure what happens next.

Advantages of AVOD

Advertising video on demand offers several major benefits for viewers, platforms, and advertisers. While some of this is a rehash of things we just mentioned, it’s worth the recap.

Wider Audience Reach

Subscription costs can limit who a streaming service reaches. AVOD removes that barrier, opening access to viewers who are cost-conscious, subscription-fatigued, or simply unwilling to add another monthly charge.

That scale is especially useful for advertisers. With more viewers shifting to ad-supported streaming, brands can reach audiences that may be fragmented across multiple platforms, services, and devices.

Cost-Free Access for Viewers

The core consumer benefit is still the clearest one: AVOD helps viewers watch more content for less money.

That value proposition has only become more compelling as streaming prices rise. Deloitte’s 2026 Digital Media Trends research found that 68% of streaming subscribers now pay for ad-supported streaming, reflecting rising price sensitivity and a growing willingness to trade ads for lower monthly costs. VAB’s analysis also found that two-thirds of adults prefer ad-supported streaming services and tiers over ad-free subscriptions.

In other words, viewers do not hate ads as much as they hate paying for every single app separately.

Targeted Advertising Opportunities

AVOD gives advertisers more control than traditional TV. Depending on the platform or partner, brands can target by geography, interests, demographics, purchase behavior, website visitors, CRM lists, and other high-value audience segments.

That precision helps reduce waste. Instead of paying to reach everyone in a broad programming block, advertisers can focus their budget on the households most likely to convert.

For performance marketers, that’s the real unlock: AVOD and CTV advertising can bring the impact of television into the same measurement conversation as paid search and social.

Disadvantages of AVOD

AVOD has plenty of upside, but the model does come with trade-offs.

Ad Fatigue and Viewer Drop-Off

The ad-supported model works best when the ad experience is thoughtfully managed. Too many interruptions, repetitive creative, or poorly matched ads can frustrate viewers and train them to tune out.

Hub Entertainment Research’s 2025 “TV Advertising: Fact vs. Fiction” report found that the ad experience is improving and that viewers are increasingly willing to accept ads, but the same trend raises the stakes for platforms and advertisers: if audiences are giving ads another chance, brands need to make that attention count.

Advertisers can reduce fatigue by refreshing creative, rotating variations, using frequency controls, and aligning ads with the right audience segments. Relevance is still the best anti-annoyance strategy.

Lower Revenue Per User Compared to SVOD

AVOD can reach large audiences, but free or low-cost access often means lower direct revenue per viewer than a premium subscription model. That is one reason hybrid models have become so common.

Platforms can use ad-supported tiers to attract and retain viewers, while still offering premium ad-free tiers for users who are willing to pay more. For streamers, it’s a diversified revenue strategy. For viewers, it’s a choice. For advertisers, it’s more inventory.

Limited Content Library and Exclusivity

AVOD platforms may not always have the newest releases, biggest originals, or most exclusive programming. High-production-value tentpole series and movies often debut on subscription platforms first, or remain behind premium paywalls.

That said, the content gap is narrowing. Free and ad-supported platforms are investing in originals, live programming, creator-led content, and deep licensed libraries. In 2026, AVOD is less “nothing else was on” and more “actually, this catalog is pretty stacked.”

Popular AVOD Platforms

The top advertising video-on-demand platforms include the following.

YouTube

YouTube is the biggest example of how ad-supported video can scale across screens, formats, and viewing habits. The platform includes everything from creator content and podcasts to livestreams, sports clips, music videos, and long-form programming.

It is also now a major living room platform. Nielsen’s Media Distributor Gauge showed YouTube holding the top distributor share in January 2026, at 12.5% of total TV viewing. While YouTube offers paid ad-free options, much of its massive reach still comes from viewers watching ads in exchange for free access.

Tubi

Tubi is Fox’s free, ad-supported streaming service, offering movies, TV shows, creator-led content, and Tubi Originals. The platform has become one of the clearest success stories in AVOD, surpassing 100 million monthly active users and 1 billion hours of viewing time in May 2025.

The Roku Channel

The Roku Channel offers free TV shows, hit movies, Roku Originals, live TV channels, kids’ entertainment, and premium subscription add-ons in one place. Roku says the service includes 500+ live TV channels alongside free on-demand content.

The Roku Channel also continues to gain share on the TV screen. Nielsen reported that it maintained a platform-best 3.0% share of TV for a second consecutive month in January 2026. Because Roku also operates a major TV operating system, The Roku Channel sits in a valuable position: close to both the content and the device experience.

Pluto TV

Pluto TV is Paramount’s free ad-supported streaming service, built around a cable-like experience with hundreds of live channels plus on-demand movies and shows.

The platform leans heavily into easy discovery. Viewers can drop into live channels for news, sports, movies, and fan-favorite shows, or choose on-demand content when they know exactly what they want. Pluto TV’s own site positions the service as “Live TV, Always On,” with hundreds of free channels and thousands of on-demand titles.

Plex

Plex is a free, ad-supported streaming platform that offers on-demand movies and TV shows alongside a large lineup of live TV channels. The service works across smart TVs, mobile devices, gaming consoles, and PCs, giving viewers an easy way to stream without adding another subscription.

Why Advertisers Need Performance TV

AVOD has made streaming feel a lot more familiar to advertisers: viewers get content, brands get ad-supported reach, and everyone skips the cable-era complexity. MNTN helps marketers take that reach further with premium CTV campaigns built around audience precision, efficiency, and measurable performance.

Here’s how MNTN Performance TV helps marketers make AVOD advertising more performance-driven.

• Premium CTV Inventory — MNTN gives brands access to premium streaming inventory across top networks and apps, helping advertisers reach AVOD audiences in high-quality, brand-safe TV environments.
• MNTN Matched — Advanced audience targeting helps marketers focus spend on households more likely to engage, convert, and drive stronger campaign performance.
• Automated Optimization — MNTN continuously adjusts campaign delivery based on performance signals, helping advertisers improve efficiency while campaigns are still live.
• Verified Visits™ — MNTN helps marketers measure site visits and conversions tied to ad exposure, giving teams clearer insight into how AVOD campaigns contribute to business outcomes.
• Reporting Suite — Real-time reporting helps advertisers evaluate performance, monitor audience trends, and connect streaming TV results to broader marketing goals.

Turn AVOD reach into measurable TV advertising performance—sign up today with MNTN’s self-serve software.

Advertising Video on Demand: Final Thoughts 

AVOD has become one of the clearest signals of where television is heading in 2026: more choice for viewers, more monetization options for streamers, and more measurable opportunities for advertisers.

The model gives consumers access to free or lower-cost content in exchange for ads. It gives platforms a way to grow revenue without relying only on subscription fees. And it gives marketers a way to reach streaming audiences with the targeting, optimization, and measurement they expect from a modern performance channel.

The key is not just getting onto AVOD. It’s getting onto AVOD with the right strategy. An audience-first approach, strong creative rotation, premium inventory, and performance-grade measurement can help advertisers turn ad-supported streaming into a growth channel, not just another place to run a commercial.