What is Video on Demand (VOD)?

VOD or video on demand is here to stay— like SVOD, TVOD, AVOD, and PVOD— and as such it is a concept we should familiarize ourselves with. All of these acronyms refer to variants of VOD and are used to describe “on demand” consumption of video in the context of streaming television.

New ways of consuming television and video have led to a dramatic turnaround in the entertainment industry. With astonishing speed, we have witnessed a paradigm shift in the way audiovisual content is produced, sold, distributed and consumed. This new focus has seen an increase in the delivery of services over the Internet, disintermediating the TV service provider. This approach is also known as over-the-top (OTT) or “cord cutting.”

What is VOD Video On Demand? Types: SVOD, TVOD, AVOD

What is Video on Demand (VOD)?

VOD explained

To fully understand this change and the variants of this new business model, the logical place to start is defining what VOD is.

As previously stated, VOD stands for video on demand. With this model, the streaming service user can choose when, where, and what to watch. This is an important change because it involves a disconnection—or disintermediation—from traditional linear (real time) broadcasting.

It should be clarified that VOD is used to refer both to the type of transmission method and to online video services in general. SVOD, TVOD, AVOD, and PVOD are VOD variants conceived out of the need to make the service profitable. Thus, the distinction between the different flavors is based on how the service generates revenue.


Types of VOD

SVOD (Subscription Video on Demand): This is a streaming television model based on subscriptions. It is based on a contract that guarantees unlimited access to the content offered on the platform. The obvious example of SVOD is Netflix.

TVOD (Transactional Video on Demand): If SVOD is the “open bar,” this model is the “cash bar.” Normally, a TVOD service does not charge the user to open an account, rather it charges its customers for the content they view. To better conceptualize the TVOD model, imagine it to be an online video store where customers only pay for what they watch.

AVOD (Advertising Video on Demand).  This is a “free” audiovisual content consumption model. AVOD does not “cost the user” because it is funded through advertising: the cost to the user is the time they have to dedicate watching ads. An example of this model would be YouTube or more precisely Spotify, if Spotify offered the ‘visual’ in audiovisual.


How to create a strategy for your business?

Understanding how these OTT business models work will help you define the strategy that best suits your brand and how you want your customers to access the content you offer.

Do you want massive reach, without restrictions? Then perhaps the best model for your company is an AVOD approach. Do you want exclusivity, creating a loyal audience that subscribes to your content? In this case, the best solution is an SVOD platform implementation. Do you think customers would prefer to pay for content on a “pay as you use” basis? If so, you should consider a TVOD model.

Although VOD refers to video on demand, it can also be applied to the streaming of live content such as concerts, conferences, or sporting events. Some platforms even combine more than one access model so customers can choose the format that best fits their needs.

Hulu is a good example. It allows its users to access non-premium content by only registering with the service in exchange for advertising (AVOD) but it also offers a subscription for customers who want to access premium and ad-free Content (SVOD).

Regardless, the most important elements of a video service are (a) quality content that is (b) accessible on any device and (c) that you provide personalized support, answering questions and resolving issues 24 hours a day and the most important: personalization (d), offer your users what they really want to watch!