PVOD streaming/Premium Video on Demand platforms explained

Premium Video on Demand (PVOD) has reshaped the world of entertainment, redefining how we consume movies. Gone are the days when movie watchers had to wait patiently for a film’s theatrical release before enjoying it in the comfort of their homes. With PVOD, the silver screen experience is now just a few clicks away, allowing viewers to savor the latest blockbusters from their own couches. This revolutionary concept not only provides instant access to cinematic treasures but also sparks debates about the future of movie theatres and the evolving landscape of film distribution.

Brief Overview of Video on Demand (VOD)

Video On Demand (VOD) is reshaping how consumers access and view content. It provides a convenient platform for audiences to select and watch video content whenever they want, removing the traditional broadcasting schedules’ constraints.

VOD refers to digital systems that allow users to select and view video content on their devices at their convenience. Unlike live broadcast or scheduled television programming, VOD users can pause, rewind, fast forward, and stop the content as they please.

The concept of VOD dates back to the early 1990s. The boom of the internet and advancements in streaming technology in the 21st century have skyrocketed its popularity. Initially, VOD streaming services were offered through cable television providers. Subscribers could pick movies or shows from a limited catalog. The shift began with the rise of broadband internet, enabling services like Netflix and Hulu to emerge.

The global VOD service market was valued nearly $56 billion in 2019. It is projected to reach approximately $120 billion by 2025 with a CAGR growth of around 15%. Factors like increasing internet penetration, advancements in digital infrastructure, and the growing adoption of smart devices play a crucial role in this upswing.

Categories of VOD

1. Transactional VOD (TVOD) – Users pay for each piece of content. Examples include rental services or purchasing a digital copy of a movie.
2. Subscription VOD (SVOD) – Users pay a regular subscription fee to access a library of content. Netflix, Amazon Prime, and Disney+ are classic examples.
3. Ad-supported VOD (AVOD) – Users can watch content for free but are served with advertisements. Platforms like YouTube and Tubi operate on this model.
4. Premium VOD (PVOD) – Typically, newly released content that’s made available for rental at a premium price before it’s available elsewhere.

Understanding the Rise of PVOD on demand

In the past, we waited months for movies to move from theaters to our TVs. Then came the digital age, making everything faster and more accessible. PVOD, or Premium Video On Demand, is a product of this change.

Premium Video On Demand (PVOD) is a video service that lets you watch the newest movies shortly after they’re released in theaters. It’s similar to having early access to the latest films without going to the cinema. For many, PVOD means comfort, as they can enjoy these movies from their living rooms.

“According to an August 2023 survey, most U.S. adults are willing to spend less than $10 on premium video-on-demand (PVOD) content, with just 4% prepared to pay $25 or more for early access to movie releases.” – statista

Now, with PVOD, movies are available to rent or buy at home shortly after theater release. The comfort of home and the allure of latest releases made PVOD popular. The COVID-19 pandemic further boosted its demand, with many choosing or forced to stay indoors. Studios saw this as a chance to maintain revenue without relying only on cinemas.

The growth of high-speed internet and smart devices also played a big part. People could easily stream high-quality videos without glitches.

To sum it up, the convenience of watching new movies at home, combined with technological advancements, has driven the rise of PVOD in the digital age.

What is PVOD Streaming & benefits

Immediate access to the latest movies

Before PVOD, audiences had to wait for weeks, if not months, after a film’s theatrical release to rent or buy it for home viewing. With PVOD, this window has dramatically shrunk. This means that we don’t need to mark calendars or wait for movies to arrive on traditional video-on-demand platforms. Instead, we can simply access some of the latest movies right after their theatrical release or sometimes even concurrently.

Comfort and convenience of home viewing

The age-old appeal of the silver screen is undeniable, but home viewing offers advantages that a cinema can’t provide. Firstly, there’s the sheer comfort of watching a movie in your pajamas, on your couch, under a cozy blanket. There’s no need to find parking, sit next to a stranger, or be confined to a specific showtime. With the evolution of home entertainment systems, most households now have high-definition TVs and sound systems. This, combined with the ability to pause, rewind, or take breaks, grants viewers unparalleled control over their viewing experience.

Potential cost savings compared to going to the cinema

There are other associated costs that can make the outing quite pricey. Transportation, whether it’s fuel for your car or public transit fares, adds to the bill. And then there’s the cinema experience of popcorn, drinks, which can sometimes cost as much as the ticket itself, if not more. For families or groups, these costs multiply. By contrast, renting a movie on PVOD, even if priced at a premium, can offer significant savings. When you factor in the added value of convenience and comfort, the economic benefits of PVOD become even more apparent.

The Technology Behind Premium VoD

The tech behind PVOD is all about streaming. With fast internet connections and advanced servers, movies are sent to your device in real-time. Encryption is a key part of PVOD. This means movies are coded for security to prevent piracy. When you rent or buy a PVOD film, decryption happens, letting you watch the movie without hiccups. This blend of streaming and security ensures studios can release new films early, knowing they’re safe from illegal sharing.

“In July 2022, 24 percent of U.S. millennials reported spending at least $19.99 on a premium video-on-demand (PVOD) transaction to watch a new movie at home, while only five percent of baby boomers did the same.”

Here’s a step-by-step breakdown of how PVOD works, along with the technology behind it:

Content Creation

Studios produce movies or content. This is the phase where directors, producers, actors, and crew come together to create a film.

Digital Conversion and Compression: Once the movie is produced, it’s converted into a digital format suitable for online streaming. Modern video compression technologies, like the H.264 or H.265 codecs, reduce the file size while retaining quality.

Digital Rights Management (DRM)

To prevent unauthorized sharing and copying, PVOD content is encrypted using DRM. Popular DRM solutions include Widevine (by Google), FairPlay (by Apple), and PlayReady (by Microsoft). VdoCipher, a secure video hosting and streaming service provides easy integration of Apple FairPlay DRM and Google Widevine DRM. Videos streamed via VdoCipher cannot be illegally downloaded or pirated. Apart from Multi-DRM video encryption, VdoCipher offers Dynamic watermarking, custom video player, AWS powered hosting, video analytics, secure offline downloads and much more. The pricing is competitive without any hidden charges.

Content Hosting

The encrypted content is then hosted on Content Delivery Networks (CDNs) which are specialized, distributed servers that help in delivering content efficiently to users around the world.

Platform Interface

Platforms like Amazon Prime, Apple iTunes, or dedicated PVOD platforms provide users with a user-friendly interface to browse, rent, or purchase movies. These platforms also facilitate payment processing.

Content Streaming or Download

Once a user decides to rent or purchase a film,

• Streaming – The film is streamed over the internet, requiring a stable internet connection. Adaptive bitrate streaming (ABS) technologies are often employed to dynamically adjust the quality of the video stream in real-time according to the viewer’s network conditions.
• Download – Some platforms may offer an option to download the content. This is useful for offline viewing and can provide consistent high quality regardless of internet speed.

Payment and Licensing

Users pay for the content, often with a set window to watch the film (e.g., 48 hours). The payment also determines the type of access (rent vs. purchase) and sometimes the quality (SD vs. HD vs. 4K). The licensing agreements with studios often determine the pricing and availability windows.

Viewing Restrictions

Due to DRM and platform limitations, there can be restrictions such as:

• Limited time to start watching after renting.
• Limited time to finish watching once started.
• Restrictions on the number of devices or the type of devices where content can be viewed.

Analytics and Feedback Loop

Platforms often collect data on user viewing habits, purchase patterns, and feedback. This data can be used to improve user experience, refine content recommendations, or for studios to adjust their release strategies.

End of Viewing Window

After the viewing period expires (for rentals), the content becomes inaccessible until it’s rented or purchased again. For purchased content, viewers can access it indefinitely, though sometimes there might be restrictions on device transfers or downloads.

Premium Video on Demand (PVOD) vs VOD

Release Windows – Traditional VOD waits for the typical movie release cycle: cinema, then maybe Blu-ray/DVD, and finally, streaming. PVOD disrupts this by offering movies shortly after their cinema debut.

Pricing Structure – PVOD often comes at a premium price. Since you’re accessing a new release, you’re likely to pay more than you would for a regular VOD title. Regular VOD, especially older titles, can be cheaper or even included in subscription packages.

User Experience – PVOD is all about freshness and immediacy. The excitement is similar to watching a new release in a theater but from the comfort of home. Traditional VOD is more like browsing a vast library of content, some old, some new, but not as fresh as PVOD.

Feature/Aspect	PVOD	VOD
Content Availability	Latest releases, shortly after theatrical debut.	Wide range of movies and shows, not necessarily the very latest releases.
Pricing Model	Pay-per-view (specific content pricing).	Often subscription-based, but can also be pay-per-view or ad-supported.
Primary Audience	Those eager to watch the latest movies at a premium price from home.	General audiences are looking for a range of content, not necessarily only new releases.
Release Window	Early access.	General availability after traditional release cycles.
User Experience	Focused on new releases.	Extensive library browsing and older content exploration.

Premium Video on Demand (PVOD) vs SVOD

Content Availability – PVOD primarily focuses on fresh releases, allowing viewers to watch the latest movies shortly after their theatrical debut. On the other hand, Subscription-Based Streaming offers a broad library of content, ranging from old classics to recent hits, but might not have the very latest releases that PVOD offers.

Pricing Models – PVOD operates on a pay-per-view model. You pay for each movie you want to watch. In the SVOD model, charges are a monthly (or sometimes yearly) fee, giving subscribers unlimited access to their content library.

User Engagement and Retention Strategies – PVOD depends on the allure of new content. The promise of watching the latest releases can be a significant draw. The SVOD model engages users by constantly updating their library, offering original content, and using recommendation algorithms to suggest content tailored to individual user preferences.

Feature/Aspect	PVOD	SVOD
Content Availability	Latest releases, shortly after theatrical debut.	Broad library of content, including originals and old classics, updated periodically.
Pricing Model	Pay-per-view (specific content pricing).	Monthly or yearly subscription fee for unlimited content access.
Primary Audience	Those eager to watch the latest movies at a premium price from home.	General audiences who value continuous access to a wide range of content.
Release Window	Early access.	Content added following various release windows, but often not as early as PVOD.
User Experience	Focused on immediate, new releases.	Continuous discovery of varied content, with personalized recommendations.

PVOD movies, the future of the film industry?

In recent years, film studios have moved away from the traditional model of theatrical releases followed by a 90-day wait for digital sales. Now, a new model incorporating a premium video-on-demand (PVOD) tier is more common. Films are available on PVOD for premium rental or purchase prices shortly after their theatrical debut, preceding their availability on regular video-on-demand (VOD) and subscription services like Netflix and Disney+.

Just 19 days following its U.S. cinema release, Universal’s “The Fall Guy” was released on Premium Video on Demand (PVOD) and quickly topped many charts. Directed by David Leitch, the film’s rapid transition to PVOD while still screening in cinemas has reignited debates about the impact of shorter cinematic release windows on the struggling theater industry. There are questions about whether the $125 million action-comedy starring Ryan Gosling and Emily Blunt, projected to gross about $165 million globally, suffered at the box office due to early availability at home, or if the declining theater attendance reflects a deeper disinterest in the cinematic experience, despite what audiences claim.

Additionally, it’s important to note that PVOD, requiring a $20 payment for 48-hour access, differs from free streaming services. Since late 2020, Comcast has consistently released its cinematic titles on PVOD 19-21 days post-theatrical debut, except for a few pre-planned exceptions like Christopher Nolan’s “Oppenheimer” and M. Night Shyamalan’s “Old.” Those films with initial earnings over $50 million received extended 31-day windows. The recent PVOD release of “The Fall Guy” follows this established pattern and was not a reactionary measure to unexpected box office performance.

“The Super Mario Bros. Movie,” 2023’s top-grossing film so far, exemplifies the success of this strategy. Released theatrically in April 2023, it moved to PVOD 41 days later and continued to perform strongly in both arenas.

While other studios have hesitated, preferring longer theatrical runs followed by simultaneous releases on SVOD and VOD, Universal’s strategy has allowed it to capture the largest domestic box-office market share last year. This indicates that PVOD can coexist with traditional revenue streams, enhancing rather than cannibalizing overall earnings.

When factoring in PVOD (premium video-on-demand) revenues, Universal’s total earnings increase to $4.5 billion. Notably, PVOD revenue, which includes contributions from the U.K. where digital release windows are extended, adds around $1 billion to their earnings, accounting for a significant 30% increase in overall revenue.

PVOD has been a strategic boon for Universal, providing a 44% enhancement over its estimated $1.8 billion in theatrical film rentals, with PVOD alone contributing about $800 million. Universal’s assertive PVOD strategy, which includes 53 releases since January 2022, has not only led in box office gains but has also fostered a productive cycle, allowing for the production of more films.

Despite initial resistance from major cinema chains like AMC and Regal, Universal managed to negotiate agreements that have gradually eased the industry’s acceptance of PVOD. This acceptance is bolstered by the observation that PVOD releases can sustain box office revenues, as home marketing efforts often complement theatrical showings. This synergy suggests that the PVOD audience typically does not frequent theaters, providing a complementary rather than competitive revenue stream.

This approach is particularly beneficial for Focus Features, where lower production and marketing costs mean that PVOD revenues are highly impactful. For example, $5 million in PVOD earnings can translate to a net return similar to $8 million in theatrical gross, significantly enhancing the viability of green-lighting these films.

Overall, Universal’s use of PVOD illustrates a strategic shift in film distribution, emphasizing its growing importance in the financial ecosystem of film production and distribution. This shift might not only elevate the status of PVOD in media discussions but also reshape the sequencing of film releases to maximize revenue across multiple platforms.

Challenges faced by Premium Video on Demand Sector

Cinema Owners’ Concerns About Increased Losses

The revenue of Cinema or movie theater owners heavily depend on the number of people visiting. With Premium Video On Demand (PVOD), viewers get the convenience of watching the latest movie releases at home. This poses a concern for theater owners, but why?

• Immediate Availability – If a movie is available at home on its release day, many might skip the theater experience altogether.
• Economic Consideration – Watching at home can be cheaper, especially for families. Instead of buying multiple tickets and spending on concessions, they might just pay once for PVOD.
• Comfort Factor – Home environments can be more comfortable. No need to drive, find parking, or sit in a crowded hall.
• Health and Safety – In a world mindful of health and safety (like post-pandemic scenarios), avoiding crowded places can be a priority for many.

This decline in footfalls impacts theaters’ profit margins and may even lead to closures of some establishments.

Potential Impact on Movie Piracy

Piracy has always been a problem of the media industry . With PVOD in the picture, the dynamics change but not necessarily for the better.

• Easier Access to Content – Once a movie is out on PVOD, pirates can more easily access high-quality versions of the film, leading to faster proliferation of pirated copies.
• Quicker Piracy Turnaround – Instead of waiting for theatrical releases to end or for DVDs to launch, pirates can now get content almost immediately.
• Potential Loss in Revenue – The easier availability of pirated versions might deter individuals from purchasing the PVOD version or visiting theaters.
• Higher Stakes for Filmmakers – With PVOD, filmmakers have a tighter window to recoup investments before pirated versions flood the market.

Impact of PVOD’s on Movie’s Box Office Performance

Recently, the Kerala Film Chamber of Commerce made a decision regarding the duration of OTT and theatrical release. The OTT movies can only be released 42 days after the their theatre release.

The introduction of PVOD has stirred debates on how it impacts a movie’s box office performance.

• Shortened Theatrical Windows – Traditionally, movies would stay in theaters for a set period before moving to home video or streaming. PVOD might shorten or overlap this window, leading to debates on revenue cannibalization.
• Dual Revenue Streams – Some argue that PVOD can act as an additional revenue stream without necessarily harming theater collections. It targets a different audience—those who prefer or need to stay at home.
• Changing Metrics of Success – The yardstick of a movie’s success may shift from just box office collections to a combination of theatrical and PVOD revenues. This shift can change how movies are marketed and perceived.

The rise of PVOD presents both opportunities and challenges for the film industry. Balancing the interests of theaters, content creators, and audiences will be crucial as the industry navigates this new terrain.

FAQs

What is Premium Video On Demand (PVOD)?

PVOD refers to newly released movies made available for rental or purchase on digital platforms prior to their typical home entertainment window.

How is PVOD different from regular VOD or streaming?

PVOD releases come out much sooner after a movie’s theatrical debut, often within weeks, while regular VOD or streaming might wait several months. PVOD titles are also priced higher than standard rentals due to their newness.

Why are studios releasing movies on PVOD?

The rise of streaming platforms, changing viewer habits, and external events like global pandemics have disrupted traditional cinema attendance. Studios are exploring PVOD as a way to recoup losses and meet demand.

Will PVOD replace traditional cinemas?

While PVOD offers flexibility, many believe that the cinematic experience can’t be replaced entirely. It’s more likely that the two will coexist, with some movies getting exclusive theatrical runs and others opting for simultaneous or early PVOD release.

Can I watch a PVOD release on any streaming platform?

It depends on the studio’s distribution strategy. Some movies may be exclusive to a particular platform, while others might be available across multiple services.

Are PVOD releases available worldwide?

Availability can vary. Some titles might be available in certain countries before others, depending on distribution agreements and regional release strategies.