Video consumption is changing. Internet accessing is widely available now. Anyone who is following the rapid change in the Video entertainment and TV industry, where the Internet based streaming services is increasing and it is fundamentally changing the way Video is consumed, distributed, sold and produced. SVOD, TVOD, and AVOD are the terms that are used to describe business models that are applied on online services. All these terms include VOD which stands for Video on demand. VOD services allow the customers to select where, what and when to watch. Companies like Netflix, YouTube are examples of this. VOD is quite applicable as almost all OTT services contain little or no live streaming. This might change with time of course.
SVOD stands for subscription video on demand. In this service, you enter into a subscription agreement. Then it will grant to access the service till you drop which means you can watch with no limits. This is a common revenue model that several online video streaming businesses use. The examples are Hulu Plus or Netflix. It is similar to traditional TV packages. It allows the users to consume content as much as they want at a flat rate per month.
The users can opt out anytime; they are not tied into a long term contract. They can play and pause, rewind, fast forward, stop and record the programming whenever they want. As a result, it offers flexibility to the users. It can be of any duration, quarterly, yearly, half yearly and monthly. These are auto renewable so the users can cancel them whenever they want. It can be renewed at the same fee and the users can keep on accessing the content till the next subscription cycles. It comes with a flat fee and the platforms cannot decide a different price for different content.
SVOD can be clubbed easily with Ad models or pay per view and can be monetized. These are good for platforms which have huge entertainment video content like Drama series, Movies, PayTV programming and much more to engage the users on a long term ties to a subscription fee. This type of monetization model provides a recurring revenue stream. The focus should not be only on subscriber acquisition, but also retention. The Businesses that choose to pursue SVOD model need to update its content regularly at particular intervals in order to justify continued subscription from the audiences to retain its subscribers.
TVOD refers to transactional video on demand. It is just opposite to SVOD. It will not charge anything to sign up to create a user profile. You will just have to pay an amount only for the content you watch. Often it relates to movies and also for sports, series, and events. There are 2 sub categories known as Download to Own or Electronic Sell. In this, the users have a permanent access to the content that is purchased and download to rent where the customers can access the content upon renting for a limited time. Whereas, DTR or Download to Rent is renting the same content for certain period of time, probably for the lesser cost than sell.
TVOD offers recent releases that are beneficial to rights holders for higher revenues so that the users can get timely access to the new content. This is because they can build better the business backward towards the right owners as higher revenue per view is obtained. Pay per view works with live programming and special events. The customers purchase a programming to view and broadcaster streams the same event for those who have purchased it at the set time. PPV is the best revenue model for streaming live sports and sporting events. These services retain the users by offering amazing price incentives and special discounts so that they come back again.
TVOD is relabeling online, for example, Amazon and Apple and it also exists on traditional mediums like Sky. Whether you are an entertainment company with large and multi genre library of televisions series and movies or sports live streamer, TVOD demands a marketing investment to scale. For an IP owner to depend only on TVOD to make money, they should:
- Have an effortless and installed marketing effort
- Accumulate huge audience or build a highly focused affinity audience
It needs active marketing campaigns which will keep your audience happy and will acquire new customers and continue to grow your business.
AVOD which is known as advertising or ad based video on demand is another form of monetizing on streaming video. It is free to the consumers. In this, the users have to pay with eyeballs instead of credit card for example YouTube, where ad revenue is used to hosting costs and offset production. The ads are very powerful and the advertisers have to pay a huge amount for streaming ads on the on-demand platform. Depending on the type of content, you can choose the pricing for the ad and platform’s popularity.
However, traditional TV programming is ad supported and clubbed with a subscription model. It is not video on demand. AVOD is employed by traditional channels and these will move into online catch-up. So probably you will see these in the future. The premium content owners use AVOD rarely as it generates a lower amount of revenue compared to TVOD and SVOD. There are services that operate with several business models like for example, Amazon Video. Per month the audience has to pay a fixed subscription for accessing the library of films and extra fees will be charged for the new releases. In the OTT market, AVOD services are the least explored business model looking at premium content. These are three things IP owners should do to depend on AVOD to make money:
- Have installed and aggressive marketing team
- Update content frequently
- Amass huge audiences