Prime Video AVOD To Grow 133% Due To Rising CTV Ad Volume

The entry early this year of Amazon Prime Video with its advertising video on demand (AVOD) option continues to accelerate revenues for the platform -- as well as playing a key role in boosting premium direct to consumer (D2C) ad platforms overall.

Looking broadly at all AVOD business -- major brand streamers and smaller platforms -- MoffettNathanson Research sees a rise in revenues of 33% in 2024.

Analyzing a core group of 10 premium major streamer operations, it projects ad revenues rising 36% ($3.65 billion) to $13.8 billion, according to MoffettNathanson Research. 

Amazon Prime Video AVOD platform by itself will grow 133% ($1.13 billion) to $2.0 billion from the year before -- chiefly due to it unleashing massive connected TV (CTV) advertising inventory into the marketplace which started up the first quarter of this year. 

MoffettNathanson estimates in the first quarter of this year alone Amazon contributed 24% to the overall business growth, with estimates that Prime Video had a 10% share of all premium CTV ad business. Projections are Prime Video share will grow to 22% in the fourth quarter of this year.



Writes Michael Nathanson, media analyst/co-founder, about the overall market:  “The introduction of ads to Amazon Prime Video – where the ad-tier is now the default option – has led to an explosion in CTV ad inventory, exerting deflationary pressure on CPM across the sector.”

Against high CPM prices set by Netflix (a $48 CPM); Disney+ ($46); Peacock ($40); and Hulu ($25) in the fourth quarter 2023/first quarter 2024, estimates from Bernstein Research believe Amazon’s CPMs are now closer to $20 -- it had been in the mid-$30 range. All this is driving massive CTV ad volume, especially from existing intended linear TV media campaigns.

But Amazon isn’t alone in its acceleration. MoffettNathanson sees Netflix rising 120% this year to $1.6 billion; and Disney+ being up 242% from $475 million; and Paramount+ rising 52% to $1.1 billion.

Nathanson believes the market will also continue to see gains from new free, ad-supported streaming platforms:

“The entrance of Amazon Prime Video into the ad-supported streaming game plus the continued rapid growth of ad-supported tiers across streaming and free AVOD platforms such as Tubi and Roku Channel should propel this advertising shift forward.”

For 2024, it also sees AVOD leader, Hulu, virtually flat at $3.04 billion versus 2023; Peacock, 25% higher (to $1.8 billion); Roku Channel, growing 15% ($1.2 billion); Pluto TV up 10% ($1.03 billion); Tubi adding 13% ($932 million); and Warner Bros. D2C business, 48% higher ($754 million).

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