VOD has gained popularity more than ever with the high demand for OTT services like Netflix, Amazon Prime, Disney Plus, etc. Generally, these VOD platforms use OTT revenue models to monetize video content. However, the challenge here is picking the best monetization model for your VOD business, and it is not that easy.
That’s why, to help you, we’ve covered everything about video streaming business models, including SVOD, AVOD, and TVOD.
Without much delay, let us get into the specifics of AVOD vs. SVOD vs. TVOD
What is SVOD?
SVOD stands for subscription Video-on-Demand service. Users of this SVOD model can access the entire video library for a subscription fee, and based on the service provided in the SVOD model. The cost may vary daily, weekly, monthly, or annually.
What are the Benefits of SVOD?
Some of the benefits of the SVOD business model are as follows;
- Customers can pay a fixed Subscription fee every month and get unrestricted access to view the platform’s video content.
- After paying to watch the online video content, customers can watch unlimited videos on any device with a stable internet connection.
- Generally, subscriptions in the SVOD platform are auto-renewable, and users can cancel them anytime. The option to cancel a subscription anytime gives users an easy opt-in and opt-out.
- SVOD revenue models are ideal for platforms that offer so much entertainment video content, including Pay TV programming, movies, drama series, and other series and want to keep their audience engaged over time by charging a subscription fee.
SVOD Examples: Some SVOD examples include Netflix, Hulu, and HBO.
What is AVOD?
AVOD, commonly known as Advertising Video-on-Demand, is a monetization model where users can view videos with commercial ads without any subscription fee. The key idea behind this AVOD business model is that users should watch ads to view the video content anytime.
Advertisements are effective, and advertisers spend a lot to stream their ads on your on-demand platform. Moreover, with this AVOD Revenue Model, you can change your pricing plans according to the content type you have selected for the ad and your platform’s familiarity. Traditional TV programming is ad-supported in addition to the subscription model.
AVOD: What are its Benefits?
Some of the few benefits of the Ad-Based Revenue Model are as follows:
- AVOD platform lets customers watch content without any upfront cost, especially those who cannot afford subscription services.
- AVOD platforms offer a wide range of content like movies, TV shows, documentaries, and user-generated videos. It attracts a large user base with different interests and preferences.
- AVOD monetization helps you generate revenue for content creators and platforms. Advertisers pay to show their ads to customers, and this revenue supports content creation and distribution, ensuring its availability to reach a wider audience.
AVOD Examples: Some AVOD examples include Hulu, IMDb TV, Pluto TV, and YouTube.
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What is TVOD?
TVOD, also known as Transactional Video-on-Demand, is a VOD platform that allows you to view videos on a pay-per-view basis. The TVOD Business Model is the exact opposite of SVOD, where in the TVOD platform, you will get charged per video or video package rather than having complete access to the entire catalog.
TVOD Model – What are the Benefits?
- Using the TVOD platform, customers can pay for the specific content they wish to watch. They have control over their viewing habits and can access content on demand.
- Unlike traditional pay-TV models or subscription-based services, the TVOD revenue model lets customers pay only for the content they like to watch.
- With the TVOD model, users can get access to watch video content instantly. They don’t need to wait for a specific broadcast time or adhere to a schedule, and this increased convenience leads to higher flexibility in controlling one’s entertainment.
- TVOD services support multiple devices, including smart TVs, PCs, tablets, and smartphones. This accessibility ensures that customers can enjoy their preferred content anytime, anywhere.
TVOD Examples: Some of the TVOD Examples include Google Play and iTunes.
SVOD Vs AVOD Vs TVOD: Which is Most Suitable for OTT Business?
Compared to AVOD and SVOD, TVOD service sets the most transparent expectations for users and providers. If you offer a rental or license, you will know the exact operating and overhead costs for each piece of content, allowing more precise pricing and revenue. Likewise, users get what they need. Even though you provide free video content, there will be no guarantee that a user will use a TVOD platform more than once. TVOD providers should beat competitors’ pricing to encourage customer loyalty.
AVOD, SVOD, and TVOD have upsides and downsides; hence, it is up to you to pick the one that suits your business needs.
How to Choose the Best Video Monetization Model for OTT Business?
Choosing the best video monetization platform from many OTT business models can be challenging. That’s why, here we’ve compiled a few tips to get started:
→ Identify Your Target Audience
Conduct extensive market research to determine your target audience. Knowing your target audience and meeting their changing needs will help you build a large customer base.
→ Assess Your Content
Not every content is created equal, and your revenue model will impact it. If you provide premium content, pay-per-view can be your best bet.
→ Know Your Competitors
When selecting the best VOD monetization model, you need to know about your competitors in the market. Understand your competitors’ strategies and offerings to make a sound decision.
→ Stay Up To Date
Ensure you stay updated with the latest trends in the industry and understand your target audience’s preferences. You can, however, consider options like subscription-based VOD models, advertising-supported VOD models, or a blend of both.
→ High Revenue
Try to understand how other VOD platforms generate revenue. Check whether they earn through subscription fees, advertising partnerships, or a freemium model, and adapt those strategies to meet your unique offering.
→ Secure Content
The best VOD monetization model provides better security for a premium or sensitive content, ensuring only authorized users with access rights can watch the content. So, choose the one that offers secure video content.
The Final Notes
Video monetization is vital for content creators to turn their ideas into lucrative businesses. You can, however, pick from multiple monetization models, such as AVOD, SVOD, and TVOD, to increase revenue.
Each VOD monetization model comes with its positives and negatives. If you want to establish a successful OTT platform, you must carefully analyze the pros and cons of each platform objectively and choose the one that fits your unique needs.