AVOD (ad-supported VOD) is the model in which content is free to watch and revenue comes from advertising inserted into the stream. The viewer pays with attention instead of money, so the business scales with audience size and ad load rather than subscriptions. This changes the unit economics completely: more viewing means more ad inventory and more revenue, but also more delivery cost, so margin depends on filling ad breaks at a good CPM.
AVOD makes the ad stack a first-class part of the platform. It needs ad-break signaling (SCTE-35), an ad decisioning/serving layer speaking VAST and VMAP, and an insertion method — usually server-side ad insertion (SSAI) so ads survive ad-blockers and play seamlessly on TVs. Measurement, frequency capping, and ad QoE become engineering concerns, not just marketing ones.
AVOD overlaps with FAST (which is scheduled, channel-style) but AVOD proper is on-demand: the viewer chooses the title and the system decides where ads go.
