VOD (video-on-demand) is a type of video distribution platform that offers high flexibility to the viewers. Viewers can view the VOD content anytime from anywhere according to their preferences. VOD business has flipped the business of traditional cable or satellite connections. Viewers can now watch video content via a VOD platform and a stable internet connection.
The revenue generated by VOD platforms around the world will reach USD 85,887 million in 2021. Viewers are ditching traditional methods to watch videos and are finding on-demand platforms more accessible. The video streaming revenue for on-demand platforms is expected to rise with a CAGR (Compound Annual Growth Rate) of 10.17% by 2025.
The cable business model is also preferred by content providers. The current market share of cable TV is approximately 50%. However, VOD streaming business plans will also be successful because the number of cable TV subscribers fell by 28% from 2013 to now. Are you wondering how to start a VOD business? Read on to know more about the history of VOD and revenue models.
How VOD Business Became so Impactful?
A VOD service company can choose from multiple business model channels for generating revenue. Besides subscription revenue from viewers, the revenue structure of VOD platforms also lets you earn through advertisements. To date, many on-demand streaming platforms have gained popularity.
It all began in 1995 when a Major League Baseball match was streamed by ESPN. Many companies started investing in a live streaming business plan. In the next ten years, VOD business models have gathered many subscribers. Since then, the number of on-demand viewers has been increasing every year. OTT streaming services are also a type of video-on-demand service that allows viewers to watch videos whenever they want.
What Are the Types of VOD Business Models?
The different types of VOD business models and what is SVOD? and their pros/cons are as follows:
- SVOD (Subscription Video on Demand)
SVOD business models ask viewers to subscribe for their monthly/quarterly/yearly plan for accessing the VOD content. You must have heard about some of the best SVOD-based VOD platforms like Netflix, Amazon Prime, and others.
Pros of SVOD
- Fixed subscription prices will allow OTT businesses to earn a particular amount of revenue every month.
- SVOD model allows content publishers with a greater profit margin. Content publishers choose top SVOD services to generate profit even with a few thousand subscribers initially.
- SVOD model lets you retain your viewers easily as compared to other video monetization models.
Cons of SVOD
- Any changes in the fixed price of the subscription plans may motivate a customer to opt for another VOD platform.
- If the lowest subscription plan is not cheaper, it would be difficult to find new customers.
Who Should Choose the SVOD Model?
If your business wants to provide on-demand videos without any advertisements, it is better to choose the SVOD model. It is better for a vod streaming service business plan with a predictable income/revenue.
- AVOD (Advertising Video on Demand)
AVOD companies provide an ad-based video streaming service. Via AVOD VOD platforms, viewers can view the digital content for free. However, they will have to go through advertisements similar to a cable TV plan.
Pros of AVOD
- As long as viewers are comfortable with ad interruptions, they can watch videos for as long as they like.
- Best AVOD platforms have a diverse audience that can be targeted with customized advertisements.
Cons of AVOD
- If more viewers are comfortable with advertisements, you may not be able to generate substantial revenue with this business model.
Who Should Choose the AVOD Model?
If your business can provide free on-demand videos to customers, you can choose the AVOD model.
- TVOD (Transactional Video on Demand)
TVOD revenue channels allow viewers to buy or rent an on-demand video. Users will only pay for what they watch via a VOD platform that follows the TVOD model.
Pros of TVOD
- TVOD is a great way of VOD monetization if only a publisher can only offer a limited number of videos.
- With the TVOD business model, you don’t have to launch an integrated or complex platform.
Cons of TVOD
- VOD platform monetization via TVOD will not generate revenue consistently like SVOD or AVOD models.
Who Should Choose the TVOD Model?
Beginners in the VOD industry can use the TVOD model as they have less content to offer. It can also be used for one-time events or eLearning.
- Hybrid Model
The hybrid revenue model of the best VOD platforms is a perfect blend of SVOD, AVOD, and TVOD monetization models. Hybrid monetization models can be customized by the platform providers based on their requirements. The hybrid model combines the best features of different types of revenue models to offer a better user experience.
How to Start Offering On-demand Videos for My Business and Upscale?
VOD platform examples are everywhere around us. From YouTube to Netflix, there are many VOD platforms in the market. For launching a VOD platform for your business, follow the mentioned steps:
- Plan Your VOD Content
You should decide the type of VOD content you are going to provide. Planning your VOD content will help you in selecting the business model accordingly.
- Choose the Business Model
The business model for a media company would differ from that of an eLearning platform. Choose an appropriate business model based on your business requirements.
- Choose a Platform Provider
Choose a white-label VOD platform provider to develop a platform according to your requirements. A white-label platform provider will let you gain lifetime ownership of your developed VOD platform. You only have to pay once for the development of your white-label VOD platform.
- Build Brand Reputation
Offer high-quality and diverse VOD platform content to attract more audiences. Apply the right marketing strategies to upscale and generate huge revenue.
You can launch an on demand service business model with the help of a reliable white-label platform provider. Choose business models and revenue models over the internet that can help you in generating huge revenue. Businesses can also use a hybrid monetization model for more flexibility. Compare VOD platforms’ revenue models and choose one for your business!