The catch-all term for new generations of entertainment is video-on-demand (VoD). However, SVoD, AVoD, or TVoD are not considered subsets or types of VoD (Video-on-Demand) but instead categories themselves. This blog will break down the differences and benefits of each.
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SVoD – Subscription Video-on-Demand
SVoD is short for Subscription Video-on-Demand. SVoD services grant users access to an entire library of video content with a recurring subscription fee charged per day, month, or year.
SVoD offers greater flexibility to subscribers: for the majority who opt for monthly payments, there is no commitment to a long-term contract; viewers are granted greater freedom to opt-out at any time. This creates a free market in which SVoD providers continually compete to retain consumers through personalized content or attractive pricing options.
SVoD examples you may know include Netflix, Hulu, Amazon Prime Video, Disney+, or HBO Max.
TVoD – Transactional Video-on-Demand
TVoD (or Transactional Video-on-Demand) allows viewers to purchase content on a pay-per-view basis. Rather than giving purchasers access to the entire catalog, TVoD services charge a fee for each video or video package that viewers consume.
There are two subcategories of TVoD:
- Electronic Sell-Through (EST) – pay once for permanent access to a particular piece of content
- Download to Rent (DTR) – gain access to a particular piece of content for a limited time with a smaller fee
TVoD services typically retain customers by offering attractive pricing, so they are motivated to return in the future.
Top services in the TVoD market are Google Play, Apple’s iTunes, Sky Box Office, or Amazon’s video store.
AVoD – Advertising-based Video-on-Demand
AVoD stands for Advertising-based Video-on-Demand. With AVoD, viewers need to sit through advertisements, much like broadcast television, in exchange for free-content access.
- The ads on AVoD services offset costs for content, production, hosting and delivery and hopefully turn a profit in the end. Examples include:
Popular AVoD services are DailyMotion, YouTube, Pluto TV, Tubi TV, and 4OD.
The Future and The Search For the Moneymaking Model
The growing gravitation towards OTT technology has made content delivery break free from cables, geographic restrictions, or broadcasting schedules. These emerging OTT trends also have fundamentally changed how video is sold, produced, and consumed, becoming more important in many cases than the cable industry that had dominated the media landscape… Of the types, SVoD is currently the most popular.
Netflix is often the first SVoD service that comes to mind. According to Nielsen, Netflix accounts for 34% of US streaming/8.5% of overall viewing. The number of Netflix subscribers is projected to reach 286 million by 2026, while that of Disney+ (another SVoD giant) will be 294 million (statistics updated in Feb 2021).
However, it isn’t just about the media giants like Netflix, Amazon, or Hulu. Small and new SVoD businesses are also growing and evolving every single day. Here’s an example:
“Founded by former Disney and Discovery executives and backed by Michael Eisner’s (former Disney CEO) Tornate Co., Struum is the newest OTT player to join in this booming industry of the SVoD market. The new streaming venture has a mission to help bring content from hundreds of niche and specialty services to consumers. On Jan 7, 2021, Firstlight Media announced its collaboration with Struum to deploy its new cloud-native streaming platform (built on revolutionary Gen5 architecture) to support the growth of Struum.”
WHAT IS SVOD?
Whether it is SVoD, AVoD, or TVoD, OTT offers business models that work for every situation – and the choices every consumer needs to enhance the viewing experience.
Firstlight Media has its headquarters in Toronto and additional locations in San Diego, Los Angeles, and Chennai, India. For more information, visit firstlight.ai.