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.

DVD sales are declining and being beaten by Subscription Video on Demand

DVD revenues have, since their launch in early 2000s, dominated the home entertainment market. At their peak in 2006, DVD sales dwarfed box office receipts. The $16.5 billion in DVD sales towered over $9.6 billion in theatre revenues.

However, in the intervening decade, the rise of SVOD platforms has contributed to a decline in DVD sales. In 2016 revenues from streaming services ($6.2 billion) edged out DVD sales ($5.5 billion) for the first time ever.

Movie studios’ hand has been forced by piracy. The most pirated episode of Game of Thrones has been downloaded 13 million times. While subscription video on demand services are also afflicted by piracy, the bigger brunt has been faced by movie studios.

This is because streaming services offer an inexpensive alternative for most users who would otherwise be lost to piracy. This weakens the position for movie studios when it comes to licensing content to subscription video on demand platforms.

Growth in the home entertainment industry has primarily been in the SVOD space, dominated by Netflix, Amazon Prime and Hulu. Subscription video on demand platforms offer seemingly unlimited choice to consumers, with the express intent to lock-in viewers to their platform.

Amidst the rapid shift towards subscription video on demand services, movie studios are looking for a new source of revenue. And now they just might have found one.

Premium Video on Demand

Whispers of a Premium Video on Demand model have been heard around Hollywood ever since streaming video became a possibility. What has changed over the last year has been theatre chains’ willingness to consider this model.

This new revenue model entails release of film through video on demand before the film is made available on DVD, Blu-ray or Streaming services. The time of release is critical. This is because films are proposed to be released on Premium Video on Demand within a few days of theatre release.

This is the thinking: The first two weeks of a film’s theatre release is when a large percentage of revenue is generated at the box office. Beyond this period,  the initial novelty fades. The movie however is still in the mind of the general movie-going population. Premium Video on demand is intended to capture the segment of potential audience that would like to watch the movie at the comfort of their homes, and who otherwise might not go to the theatre to catch the film.

Needless to say, when considering the pricing and timing of the Premium Video on Demand release, maximum care needs to be taken so as to not cannibalize theatre revenues, and yet earn strong revenues. Movie studios are considering time windows of 10-45 days from the date of theatre release to release new films on premium video on demand.

In all likelihood, movie studios are likely to build their own platform to use for Premium Video on Demand. Costs of building and promoting a premium video on demand platform are low when compared to the losses from sharing revenue with an aggregator like Netflix. Movie studios can quite conveniently use VdoCipher’s secure video streaming to host videos on their premium video on demand platforms.

What is the Hollywood Release Window?

In Hollywood the release window is the period after the release of the film when the film is solely available on theatres. This period of 90-120 days before the film is released on DVD or subscription services is considered sacrosanct by the theatre chains. Theatre owners indeed have reason to consider this period sacred. They fear that attempts to shorten this window would cause theatre-goers to skip the cinema halls altogether and wait out a short period to catch the newest release.

On the other hand, studios are aware that different movies have different reception at the box office. Some films see extended runs in theatres for over 3 months whereas many end up disappearing within a month. The challenge is to apply a one-size-fits-all premium video on demand model in the film industry. This is because with films it is only about a week after release that a film’s fate becomes clear.

Risks in launching Premium Video on Demand for Studios

The studios are aware of the dangers of trying to fix something that is not broken. Risks in the premium video on demand model are evident – Premium VOD may cannibalize theatre revenues, confuse users, and may even lead to further decline in the culture of audience going to cinema to watch films.

Watching films in cinema halls is a different experience from watching at home. Besides the physical experience of watching the film in theatres, there is also the aspect of pop-culture relevance of films. Popular films gain an audience because people watch a film and recommend it to their peers. This peer pressure contributes to a large percentage of people going to theatres.

Netflix has already disrupted the film industry with its model of releasing films on the VOD platform on Day 1 itself. Starting a Premium VOD option may just about be the final nail in the coffin for movie theatres.

Just as studios are wary of pulling audience away from movie theatres, they are aware that overall changes in home entertainment means that viewers now experience films differently than before. Developing a premium video on demand platform would mean that movie studios are better equipped to fight off Netflix and Subscription VOD websites.

Ideal release window and price point for Premium video on demand

The debate currently is about the time window between theatre release and release on Premium Video on Demand. A related problem is that of price. It is over these two points that the major studios differ.

Studios, Advertising and Pricing

Warner Bros has proposed a $50 fee for a Premium Video on Demand release 17 days
Fox is considering $30, and making films accessible after a 30-45 day period of theatrical release
Fox and Warner Bros. have displayed flexibility in this, with Warner Bros. also interested in the pricing and timeline of Fox’s proposal.
Universal wants to see Premium video on demand release date in under 20 days. Their proposition is $40 after 10 days.
Disney is seeing a golden 2017 (Beauty and the Beast, and Pirates of the Carribean both generating handsome profits). Disney films are often seen as sure bets at the box office. Their films are eminently suited for the theatre experience, for which reason it is extremely unlikely to undermine its bottomline by agreeing to Premium Video on Demand.

The studios cannot collaborate together to achieve a Premium VOD model because of anti-trust laws, and are likely to enter into agreements directly with theatre chains.

Advertising and Public memory: Upto and during the weeks of a film’s release released, there is extensive promotion and publicity for movies. If the film being released through video on demand shortly (between 10 to 30 days) of the theatre release, it is much more likely to be in public memory. On the other hand if this period is extended to beyond 45 days a separate promotional campaign would be required to release on premium video on demand, which may not be as effective either. The risk is that by Day 45 the movie would have receded sufficiently from public consciousness that responses will be tepid.

Pricing also becomes relevant in this regard. The lower the price the higher are people likely to want to watch films at home only and avoid theatres. To placate theatre owners, studios may price premium video on demand films for as much as $50.

Theatre Owners and Film-makers on Premium Video on Demand

Exhibitors are quite clearly against Premium Video on Demand, and they seek reassurance that there will be no further changes in the release window over the next 5 to 10 years.

Film-makers are divided when it comes to Premium VOD. Many such as Steven Spielberg and Peter Jackson back the concept of Premium Video on demand (supporting Screening Room). On the other hand many filmmakers such as auteur Christopher Nolan stress the significance of theatre for film, and would not want to be involved in anything to jeopardize that.

Subscription Video on Demand Platforms

Netflix has of course circumvented the entire theatre release model. This has found the video on demand platform facing some resistance – Cannes Film Festival now requires that to be able to compete for the Palme d’or movies need to have theatrical releases. 

Amazon Studios on the other hand reaffirmed their committment to theatrical release of films that they produce. The studio produced Oscar winner Manchester by the Sea, which enjoyed an extended theatre run.

Other Players in Premium Video on Demand – Prisma and Screening Room

Prima is a high-security home entertainment system that enables users to watch films at their homes at the same time as theatre releases. It is prohibitively expensive, and the anti-piracy restrictions means that folks are unlikely to want to capture films using this technique. Prima costs $35,000 for installation and $500 for each time you want to watch a film. The service offers movies from Film Studios Univeral, Lionsgate and Paramount, and is in talks with Warner Bros., Disney and Sony.

Prima Security features include background check, restrictions on size of home theatre hall and minimum size of theatre screen, besides fingerprint authentication at each time of video playback. This is one that the likes of Brad Pitt and Woody Allen are likely to have at their homes.

Sean Parker cofounded Screening Room, which intends to introduce direct online release of films at the same time as theatre release.Sean Parker is notorious for disrupting the music industry with Napster. Under its plan, viewers can rent movies the same day as theatre release for $50.

Screening Room faces considerable opposition from studios and exhibitors.The company claims that it can generate $8.5 billion revenue annually for the film industry. Movie studios however disagree, and believe the potential returns are not very sufficient. 

Under its proposal, of the $50 rental fee, 20% would go to the movie’s distributor, participating theatre chains would get upto $20 from the fee. Screening Room has not gained much traction, largely because of its outsider status in Hollywood and because of its aggressive same-day release model.

It is likely that Premium Video on Demand will take in the near future. VdoCipher’s full-stack DRM is eminently suited for releasing films online simultaneously with theatre release. Online businesses also often require features over and beyond video security. VdoCipher fulfills all major requirements for enterprise video hosting. The complete set of features that VdoCipher offers for enterprise video hosting may be found here.

Find more details about VdoCipher’s DRM infrastructure and our integration of Widevine DRM for Hollywood-grade security, which helps us protect your premium content.

Siddhant Jain

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

www.vdocipher.com/

The post Hollywood’s Premium Video on Demand Model appeared first on VdoCipher Blog.