Computing Giant, Amazon is planning to expand its video offering by launching a standalone ad-supported VOD service early next year. Given this divergence from the traditional fee based revenue model (Netflix, HBO GO, Hulu etc.), Amazon would be making two substantial assumptions: 1) ad dollars will continue to shift to digital; and 2) consumers will be accepting of advertisements in longer-form ?TV-style? content online.
How Ad Supported Model Helps Dramas / Comedy, etc ?
Digital pure-play publishers are seeing some encouraging trends for ad-supported models. Over the last year, the ?TV-Style? content categories of Scripted Drama, Comedy/Variety, and Documentary/Reality have grown ad view share by approximately 900bps to 28%. Stats suggests that consumers are not likely to view advertisements as a deterrent to ?TV-Style? content, which is encouraging for the ad-supported VOD model. Advertisers would also likely be supportive of this model considering that ad completion rates tend to be the highest for content that is greater than 20 minutes
