The ins and outs of VoD streaming

Video on demand (VoD) has long ago ceased to be something extraordinary. With the coming of the COVID pandemics, online video content has become within everyone’s reach and use, and the findings from Statista are clear proof.

Viewers across the world spend much time watching content on various VoD platforms across screens, which results in increased revenue for video-on-demand providers. To wit, in 2021, the global revenue for VoD reached $86 billion, and by 2026, this amount is expected to exceed $135 billion. Netflix alone received 4.4 million new subscribers in the third quarter of 2021, reaching the total amount of 214 million regular viewers.

If these stunning stats have not convinced you to launch your own platform yet, the rest of the article will do. We’ll walk you through various VoD platform solution options and explain why you might need to go for a custom one. Read on to go deep into what exactly VoD is and how you can drive revenue from it.

What is VoD and why it’s hot right now

Video on demand is a media distribution platform that relies on the internet to deliver recorded content. This independence from cable or satellite connections like traditional broadcast television gives spectators the control over What, When, Where, and How they watch video.

Namely, as VoD doesn’t rely on a set schedule as the television, viewers can play their favorite movies or shows whenever they want and from devices they want, including smartphones, smart TVs, tablets, and PCs. They can decide how they consume content — by pausing, restarting, putting captions, changing the language, fast forwarding, and more.

Another reason that makes users opt for on-demand video is live-to-VoD. This feature presupposes saving any live stream and making it available for on-demand playback after it ends.

In other words, with VoD, users can make sure they won’t miss anything important. Moreover, such empowerment drives audience growth, satisfaction, and engagement.

Monetization: Four models to choose from

On-demand video can bring substantial revenue because you can use various business models to monetize it.

Ad-based monetization

AVOD — ad-powered video on demand — is a model that presupposes serving multimedia for free and getting revenue through ads like banners, video commercials, or sponsored content. This model is about growing the user base and making money right here and right now, which makes it the optimal choice for those who are on their way of launching a VoD service.

Some VoD businesses take it up a notch with ML-fueled ad placement. This means analyzing the context as well as user preferences to insert relevant ads and making them less intrusive — for enhanced viewer experiences.

Subscription-powered advertising

Probably the most popular monetization model, subscription video on demand (SVOD) exempts viewers from ads, but asks for a monthly payment in return. For a bit of context, YouTube Premium, Netflix, Apple TV+, and HBO are all great examples of subscription-based content distribution.

With so many OTT giants on the VoD market, new-coming businesses might have problems with enticing and retaining new subscribers. This makes it a necessity to create coherent viewer retention strategies that might include video exclusivity, loyalty plans, and various pricing options.

Moreover, if you want your SVOD platform to be a success, you should provide high-quality content on a regular basis as well as tailor video to niche groups for increased customer satisfaction.

Transaction-based model

Transactional video on demand (TVOD), also known as pay-per-view or pay-per-download, allows users to buy or rent a particular video for a set price. The examples of such services include iTunes, Sky Box Office, and CinemaNow.

The TVOD business model guarantees ad-free experiences for viewers and immediate income due to instant payments. However, although immediate, such revenue streams may not be regular and steady.

Hybrid models

To add more flexibility to your VoD service and smoothly accommodate different user demands, you can use a hybrid model. To wit, you can provide part of content on an AVOD basis and deliver premium content through subscriptions. Or, combine subscription packages with transactions — depending on the type of video you deliver.

VoD development dilemma: Ready-made or custom?

In today’s video-powered world, virtually any VoD business can grow and drive new revenue opportunities — especially considering the fact that there are many ready-made VoD platforms you can use to kick-start your service.

However, mind the fact that every white-label VoD solution has its own limitations. For example, Wowza lacks monetization and analytics capabilities, Brightcove has limited reporting, Muvi has no visual theme editor, etc. Moreover, many ready-made platforms are difficult to customize. These cons really matter if you want to fully address audience needs in a particular niche.

Not to get by with half-baked features, you can build your own video-on-demand platform from the ground up. Of course, it will cost you a good deal of money, but such an investment will surely give you more bang for your buck, and here’s why:

• Security. In a custom solution, you can pay particular attention to rock-solid security to better protect your premium content from piracy and your viewers — from data leakage. Two-factor authentication, data encryption, single sign-on, role-based access control, DRM support, dynamic watermarks, you control how you safeguard your VoD platform
• Scalability and performance. Stellar viewing experiences for a million-wide audience are not a novelty for a tailored solution with a robust architecture, multi-CDN setups, and real-time video quality control
• Flexible monetization. You can tailor your system to specific business needs and monetize your content the way you want — whether using a single pricing model or combining multiple options
• Advanced functionality. Off-the-shelf solutions have a particular set of features. If you want to go the whole hog in a try to exceed user expectations, you’ll need custom features like ML-fueled personalization, data-rich analytics, or 360° video

Conclusion

No matter how saturated the online video arena is, there’s always room for competition. All the above-mentioned advantages and benefits confirm this idea. However, consider the fact that when starting a new business, you’ll need to thoughtfully analyze the market, identify your business needs, and build a comprehensive strategy considering all risks.