In the age of COVID-19, video on demand (VOD) has taken over. Trolls World Tour, The Invisible Man, and countless other would-be theatrical release went ‘direct to VOD’ as theaters closed their doors. Not only were viewers able to skip a trip to the box office or Redbox kiosk; they were able to stream these movies at their convenience rather than as dictated by static showtimes.
What Is VOD Streaming?
In essence, VOD is just that: the ability to click and play video content without the constraints of a broadcasting schedule or requiring a physical copy of what you’re viewing (as with DVDs or Blu-ray Disks). Today, VOD almost exclusively refers to content that’s distributed to viewers via streaming on internet-connected devices. However, downloaded files and recorded DVR content can also fall into this category.
YouTube’s David After Dentist and Netflix’s Stranger Things are both prime examples of VOD content — the former being AVOD and the latter SVOD. Even so, VOD isn’t restricted to the media and entertainment industry. Doctors-in-training now rely on VOD streams of surgeries to further their education, while enterprises leverage on-demand streaming for everything from employee training to customer education.
The Blurry Lines Between OTT and VOD
VOD is not synonymous with OTT (over-the-top) — even if the platforms pictured above can be classified as either.
- Over-the-top (OTT) broadcasting describes media content delivered over the internet rather than via traditional cable and satellite services. Top players in the OTT space include Netflix, Disney+, Amazon Prime, Hulu, and Sling. Internet radio and VoIP services like WhatsApp also count as OTT because they bypass traditional broadcasting alternatives.
- VOD, as detailed above, is any video content that starts when you push play — without requiring a physical DVD and player to initiate the process.
In many cases, VOD and OTT overlap, but not always. That’s because OTT describes the distribution model (video content delivered over the internet), whereas VOD describes the consumption model (video content that can be played back on demand). What’s more, OTT deals with consumer-facing media services, while VOD spans all industries and sectors. Finally, VOD is never live, which we’ll explore further in the next section.
- On-demand content distributed via a cable or satellite service (such as Xfinity On Demand)
- Prerecorded video used in enterprise settings (employee training, corporate communications, customer resources, and more)
- Live streaming broadcasts (such as online sports or live news)
- Scheduled programming delivered via streaming (such as a channel accessed on Sling TV)
VOD and OTT
- On-demand streaming content delivered by a cable alternative (Netflix, YouTube, the list goes on)
Live Streaming vs. VOD
Because VOD content can be played whenever the viewer chooses, it’s never live. Rather, VOD describes prerecorded content that internet-connected users can stream by request. That’s not to say that live streams can’t become VOD. And when it comes to monetization, recording live streams for additional broadcast opportunities is crucial.
Live-to-VOD services enable broadcasters to repurpose content and expand their audience as soon as the live event has ended. What’s more, VOD assets put the customer in control of their viewing experience — something we’ve all come to expect — with the ability to instantly, play, pause, and rewind the recording.
Live content can also become VOD content with nDVR technology. Sports fans often review game-changing plays during cable broadcasts, so why not provide your end users the same freedom when viewing your live streams? nDVR lets users to record a live stream while simultaneously playing, pausing, resuming, and rewinding the recorded stream
Monetization Models for VOD
Whether you’re redistributing a recorded event or releasing a movie directly to consumers, several strategies can be used to boost revenue using VOD. Let’s take a look at the most common models VOD offers for converting content into cash.
Subscription Video on Demand (SVOD)
SVOD stands for subscription video on demand, which includes any VOD service that provides unlimited access for a recurring fee.
Viewers elect to pay for subscription-based video due to the quality of content that services like HBO Go deliver, the freedom from commercial interruptions, and the ability to watch it outside of any schedule.
Services like Netflix have championed the SVOD model, where content access is restricted to subscribers — thereby ensuring recurring business revenue regardless of how much VOD content is streamed.
Ad-Based Video on Demand (AVOD)
AVOD stands for ad-based video on demand, which looks the most like traditional TV broadcasting in that it uses commercials and other advertising techniques to generate revenue.
Ad-supported VOD is the dominant model across the Asia-Pacific region. And unlike with traditional TV — where the content and ads come packaged together — internet streaming opens opportunities for user-specific advertisements based on the demographics of an individual viewer.
With so many streaming services now available, experts predict that ad-supported video will make a comeback, forcing Netflix and other OTT platforms to rethink their subscription-based monetization model. Consumers will likely grow frustrated with having to pay for multiple streaming subscriptions and select both free and hybrid services that balance subscription- and ad-generated revenue.
Transaction Video on Demand (TVOD)
TVOD stands for transactional video on demand, which describes pay-per-view streaming content that viewers access on an ad-hoc basis. To throw another acronym in the mix, TVOD is often reserved for PVOD, or premium video on demand. PVOD content includes highly anticipated boxing fights and cinematic releases.
While transactional video on demand is by far the least common, the recent global health crisis has shone the spotlight on it. A large percentage of the direct-to-VOD movie releases making headlines in 2020 are available behind a paywall as a one-time purchase.
Regardless of the monetization model, we designed our software, services, and hardware to make live and VOD streaming work for your business. Wowza powers reliable video delivery for market leaders in industries ranging from media to healthcare. And by offering a full-service platform and customized solutions, we work with each customer to ensure their success.