Businesses are getting more and more interested in launching their video streaming platforms. They are inspired by Netflix’s success and don’t want to fall behind the market. That’s why many are trying to launch their own video service and share experiences and information there.
In this article, we are going to explore the types of video-on-demand services and monetization capabilities they provide.
So, what are the types of VOD services?
#1 AVOD — Advertising-based Video-On-Demand
AVOD service is one of the most popular types of video-on-demand services. It usually offers free video content, but viewers watch ads instead. A popular example of an AVOD platform is YouTube.
AVOD is usually used by service providers with many followers and customers. For example, you have plenty of people following you on Instagram and YouTube, and you want to generate more revenue from what you do. Then, you can launch an AVOD service allowing viewers to watch it for free.
You will earn money by allowing third-party companies to advertise on your platform.
People appreciate AVOD services because they offer free content and don’t show as many ads as cable or satellite TV. Video streaming platform advertisements usually last for several seconds. So viewers don’t get tired of them.
What is more, targeting can be more accurate on video streaming platforms. Ads can be shown to people who might be interested in certain products or services.
Additionally, there is a rise in AVOD services in comparison with subscription-based platforms. People are becoming more caring in relation to their money.
It should be noted that AVOD can be mistaken for FAST. FAST stands for free ad-supported TV. But FAST refers to live TV content, while AVOD refers to video-on-demand streaming services.
#2 SVOD — Subscription-based Video-On-Demand
SVOD services are also popular among users. They require a fee for access to video content. People purchase that fee once in a period (a week, a month, a quarter, or a year) and watch videos anytime they want.
SVOD platforms require recurring payments. But the subscription is easy to cancel, unlike cable television.
Viewers get unlimited access to content and can view as many videos as they desire. People appreciate these platforms because they often offer content that can be found on other platforms, including ad-based services. Also, it is easier to have one platform where you can access all videos than spend time looking for a certain video on many platforms.
Some of the video streaming platforms also have recommendation functionality. Recommendations are usually based on the user’s history of videos already watched.
But it should be noted that lately, SVOD platforms have become less popular among viewers. There is a subscription fatigue phenomenon. It means that users are tired of all the subscriptions they have. That’s why they turn to ad-based services.
#3 TVOD — Transactional-based Video-On-Demand
Transactional-based services require a fee for every video they offer. Such a model is also called pay-per-view. Video streaming businesses usually use this model for exclusive content. For example, they can combine a TVOD model and an SVOD one. So, there will be plenty of videos available on a subscription, and some videos will go into a premium category. They will require additional payment.
But there are platforms that are built on a transactional-based model. For example, iTunes is one of these platforms.
We have described the most common video-on-demand platform types. But there are more of them. For example, there are NVOD, FVOD, and PVOD. But those that we talked about can help you bring the most revenue.