But let’s be real, choosing the best video monetization platform in this diverse universe can become challenging sometimes. That’s where we hop in, to help you understand everything there is to know about these platforms and how you can effectively use them.

The rise of video monetization platforms has opened a lot of doors for broadcasters and content creators. Number of digital video viewers worldwide has risen from 2.78 billion in 2019 to 3.48 billion in 2023. There has never been a better time to join and be part of this revolution.

In this blog, we will explore the topic of video monetization platforms in detail. It does not matter if you are new to the game or have some prior knowledge, we have got you covered. We will explore different monetization models like AVOD, SVOD, and TVOD. We will also talk about the latest and best monetization platforms in 2023 for every model which will help you make an informed decision and take your video monetization strategy to the next level.

It is about time you turn your views into revenue and leave your mark in the ever-expanding world of video content. Let’s get started, first thing first,

What Is a Video Monetization Platform?

Video Monetization Platform is a web application that allows content creators, online educators, broadcasters, and media companies to host their video content online and generate revenue from it. These platforms generally offer different ways to monetize the content like through advertisements which is AVOD, subscriptions which is SVOD, transactional which is TVOD (also known as pay-per-view model), or direct sales of merchandise related to video content.

Before we get into the best video monetization platforms for your business. It is important to understand all the monetization models in detail. These model can be divided into 5 major categories as follow,

1. Advertising-based Video on Demand (AVOD)
2. Subscription-based Video on Demand (SVOD)
3. Transactional-based Video on Demand (TVOD), also known as Pay-Per-View Model
4. Premium Video on Demand (PVOD)
5. Membership and Patreon Model

Now the next question is how to choose the right monetization platform for you. This largely depends on the type of content, your audience size, revenue goals, and more. We will discuss this in detail later.

First, let’s talk about all the monetization models in detail,

What Is the AVOD (Advertising-based Video on Demand) Monetization Model?

AVOD or Advertising-based Video on Demand model is the most common of all. It has a straightforward proposition, that is users can access unlimited content as long as they sit and watch advertisements in between. This model is quite a game changer in the video content industry. 

AVOD is a simple yet effective model that helps the platform offer an extensive range of content without the barrier of subscription fees. The most popular example is YouTube where in the free plan you see skippable and sometimes non-skippable ads in between. YouTube shares its revenue from advertisements with the content creators, which motivates them to keep creating and posting content. Other popular AVOD models include video monetization platforms like Hulu, Tubi, and Rumble.

Also note that AVOD is just limited to large platforms. It is also popular among small user-generated video platforms as well. On top of that, AVOD platforms have a competitive edge over other models in reaching a wider audience, users who are reluctant to pay for subscription services. It is a viable alternative to the subscription-based model that we will discuss next.

What Is the SVOD (Subscription-based Video on Demand) Monetization Model?

Unlike AVOD, where the revenue comes from advertisements. SVOD relies completely on users paying a monthly or yearly subscription fee to watch video content. It has a buffet-like approach where you pay one time for exploring and consuming content.

Popular video monetization platforms that utilize this model are Netflix, Hulu, Disney+ (formerly Hotstar), Amazon Prime, and e-learning platforms like Toppr, Vedantu, and many more. With the SVOD model, users can consume a diverse range of shows, lectures, movies, and more without the interruption of ads. This model is more successful with online education videos as no one wants to see ads while learning, as it causes a distraction.

While the above-discussed platforms have thousands of hours of content, it is assumed that an average user will only consume a fraction of this time. If every user gets on consuming maximum bandwidth (data usage while streaming) by watching an extraordinary amount of videos, it could lead to operational losses.

What Is the TVOD (Transactional-based Video on Demand) Model?

TVOD is like the new kid in the block that is becoming increasingly popular in the streaming-based era. As the name suggests, you do a transaction to rent or buy specific content you desire. This model is also known as the Pay-Per-View model, which means pay for what you watch. This model offers something different and is for people who don’t want to be tied up to a subscription to watch video content.

So what’s the big deal with this model? Imagine you are in a shopping mall and you see the price tag for different clothes. You like something, pay for it, and bam – it is yours! With the subscription model, you often end up paying for a bunch of stuff you will never watch. For the creators, this is a pretty sweet deal too, as they are getting more aware of what’s hot and what’s not, which helps them manage costs and risks. So there is no shooting in the dark!

And then there is another disadvantage with subscriptions: you often get overwhelmed with the content, just like in Buffet. So TVOD model is perfect for decisive viewers who know what they want but if you’re someone who likes to browse and try before watching, you might find this model limiting.

Some popular examples of TVOD video monetization platforms are Amazon Prime, YouTube, Apple iTunes, Google Play Movies and TV, Vudu, Bookmyshow, and more.

What Is the PVOD (Premium Video on Demand) Monetization Model?

Premium-based Video on Demand is the newest of all. This is sort of a variation of a TVOD, the catch is you can access the content way before the release, hence the name premium. Imagine you’re a big Marvel fan, and a new movie is about to be released. With PVOD you can watch the movie at the same moment, before the release with a few extra bucks. That’s PVOD for you. You get premium access at a premium cost.

This model is a game-changer for streaming services. Why? Because now they are not just sitting idle and waiting for subscribers anymore. They are actively working on getting early bird specials. Luring customers with the new and shiny content and keeping them around with the rest of the content. 

PVOD gives users the feeling of that extra without them having to wait too long to watch premium video content. Movies like “Free Guy”, “Boss Baby 2”, and “The Flash” are examples of films that used the PVOD model.

What Is the Membership and Patreon Monetization Model?

The Membership model represents an innovative approach to content monetization particularly in the world of digital media and online video creation. It is sort of an evolution of the SVOD model, where you pay to watch some exclusive content behind a paywall for some fee. However, unlike subscribers, patrons feel a part of something special, a sense of community and belonging.

Patreon platform was launched in 2013 and is a membership platform where creators get to monetize their content using fans aka patrons’ support.  A diverse range of content creators such as musicians, podcasters, artists, and video creators receive the fee directly from their supporters who then become patrons. 

Both the membership and patreon models have some similarities in terms of providing exclusive content to premium members. The difference is in the approach and focus, like the membership model is more about creating a community and belonging while the patreon model is about direct support and engagement between creators and fans.

What is a Hybrid Video on Demand Monetization Model?

Apart from these, hybrid VOD models are also popular now which use a combination of two or three of these models. For example, YouTube (AVOD & SVOD) and Amazon Prime (TVOD & SVOD). Hybrid models can be further classified into – 

1. Freemium with Premium Content – that offers free content along with premium content on extra purchases. Example, YouTube, Peacock.

2. Transactional and Subscription Combo – this is just like gym membership, where you pay extra for personal trainers and all other services are free. Example, Amazon Prime Video, and Apple TV+.

3. Ad-based alongside Subscription – the one that shows ads in between but if you want to have an uninterrupted watch session, you can opt for subscription. Example, YouTube, CBS (now Paramount+), and Hulu.

4. Limited-time free access – the one where they offer a movie or show for free for a limited time or for limited content (like just the first episode) and once you get hooked, you got to pay to watch more. Example, HBO Max and Disney+.

This was all about VOD models. Our next segment is how to choose the right video monetization model for your video monetization platform.

How to Choose a Video Monetization Model?

Now it’s time to slice and dice these models to match different industries. We talked earlier about how to go around choosing the top video monetization model for you. This largely depends on,

Target Audience Preferences

What does your audience like? What kind of content are they into? How do they like to consume the content? Are they comfortable with paying or prefer free access with ads?

Nature of Content and Quality

Is your content exclusive or for a global audience? Does your content get released regularly or is more seasonal? Like regular content works well with SVOD while sporadic content can be TVOD.

Revenue Goals

Are you looking for upfront revenue (TVOD) or aiming for steady recurring pay (SVOD)? Do you want to maximize profits quickly or slowly build a community before you sell?

Market Competition

What monetization models your competitor uses? Do you want to use the same or stand out with a different approach? Like if your target market is already saturated with subscription services, you can offer a freemium or ad-based model.

Technology and Infrastructure

Can you manage high-quality streaming (idle for SVODs)? Lower quality streams benefit from ad-based. Does your platform have the capability to offer a seamless experience for subscription or transactional models?

Brand Identity and Value Proposition

Your VOD model should align with your brand identity and value prop. For example, if exclusivity is part of your brand, a premium model makes more sense.

Scalability and Flexibility

Since the digital landscape changes very quickly, your model should be able to adapt and scale as and when needed.

Always remember with VODs there is no size fits all approach. Just like cooking, where you adjust the quantity and ingredients based on arriving guests. The same goes with the VOD models. It has to be tailored to your audience, nature of content, and business or revenue goals.

Which Video Monetization Model Best Suits Your Industry?

Now let’s come back to slicing and dicing these VOD monetization models to match different industries that we talked about earlier.

Music Industry

Freemium with Premium content, is one of the hybrid VOD models that we discussed earlier. For example, YouTube Music and Spotify. You can browse through a wide range of music libraries for free with ads in between and if you prefer no-ads interruptions or other advanced features like creating a playlist or offline listening, you can buy a premium subscription.

One can also opt for TVOD monetisation in this case like iTunes and Bandcamp. Here music artists can directly sell their content to their fans. Great for musicians who have a loyal fan base.

Movie Industry

The SVOD monetization model is the most popular choice in the movie industry. Platforms like Disney and Netflix use this model to attract movie buffs by offering them a large library of movies for a monthly subscription fee.

In this case too, one can opt for the TVOD model, ideal for the latest releases or special screenings. Platforms like Amazon Prime, Google Play Movies, and YouTube let users rent or buy movies at a one-time fee.

TV Shows and Series

Besides the SVOD model, same as we discussed for the movie industry. Hybrid Ad-based with a Subscription-based VOD model also works great here. Popular platform Hulu uses this model where they offer ad-based subscriptions for a cheaper fee for casual viewers and premium ad-free access for binge watchers.

Educational or Elearning Industry

Platforms like Coursera, MasterClass, and Reforge use a subscription-based monetization model because it works well in this industry, providing a wealth of educational content for a recurring fee, ideal for continuous learners.

Freemium with Premium Hybrid models also does well in this industry. Think of platforms like Duolingo and Khan Academy, which offer free educational content with an option to upgrade for more features and no ads experience.

Niche Content (like Fitness or Cooking)

The membership subscription model works in niche content. Platforms like Freeletics, and Centr in Fitness offer membership programs with monthly or yearly subscription fees.

If you want to attract a wider audience, you can also go with the ad-supported content program without a paywall. Just like on YouTube, a lot of fitness and cooking content creators rely on ad revenue while offering free access to their content.

Every industry has its unique nature and needs, so carefully picking the right VOD monetization model is the key here.

That’s all about it video monetization models. By now you must have a clear understanding of VOD streaming and monetization models around it. A VOD platform hosts video content online and shares it with the help of CNDs (Content Delivery networks). Another important aspect of VOD streaming is securing web hosting. A lot of platforms offer a seamless playback experience backed by DRM encryption.

DRM techniques help secure the content by making it difficult for hackers to hack into your platform and sell your content elsewhere at cheaper prices. If your content is not protected, it can lose its value and ultimately the revenue. You must have noticed if you try to take a screenshot or capture a video on Netflix with any recording tool, it doesn’t allow you. That is because it is backed by DRM. 

Enter VdoCipher!

VdoCipher is the most popular secure web hosting solution used by many B2B e-learning businesses to secure their online content. It uses a multi DRM solution which allows creators to secure their content across multiple devices and operating systems. An added bonus is you also get advanced user-based analytics which can further help you optimize your content strategy based on watch time and at the same time look out for suspicious activities.

In conclusion, the landscape of video-on-demand monetization is vast and varies from industry to industry, including type of content, revenue goals, and business vision. Whether you are a musician, online educator, filmmaker, or simply a content creator in a specific niche, there is a tailored video monetization model fit for you. The key is to understand your needs and then make a decision. Simply by making informed decisions and leveraging proper monetization strategy, you can maximize your revenue and can also improve your audience’s watching experience. It’s about time you take your video content seriously and convert those views into a stable revenue stream. Good luck!

A Quick Recap And FAQs Around Video Monetization Platforms

1. What is a Video Monetization Platform?

A Video Monetization Platform is a web application that allows content creators, educators, broadcasters, and media companies to host video content online and generate revenue from it through various monetization models such as advertising, subscriptions, transactions, or merchandise sales.

2. What are the Different Monetization Models for Video Content?

There are five major video monetization models,

• Advertising-based Video on Demand (AVOD)
• Subscription-based Video on Demand (SVOD)
• Transactional-based Video on Demand (TVOD), also known as Pay-Per-View
• Premium Video on Demand (PVOD)
• Membership and Patreon Model

3. How Do I Choose the Best Video Monetization Platform for My Content?

The choice of the right model depends on factors like your target audience preferences, the nature and quality of your content, revenue goals, market competition, technology and infrastructure, brand identity, and scalability. You should tailor the model to align with your specific needs.

4. Which Video Monetization Model Suits Different Industries?

Different industries have different preferences,

• Music Industry: Freemium with Premium content and TVOD
• Movie Industry: SVOD and TVOD
• TV Shows and Series: SVOD and Ad-based with Subscription-based VOD
• Educational or E-learning Industry: SVOD and Freemium with Premium
• Niche Content (e.g., Fitness or Cooking): Membership subscription and Ad-supported content

Akash Kandari

Hi, I am Akash, an engineer turned marketer. I talk about SaaS products, video tech, and product marketing. When not working I enjoy my time watching anime, learning something new and hanging out with friends & family.

The post A Comprehensive Guide to Video Monetization Platforms and Models for Digital Revenue appeared first on VdoCipher Blog.

What is TVOD (Transactional Video on Demand) ?

As the name suggests for TVOD, the user makes a payment for a particular choice of video or a small combination of videos. This can be in form of making payments for a movie or Series combination. Sometimes paying for a movie to watch in one go is usually known as “pay-per-view“. A famous example of a VOD platform with TVOD as the major model is Youtube paid videos. There is a cost for each movie. After looking into definitions, pros, and cons of these aspects, we also present some key stats and estimates on SVOD & TVOD implemented with Netflix, Youtube, Hotstar, and some of the VdoCipher customers. (Infographics are below)

Most customers are familiar with TVOD as pay-per-view when they buy access to a piece of content. Examples include movies, television programs, and sports events. TVOD transactions can occur as either a short-term rental or a long-term license. However, in most cases, the consumer does not own the content they purchase. It simply does not expire unless the consumer violates the terms and conditions of the service.

Vudu, Google Play, iTunes, and Redbox are examples of TVOD service suppliers.

What is SVOD (Subscription Video on Demand) ?

Prominent famous VOD sites like Netflix, Hulu, Hotstar, Amazon Prime , Byjus etc have Thousands of hours of content.  They provide such unlimited stuff in an affordable price per month or year. This idea of providing an offering of bundled video content in one to all pricing is SVOD. The basic practical assumption for SVOD is that the user will only watch a certain amount of content (say 20 to 100 hours per month).  If the user is able to somehow watch all the content offered to him, the bandwidth costs for the business will lead to overall losses.

Now we enlist all the advantages and flaws in the two models. Thus, the reader can make an informed choice amongst the two. We also then look at some numbers using famous and medium sized companies operating on these two models. It will help you better understand and implement the economies for your business. Before that lets look at a stats full infographic on SVOD with Netflix.

SVOD employs a subscription-based model of monetization in which the customer is paid a fixed monthly or annual cost. SVOD often binds the user to a short-term contract or none like standard cable packages. It allows them the freedom to cancel whenever they like.

Netflix, Disney+, Hulu, Apple TV+, and HBO Max are a few instances of SVOD service providers.

SVOD for Netflix: Key Stats, User Engagement, Monetization

What is AVOD?

Video on demand allows users to select and watch videos as per their choice on any screen. In simple language, AVOD or advertising video on demand is the monetization of video services where users can watch videos intermixed with commercial advertisements without buying subscriptions. The primary concept of this model is that the users must watch ads to view the content. Although there are many more, Hulu and  YouTube are the most well-known AVOD platforms.

AVOD is prevalent on television channel applications and user-generated video platforms. This sort of VOD service provides viewers with free content interrupted by commercials. Using the AVOD business model, the firm relies on this income stream to maintain the platform and fund new content.

YouTube, Facebook Watch, Peacock, IMDb TV, and Pluto TV are a few examples of AVOD providers.

How is SVOD, TVOD and AVOD are Different from other Models(SVOD vs. AVOD vs. TVOD)

Technological improvements cause content distribution systems to change so businesses may use various content monetization tactics. Before launching a product, it is essential to explore all choices. This is because some existing VOD providers have a more extensive, more committed user base than others.

SVOD vs TVOD vs AVOD

Technological improvements cause content distribution systems to change so businesses may use various monetization tactics. Before launching a product, it is essential to explore all choices. This is because some existing VOD providers have a more extensive, more committed user base than others.

Before comparing SVOD, AVOD, and TVOD, let’s define each word separately.

As conventional methods of seeing and engaging with content alter, media businesses must be innovative in their platform monetization strategies. How do they decide between SVOD vs AVOD vs TVOD? Generally, it relies on the platform and the content collection accessible to clients. Here are some instances of when to employ each sort of VOD service monetization approach.

SVOD is an appealing alternative for media firms since it provides a consistent cash stream. Media firms like recurring income, and SVOD was a popular model for cord-cutters in the early days. However, compared to AVOD vs TVOD vs SVOD models might suffer client retention since providers must continually attract users with content or price discounts to renew – for instance, many will offer a lower yearly charge to keep customers subscribing. 

Customers, who are more inclined than ever to exercise choice in a digital economy, are suspicious of recurring fees and efforts by media corporations to restrict access to multiple users or devices. To be successful with an SVOD strategy, media businesses must provide an extensive and constantly updated library of content to keep users engaged. SVOD may also be a viable alternative for organizations that cannot or do not want to collect ad income to maintain their platform regularly.

AVOD ensures a revenue stream for content that may not generate direct or recurrent client money. The AVOD business model is often used by companies that develop or gather a vast content library. However, free content sometimes comes with a catch. It may be difficult for media firms who employ the AVOD model to retain subscribers, either because the perceived quality of the content is poorer than that of SVOD or TVOD providers or because users get annoyed with the ad interruptions. Additionally, AVOD may provide significant technical obstacles to ensuring that advertisements are shown correctly and are interactive and personalized for the viewer.

Compared to SVOD vs AVOD, TVOD provides the most transparent expectations for providers and consumers. When you offer a rental or license, you know the specific operating costs and overhead for each piece of content, allowing for more precise pricing and profitability. Similarly, buyers know precisely what they are purchasing. Even if you give free content, there is no assurance that a client will utilize a TVOD platform more than once. TVOD providers must often match or beat competitors’ pricing to encourage client loyalty. 

Because a TVOD client may be occasional, it is difficult for the platform to accumulate sufficient data to provide content suggestions that would tempt them to return. TVOD providers must also be able to promptly and precisely identify the user’s location to process payment and serve content in the correct language.

SVOD, AVOD, and TVOD have advantages and disadvantages; hence, many media businesses use various techniques. Larger companies may even offer product-specific VOD service variations. For instance, YouTube offers free user-generated content (AVOD), as well as premium content for rent or buy (TVOD), and particular subscription-based entertainment services, including live TV (SVOD) (SVOD). Similarly, Hulu takes a hybrid approach with their platform, offering four price levels that include a mix of SVOD and AVOD, as well as the option to bundle with Disney+ and ESPN+. Apple and Disney+ both use mixed methods for VOD monetization. Amazon Prime Video allows users to add free trials of other streaming services, such as AMC+, as an additional means of attracting consumers.

Why Choose AVOD?

Increase Audience Engagement: 

Use advertisements to attract viewers’ attention and pique their interest in the content. It also encourages consumers to examine previews or short snippets before purchasing premium content.

Enhance Audience Reach:

AVOD services are versatile in terms of geography. Thus marketers may choose their intended audiences. Using AVOD, the targeted audience may see your advertisement and browse your website or shop while waiting for their subscription-based content.

Verified Users:

The ad-supported video streaming technology AVOD provides marketers with a more targeted approach. They may measure the ROI of their campaigns using data acquired from adverts on videos from verified users. In addition, marketers better understand where to put their advertisements to reach the most significant number of people.

Monetize With AVOD

Google will seek out advertisers or negotiate directly with businesses seeking to spend money on advertising. In most cases, AVOD is coupled with paid or free broadcast content to produce additional cash that enhances your company compared to competitors. For instance, PPC, or being paid per click, is an excellent method for monetizing a blog.

Except for fresh content, renowned blockbuster movies, and popular content featuring a celebrity, advertising-supported AVOD is an excellent alternative as a revenue source for anything else.

The AVOD business model is well suited for content producers or operators with a wide selection of youth-appealing content, such as TV content, catch-up content, and influencer content such as celebrity vlogs.

AVOD is advantageous for content aggregators that get a large volume of content from several sources and broadcasters with fresh and archived content.

AVOD is excellent for free-to-air television networks that can generate optimal income. Some types of content are more suited for AVOD, such as extended content and classic movies, since there is sufficient time to display advertisements as part of the package to make the price reasonable.

Why Choose TVOD?

One of its primary advantages is that TVOD caters to customers who simply wish to pay for the content they see.

This implies that with TVOD, you can: 

• Quickly provide more excellent value since each piece of content would have its pricing, enabling consumers to get precisely what they’re paying for;
• Provide cheaper content to set lower pricing, rather than charging a higher membership cost and losing prospective clients.
• Have more price flexibility and make content accessible for a short period or allow clients to retain it permanently.

Additionally, conducting one-time paid events, such as concerts or gaming matches, is an excellent option.

PROS

1. Accurate estimation of operational TVOD costs and lower risks:

   As the estimates for operational margins is being done quite accurately before the start of business; you never run into the risk of a single user or group of user exploiting the bandwidth. Operational costs in TVOD business are the costs of server + CDN to stream the video of a particular size + cost to acquire the single customer.

2. Easy revenue distribution model to video content creators:

   Unlike SVOD there is no confusion in what the user paid for. Thus the revenue share distribution for TVOD content is usually straightforward.

3. Better revenue opportunities for fresh release VOD content

   Generally the audience worldwide has an affinity for newly released movie and serial content. Thus charging a small amount for such piece of content leads to immediate payment from users and can reach a considerable scale.

4. TVOD can work on smaller scale then SVOD, Good option to launch business

   Since operational margins are fixed and revenue can be linked directly to content owner , it is a good option to start. SVOD generally kicks at a considerable scale.

CONS

1.   User retention is a problem in TVOD

   Since user has the tendency to pay for a particular content and then go off the platform, there is no motivation or push for him to buy new content. SVOD can just push to user to try some new unexperienced content.

2.  Content visibility controls content revenues: Challenge of recommendation

   Since the user is going to pay for the exact content and watch, whatever is presented to him in homepage or as a priority attracts his attention. There are greater chances that he will pay for it. There might be better compatible content for him in the inside pages, which by the time he discovers has no budget left to spend on it. Thus personal recommendations and presentation are a key aspect of the monetization in TVOD platform.

3. Limited Trial Opportunities, Restrictive for large content size. (E.g 2000+ hours)

   It is bad to expect the user to have an idea of all the content you have and be already decisive about the video to make payment for. He cant try without paying which limits the explorative nature of the platform.

   We will go to SVOD’s pros and cons after this infographic.

   
   TVOD for Youtube Movies, SVOD for Hotstar

Why Choose SVOD?

Numerous streaming services currently use the SVOD monetization model due to its multiple advantages for both the benefits and its subscribers.

This is because subscription services provide users with dependability, particularly when comparing SVOD to AVOD.

AVOD might provide uncertain income due to its reliance on advertisements alone. With SVOD, you know exactly how much you will get at the end of the month, and you may set the pricing of your content as you see fit.

Using SVOD, you can:

• Have a dependable source of revenue since your audience pays a monthly membership fee.
• Give clients greater flexibility by allowing them to decide when to terminate service.
• Cultivate a more exclusive and devoted client base that feels like a community; after all, they are paying for your content.

PROS

1. User Retention is high: New content trial is easy

   Since the user has paid for the whole platform in SVOD, though he has some favorite content there is also a lot of additional content he can try. Mail campaigns, ads, and homepage prompts can motivate the user to try additional content. Yes, it will lead to higher costs, but it also leads to higher retention, more content ingestion and thus better performance of the overall platform. Iterations over recommendations and costing are done for better monetization strategies.

2. SVOD allows recurring revenue streams: Better Predictability

   SVOD supports recurring charging models. Users can put in their credit card which renews the contract on monthly basis. This allows for the VOD platforms to better predict their upcoming revenues and thus grow their business.

3.  Best for large content portfolio

   SVOD works best if you have a large content portfolio, provides better retention, time per user, and trust to content providers that their content reaches the maximum audience. More details on SVOD is here.

   CONS

4. SVOD Only works at scale, Risky at a low user base

   Since SVOD does not inherently directly link operational costs of bandwidth to revenues, it works generally at a larger scale. The cost of delivery reduces at scale.  High pricing or Limitation on content hours can make it work at a lower audience number.

5.  Revenue distribution agreements are tricky in SVOD

   It is difficult to determine which movie or series actually prompted the user to buy the subscription. Though video views and engagement data are at the backend, the overall revenue distribution model becomes tricky. It is a combination of pre-paid license fees for content, revenue share on basis of the number of views, and retention rates, etc.

6.  Recommendations and Visibility for large content is a challenge

   Since VOD platforms with SVOD as a major revenue channel have 1000s of hours of content, which movies/serials to present at the front, to recommend is a challenge. Though at the same time, it is an opportunity to charge money from new content producers for advertisements and promotions on the platform.

Now we present some key stats and estimates on SVOD & TVOD  implemented with some of VdoCipher customers.

How To Find the Best VOD Model To Use as a Content Creator

AVOD business models rely on advertisements to generate money. Advertisers pay to have their ads or promos shown on a specific program or channel, while consumers may watch content for free. These three categories compose the conventional AVOD Business Model:

Content Creators/ Publishers:

Content developers produce high-quality works that entice viewers and marketers to pay for advertisements. When the content gets a large audience, the viewers become a source of money for the publishers via ad revenue. Similarly, marketers have grown increasingly interested in paying publishers for advertisements.

Advertisers:

In the AVOD business model, advertisers pay publishers to promote their goods or services in content to attract more viewers’ attention. Advertisers rely on content providers to ensure that they reach the appropriate audience. In addition, marketers pay for specific time slots or channels to reach their target audience and assess the return on investment of their campaign (ROI).

Audience/ Viewers:

Audiences are the primary consumers in the AVOD business model since they come to see content, and advertisers pay for their attention when they view advertisements. The audience is the link between publications and advertising.

AVOD Market Size and Its Growth

Advertisers and content providers or publishers want to capitalize on the vast scale of the AVOD industry. The market is anticipated to expand due to the technological advances that will let this business model evolve further. Listed below are the reasons why the AVOD market is increasing.

• Innovations in streaming technologies

• Boost the number of smartphone users

• Increase in the generation of internet content.

The business model for AVOD is anticipated to expand even further because of its enormous market size and exponential growth potential. Over the next decade, the AVOD market is projected to grow by 144 percent, hitting $66 billion in sales across 138 countries.

Since the introduction of cryptocurrencies, there has been a surge in online content production. Streaming technology will get more sophisticated, making streaming quicker and films crisper for users. This implies kids will watch videos for longer and more often. The number of smartphone users will rise as more individuals can now afford to own one. These reasons will result in a substantial AVOD market that will benefit all stakeholders.

When selecting the right video monetization platform, content creators need to take an informed decision and select the monetization model that best suits their needs.

To launch a VOD platform with the highest security from piracy + seamless experience, Start a free trial at VdoCipher.com.

This short video here explains how to upload, embed, and securely stream videos through VdoCipher.

Popular FAQs Around VODs

What are the main differences between TVOD and SVOD models?

TVOD, or Transactional Video On Demand, operates on a pay-per-view basis, where users pay for each video or series they want to watch. This model is ideal for newly released movies or exclusive content. SVOD, or Subscription Video On Demand, on the other hand, offers unlimited access to a library of content for a recurring subscription fee, making it suitable for users who prefer a wide range of content at a fixed price.

Which VOD model is more profitable, TVOD or SVOD?

Profitability can vary based on several factors including content type, target audience, and platform reach. TVOD can generate high immediate revenue from new or exclusive content, while SVOD provides a steady income stream and can be more profitable over time with a loyal subscriber base. The choice depends on the content provider’s strategy and resources.

How do content creators decide which VOD model to use?

Content creators consider the nature of their content, target audience, and market trends. For exclusive or premium content, such as new movie releases or special events, TVOD might be more appropriate. For a broader library aiming to attract a steady subscriber base, SVOD could be a better fit. Creators may also look at hybrid models or change strategies based on performance and user feedback.

Can a platform offer both TVOD and SVOD models?

Yes, a platform can offer a hybrid model that combines TVOD and SVOD, allowing users to choose between paying for specific content or subscribing for access to a broader library. Example, Amazon Prime. This approach can cater to a wider range of user preferences and maximize revenue by attracting both types of viewers.

Siddhant Jain

CEO, VdoCipher. Writes about video tech, ed tech and media tech.

www.vdocipher.com/

The post SVOD vs TVOD vs AVOD: Comparing the Three Video Monetization Model In Detail appeared first on VdoCipher Blog.

Basics on Video Monetization

Video monetization is the process of generating income from the videos you publish online. Creators get paid when someone performs any of the activities described in the ‘How to Monetize Videos’ section while, before, or after watching their videos. The more people watch your videos or take a subscription, the more earning potential you have. Broadcasters can make significant revenue from their videos in a number of ways. This includes ad insertion, incorporating sponsorships, offering paid subscriptions, and more.

YouTube has been the first choice of creators to monetize their content online owing to its vast reach. In 2020, YouTube advertising generated $19.77 billion compared to $15.5 billion in 2019. YouTube has its own content monetization guidelines which were recently revised. To get videos monetized, the channel should come under the YouTube Partner Programme.

In the case of video platforms like YouTube, ads get placed via the platform’s own javascript. In other cases like embedding videos on your website, it gets done via Video Ad Network-specific javascript.

There are other modes too without the inclusion of any such code. They are specific to the video platform choice you make and they have been discussed in the below section.

How to Monetize Videos

There are multiple ways, some require code, some do not. Some are platform-specific and some are applicable for all. So now let us discuss them one by one.

Own platform or Website

Video services are booming with a growth of 73% between 2018 and 2019. The figures are sharply rising. Building your cloud video platform can bring many benefits to your business. It is also a good start for beginners who are interested in making it from scratch. You can develop the roadmap, freely gate the content, own your audience, and have complete control over the payments. To build an eLearning platform, you can use our guide here. After creating a website or platform, you can decide among several ways discussed in the later section on ‘How to monetize your hosted videos.’

Video Advertisement Network

We know of YouTube, which uses its own partner program to run ads on your videos. Even platforms like Facebook allow you to monetize via their own audience network. With such increased popularity of videos, many publishers now offer their Ad network services for creators. The popular one includes Facebook Audience Network, Primis, AdPlayer.Pro, OpenX, Magnite, Select Media, Verizon Media, and AdMedia.

Sponsored streams

A sponsored stream is a live event on the internet funded or produced by companies who want to associate their image with you. In recent times, the live stream format has gained immense popularity, with brands using it for lead conversion. Sponsored streaming is highly engaging and has some eye-opening statistics. For example, 40% of live-stream viewers admit the media improves the chances of making a purchase. Companies that go live report a 41% increase in their search traffic.

Merchandise or Video Commerce

We can use video content to market and sell products or services to the target audience. Any product available for sale and purchase is merchandise. These promotional items may include T-shirts, mugs, hoodies and more. This is most popular among YouTube creators, and probably you may have encountered merchandise selling channels.

Affiliate links

One of the most common ways for online money making is by using affiliate links. Companies growing customer base generally offer affiliate links to promote. When someone purchases by clicking on that link, you receive a commission from the sale. The commission rates vary from around 4-60% of the sale. You might often see such links in the bio of a video. Popular affiliate programs are Amazon Associates, ShareASale and more. Make sure to use affiliate marketing software to track your campaigns and check results.

Subscriptions

The subscription-based video on demand (SVOD) monetization model is one where the users pay a recurring monthly or annual fee to access the video library. Subscribers need to pay upfront in exchange for 24×7 access to a wide video content range. Netflix, HBO Now are some popular subscription-based video platforms.

Video Monetization Tools, Websites, and YouTube Alternatives

There is no doubt that YouTube is considered the first choice as a video monetization site globally. On the other hand, making money on YouTube isn’t as easy as it seems. From February 2018, creators must meet YouTube guidelines to apply for YouTube monetization or have ads on their videos. As of 2021, In the last 12 months, creators must have 4,000 valid public watch hours and 1000 plus subscribers. This rule has put a lot of pressure on new and small creators who flock to YouTube to earn money. YouTube monetization is getting tougher with increasing competition, strict guidelines and legal actions with being a YouTuber. If you find it hard to generate income from YouTube, here are some best YouTube monetization alternatives with better monetization features, security and ease of use.

1- Patreon

Patreon is a creator membership platform where subscribers support the content creators through a monthly or annual subscription model. The platform hosts artists, video creators, writers, educators, podcasters, photographers, musicians and more. Those who subscribe to a creator’s work are known as Patrons. In turn, the fans or subscribers get ad-free or exclusive access to events, personalized interaction with creators, and much more.

Patreon generates revenue by charging content creators for hosting their content on the platform. While signing up, creators have the choice of three plans:

• Lite – Patreon chargers 5% of the creator’s monthly income
• Pro – charges 8% of the monthly income
• Premium – charges 12% of the monthly income. This plan gives additional options to sell branded merchandise.

Patreon does not host videos on its platform. This means the video needs to be uploaded on a video hosting platform before posting on Patreon.

2- Vimeo

Vimeo is a popular alternative to YouTube offering high-quality video streaming solutions. After the launch of Vimeo OTT and Vimeo On Demand, there is a significant influx of YouTubers on the platform to sell videos online. Vimeo offers multiple ways for online video monetization, but it’s not free like YouTube. Instead, monetizing your video content requires a subscription fee that varies with the plan.

2.1- Vimeo OTT: It offers SVOD-based streaming monetization under three paid plans, Starter, Growth and Enterprise. Creators can earn on a monthly or annual basis by live stream monetization and launching subscription services. Some tools available with Vimeo OTT are Integrated CMS, human support, advanced selling options and more. Creators can even blend the TVOD model with Vimeo live pay per view events. Additionally, it includes one-off payments to rent and buy specific titles.

2.2- Vimeo On Demand: You can rent, buy, or subscribe to viewership under this monetization option. You also get complete control over the pricing. 90% of the revenue goes to the creator after transaction costs. Customers can watch via Android, iOS, and other platforms via the Vimeo app. One needs to have at least Vimeo Pro membership for Vimeo On Demand monetization.

3. Dailymotion

Launched in 2005, Dailymotion is a platform to create and share video content, having 300M monthly active users. Dailymotion offers some decent online video monetization options for publishers and advertisers. However, to earn revenue from video monetization or uploaded videos, you have to become a partner. To start with, one needs to reach 1000 views from your channel’s uploaded content.

Many videos on the platform serve in-stream advertisements, i.e., ads that run before, during or after a video. The higher the view count, the more is revenue generation. The video monetization features include Compatible with third-party trackers and multiple ad-servers. It also includes Dailymotion inventory promotion to own buyers and Video monetization on third-party websites, and more. Creators can even earn by embedding Dailymotion videos on their verified websites.

4. Kaltura

Kaltura MediaSpace is a fully customizable site, serving as a repository of videos. MediaSpace has collaborative communities, channels with contributors, moderators and viewers. Within the MediaSpace instance, content owners can monetize specific titles or channels via SVOD or PPV models. To do so, the InPlayer’s monetization module offers full integration with Kaltura MediaSpace.

5. Wistia

At Wistia, you can monetize videos by adding a paywall and content gate. Just get your video on Wistia, pick a paywall platform (Cleeng & InPlayer) and start monetizing. Wistia integrates with both Cleeng and InPlayer paywalls. Cleeng monetization platform offers PPV, subscriptions and passes monetization methods. Using InPlayer, monetize Wistia videos and accept payments by granting access to the videos.

6. IBM Watson Media

Cloud-based IBM video streaming offers solutions to monetize videos and maximize ROI. IBM has a range of monetization options for live streaming and VOD libraries. IBM offers direct monetization methods like PPV and advertising models for premium content, including Google Ad Manager. In addition, there are mix and match monetization methods like ad-friendly sponsorship or accepting donations via Patreon or PayPal.

Monetize your hosted videos on an eLearning website, LMS or Media platform

For EdTech platforms, monetization strategy should be a top priority to get a good ROI. The right content monetization approach will not only attract visitors but also provide revenue. Below are the well-proven video monetization strategies for an eLearning video platform.

Subscription Model

Subscription is the most popular way to monetize an eLearning platform. In essence, members will be only able to access your learning content library after opting for a monthly or yearly subscription. In addition, members can be subscribed based on the number of courses available, number of users and more.

Premium access

A type of subscription model offering members accesses to exclusive content, perks or VIP access. Usually, for premium content, a one-time payment is implemented.

Corporate or Group accounts

This model offers multiple access to users under the same entity (company or college). Often eLearning platforms give bulk discounts based on the number of members listed. Thus, learners from a company are enrolled in a single course, interacting with one another.

Freemium

In this business model, eLearning platforms offer users free training or limited features but charge for additional features. For example, some offer free courses but to receive a completion certificate, the users will have to pay an amount. Some learning platforms instead provide paid feedback, mentoring or final exams. In such cases platform charges for the things most valuable to a user.

Charging commission from Authors

For hosting a trainer or coach’s premium content on your platform, a commission is set. This charge varies with the course’s popularity, pricing, subject, trainer expertise and more.

Online advertising or Ad-supported learning

If you have many daily visitors on your website, you can use video ads or web banners. You can inject them via Video Ad Network-specific Javascripts with customization of your choice.

At advertising spots, you can even display educational videos or ebooks. These advertisements may distract the visitors from taking your site seriously. Content on such platforms is often free, and the revenue is generated through advertising or affiliate partnerships.

Note: Do keep your premium hosted videos secure from piracy using DRM solutions by platforms like VdoCipher. This will also help you in creating multiple encrypted copies of your videos for global distribution via CDN and different bandwidth supported bitrates.

OTT Platform Video Monetization

In recent years, there has been a massive shift of viewers from traditional broadcasting services to Video On Demand (VOD) platforms and OTT networks. For broadcasters and streamed video content, there are three monetization business models to choose from, namely, SVOD, AVOD and TVOD for your video monetization platform.

Subscription Video On Demand (SVOD)

With SVOD, users pay a recurring monthly or annual fee to get unlimited access to a platforms video content library. A very popular example of SVOD is Netflix. Users pay monthly to access the complete video content whenever and wherever they choose and when they stop paying, the access is revoked. Therefore, SVOD is one of the most profitable monetization models as these platforms generate recurring revenues as long as users enjoy their video content. In addition, viewers can watch different types of video content without annoying video ads by opting for one easy recurring payment.

In the first quarter of 2021, Netflix had 207.64 million paid subscribers globally, with 73.95 million coming from the United States and Canada. Popular streaming service Hulu reported 42.8 million paid subscribers in the third quarter of 2021 compared to 35.2 million in the previous fiscal year. According to Statista, the revenue from SVOD is projected to cross US$71,506m by 2021.

Transactional Video On Demand (TVOD)

TVOD or transactional video on demand is another method to monetize your videos. In this model, consumers purchase content on pay-per-view or pay-per-video or pay-per-series. In other words, the audience pays upfront for each watched video or digitally downloadable video content. TVOD is offered in two ways. One is by granting users lifetime access to a piece of content with a one-time payment (electronic sell-through (EST)). Other is download to rent (DTR), where customers can access a selection of content for a limited time by paying a smaller fee.

Common examples of TVOD include Google Play, Amazon Prime Video and Apple’s iTunes. Although the TVOD model seems restrictive, it can be highly profitable. In 2020, TVOD had a substantial holding as most films were released through this method due to cinema halls being shut. Recently BookMyShow ventured into the TVOD model with BookMyShow Stream, where users have to only pay for the content they watch. TVOD is designed for a larger audience who is not consistent and interested in only paying for the content they watch. There is no joining fee, and anyone can buy the content.

TVOD platforms generate higher revenue per viewer by timely offering consumers live sports and fresh releases. However, TVOD is not just restricted to entertainment and is now making a way in the education sector. TVOD is a great model for students who want to enrol in individual courses offered by the eLearning platform and learn at their own pace. Udemy, Coursera are some of the popular TVOD eLearning platforms.

Image source: Statista

Advertising Video On Demand (AVOD)

AVOD is free to consumers, unlike SVOD and TVOD monetization models. AVOD is a sponsorship model where the advertisers put their ads in front of the audience. Here, the viewers have to watch ads in order to watch the free video content. Here, YouTube is a classic example. You are often presented with an advert commercial at the beginning or somewhere within the video on YouTube. More the people view or interact with the video adverts, the more profitable they are. In such a case, creators who have a large audience base have more potential to earn money from videos. With more users preferring an ad-free experience and all the ad blockers around, AVOD is considered inferior to other monetization models. As a result, premium content creators rarely use AVOD as it generates lower revenue than SVOD and TVOD

Make Sure You Don’t Lose Your Revenue To Piracy

So far you’ve come across different ways to monetize your videos in this blog. But one thing as crucial as monetizing your videos is protecting them from piracy.

As the video platforms continue to grow, so does the piracy associated with them. Annually platforms lose up to billions of dollars in revenue. So it is quite imperative that you make sure that make certain preparation against piracy. After all, money saved is money earned.

In order to protect your videos from piracy, you need to ensure that your videos have DRM encryption, which saves your videos from any sort of downloads. Thus protecting you from any loss in revenue due to piracy.

This is where Vdocipher plays a big part, we know how much effort a content creator puts into their work. This is what we value and in order to get them the right return for their effort, we make constant efforts on our end to make sure that these videos don’t get downloaded. Our key security features include Hollywood grade video DRM, Dynamic watermarking, and screen recording protection on Android and iOS. On top of it, you can put restrictions on video playback in terms of IP, Geo & Time Based, giving you absolute control over who watches the video, where they watch it and how many times.

FAQs:

What if someone’s YouTube’s channel is rejected for monetization?

In case of rejection, one can re-apply after 30 days of rejection email.

Can videos be uploaded directly from a device on Patreon?

Patreon does not directly host video content on its website. Before posting on Patreon, one needs to upload on video hosting sites like Vdocipher, YouTube or Vimeo.

Which are the most popular AVOD services in America?

According to Statista in the 2nd quarter of 2021, Facebook Watch is the most popular ad-supported VOD. Further leading is Ruku Channel, Peacock, Tubi TV and more.

What are the different methods to monetize live streams?

Pay-Per-View (PPV), play ads, sponsorships, donations, subscription-based model, companion ads or banners.

Vishal Sharma

My expertise focuses on DRM encryption, CDN technologies, and streamlining marketing campaigns to drive engagement and growth. At VdoCipher, I’ve significantly enhanced digital experiences and contributed to in-depth technical discussions in the eLearning, Media, and Security sectors, showcasing a commitment to innovation and excellence in the digital landscape.

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