- SVOD (Subscription Video On Demand) is the premium binge with no ads.
- AVOD (Advertising-based Video On Demand) is an ad-supported premium binge.
- FAST (Free Ad-Supported Television) is the FREE comeback king and includes ads.
In a world where attention drives revenue, “free” models like FAST and AVOD are experiencing remarkable growth. FAST’s Hours of Viewing surged 95% year-over-year, with ad-supported streaming now dominating the market. By 2025, CTV ad spend (including FAST and AVOD platforms) is projected to surpass linear TV, with FAST alone forecast to reach $42.6 billion—representing 42% of total TV ad spend by 2027. Meanwhile, global AVOD revenue is expected to hit $55 billion in 2025.
Traditional SVOD services, however, face mounting challenges, with a recent LendingTree survey finding that 72% of subscribers think they “pay too much.” This has pushed major players like Netflix and Disney+ to launch ad-supported tiers (AVOD), acknowledging that the pure subscription model (SVOD) struggles to balance rising production costs with subscriber revenue. Growth is increasingly reliant on these hybrid approaches, regional pricing strategies, and the integration of seemingly competitive streaming apps.
What would it cost to subscribe to all of the major streaming services each month?
What is SVOD: Subscription Video On Demand?
SVOD is what most people think of when they hear “streaming.” It’s Netflix. Disney+. Max. You pay a monthly fee to access a library of content—typically with no ads.
The value proposition? Premium, uninterrupted viewing. But here’s the tension: As content costs balloon and subscriber growth plateaus, SVOD platforms are increasingly turning to ad-supported tiers.
The SVOD reality in numbers:
- The average American household is spending an average of $69/mo on streaming services according to Deloitte.
- SVOD content costs have exploded, with Netflix alone spending $16.2 billion on content in 2024.
- Netflix’s ad tier has already reached 42+ million global users, proving even premium services need ad support (see chart below).
What is AVOD: Ad-Supported Video On Demand?
AVOD platforms offer free (or cheaper) content in exchange for watching ads. Think: Hulu with ads, Peacock’s free tier, or YouTube.
The model is hybrid: viewers get choice, advertisers get access, and platforms get diversified revenue. It’s a win-win—until it isn’t. AVOD faces challenges around ad load, targeting accuracy, and user tolerance. But when done right, it delivers both scale and performance.
AVOD by the numbers:
- AVOD platforms average 4-8 minutes of ads per hour vs. 16+ minutes on traditional TV aligns with industry data. 6, 8, 13
- Recent studies show ~65% prefer ad-supported tiers for cost savings. 9, 14
- 65% of consumers prefer paying less for ad-supported content versus premium ad-free options. 9, 14
- Completion rates for AVOD ads average 95%, significantly higher than digital video elsewhere because who sits down to watch their favorite show and turns it off because a commercial comes on? No one. It’s the ultimate multi-opt-in ad experience.
What is FAST: Free Ad-Supported Streaming TV?
FAST is the fastest-growing (and most misunderstood) format. Think Pluto TV, Tubi, or SamsungTV Plus.
It mimics linear TV: scheduled programming, channel surfing, but at zero cost.
Under the hood, though? It’s all digital—and fully ad-supported.
FAST is winning because it combines the familiarity of linear with the scale of streaming—without requiring a login or subscription.
FAST’s explosive growth:
- By late 2024, 46% of U.S. video consumers used FAST services weekly, reflecting their growing role in replacing traditional TV consumption. 7
- FAST ad revenue grew 35% year-over-year, with projections to hit $8 billion in the US, UK, and Canadian markets by 2025. 7
- Tubi’s simulcast of the game set streaming records with 13.6 million average viewers and a 15.5 million peak. 5
- The average FAST viewer watches 1 hour 40 minutes during evening primetime.
What is the difference between SVOD, AVOD, and FAST?
The real difference? The business model.
SVOD: You pay for no ads.
AVOD: You pay less (or nothing) and see fewer, targeted ads.
FAST: You pay nothing, watch linear-style channels, and see more ads.
And that’s where advertisers need to pay attention.
Because in the race to capture streaming dollars, the platforms built on “free” are growing the fastest.
How are SVOD, AVOD, and FAST models changing?
The clean lines between these models are blurring rapidly:
SVOD → AVOD hybrids:
- Netflix, Disney+, and Max all launched cheaper ad tiers, dropping subscription costs by 30-50%
- 42% of new streaming subscribers are choosing ad-supported tiers over premium options
FAST + AVOD mashups:
- Platforms like Tubi and Pluto TV now blend linear channels with on-demand libraries
- This “lean-back” (FAST) and “lean-forward” (AVOD) combination increases session time by 43%
SVOD content appearing on FAST:
- Studio content increasingly flows through all three models in a windowing strategy
- Premium content may debut on SVOD, then move to AVOD, and finally land on FAST
Why Does It Matter in 2025?
The economics of “free” are reshaping the entire streaming media landscape:
- Attention follows accessibility: Tubi, Pluto TV, and The Roku Channel collectively held a 4.3% share of total TV consumption in July 2024, and Tubi alone accounted for 1.8% of TV viewing in November 2024.
- Content economics are unsustainable for pure SVOD: When Netflix spends $16.2 billion annually on content but subscriber growth stalls, something has to give.
- Consumer behavior is shifting: During economic uncertainty, viewers flee to free options. Once they establish these habits, it’s hard to shift even when finances improve because the behavior is established.
- Niche content thrives in free models: FAST channels dedicated to specific interests (like Pluto’s “Totally Turtles” or “90s Throwback”) reduce decision fatigue and increase session time.
What’s Still Broken
Despite the momentum, challenges remain:
- Platform fragmentation splits audiences across 200+ streaming services.
- Measurement inconsistency persists, with 68% of marketers citing it as their biggest streaming challenge. Find out how we’re solving that with Headless Analytics here.
- Supply chain transparency issues mean a significant percentage of streaming ad spend still can’t be tracked to specific publishers meaning transparency is more important than ever.
Want to learn more about Streaming TV advertising and how it works?
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