21 April, 2021

SVOD Vs AVOD – Which is The Best Monetization Model For VOD Business?

The internet has revolutionized how we access video and audio content. Gone are the days of switching between TV channels; now, we’re able to choose what we want to watch from a catalogued list. The umbrella term for this is VOD (video on demand) and there are multiple revenue models for businesses to choose from if they go down this route. AVOD (Advertising Video on Demand) and SVOD (Subscription Video on Demand) are the top two.

2020 was the year of growth for AVOD in particular, as the market became more competitive, monthly costs per user dropped lower and lower, and more avenues for revenue generation were sought out. For SVOD advertising, on the other hand, the market still remains ripe as ever, with its size projected to reach USD 32.3 billion by 2025.

Here’s all you need to know about these popular OTT monetization models and what to choose for your platform.

What is SVOD (Subscription Video On Demand)?

Subscription video on demand allows users to pay a regular fee and, in return, receive unlimited access to a massive catalogue of audio or video content for that duration. This OTT video monetization model is quite similar to traditional TV packages, but the content is much more curated and can be categorized for niche industries or general audiences.

Benefits of Subscription Video On Demand Model

Predictable and Recurring Revenue

Having fixed rates per user per month or year allows OTT video platforms to maintain a stable and predictable amount of revenue each month.

Better Profit Margins

Compared to other OTT video monetization models, SVOD allows for higher profit margins with just a few thousand subscribers.

Better Customer Base

By offering subscriptions, platforms are able to maintain a better and more curated audience base than if they were to present content for free or using other OTT platform revenue models.

Choose The SVOD Platform Route if…

You want a curated customer base with predictable revenue, and would prefer to keep your platform ad-free and completely in your control.

What is AVOD (Advertising Video On Demand)?

AVOD refers to ad-based video on demand. In this OTT monetization method, video content can be accessed by users for free. However, like broadcast television, they will need to sit through targeted ads to be able to access that content, and this becomes the revenue stream for the platform owner. YouTube is by far the best known example of AVOD advertising, where the revenue from ads are used to offset the costs of production, hosting and delivery.

Benefits of Ad-supported Video On Demand Monetization Model

Unlimited Videos For Free

Users can watch as many videos as they want at a stretch without a fee, as long as they sit through the ads.

Vast Reach

Video viewing platforms have vast and diverse audiences that companies can tap into with targeted ads.

Democratic Viewership

The absence of a regular fee ensures that all video content can be accessed by anyone anywhere, and this increases the reach and popularity of your platform exponentially.

Opt For an AVOD Platform if..

You’d like to promise free video and audio content to your users without creating OTT subscription models, but also want to make steady revenues off the back of such content.

Choosing Between SVOD and AVOD

Both SVOD and advertising-supported video on demand are positive avenues for revenue generation. That said, your choice between the two would depend on your business model, and the following factors:

  • Type of content
  • Advertising landscape
  • Audience demographics
  • Content fees and licenses
  • Investments in platform and content management systems
  • Financial goals per month and year

The Importance of Choosing The Right Revenue Model

Revenue models also need to work perfectly with a multi-device, web-powered ecosystem that will be accessed by thousands of people all at once. As a result, they need to be secure and confidential and immediately unlock access for users upon payment. Delays and lags in subscription video on demand platform providers can lead to a high customer churn rate.

The perks of choosing monetization

Regardless of whether you’re finally choosing advertising video on demand or SVOD advertising, there are multiple perks that choosing monetization in general offer:

Steady Revenue: Monetization plans ensure steady revenue streams for operational and maintenance costs along with profits

Secure Content: Adding paywalls or ads ensure content is securely watched and can’t be pirated

Privacy: Subscriptions ensure exclusivity and privacy for users, who can customize their watchlist as per their discretion

Flexible Monetization: OTT providers can vary their monetization plans depending on the type of content, to keep generic content free and premium content secure.

How VOD Helps in Generating Revenues?

Firstly, the demand for video on demand is all-time high! So you’d be stepping into a very lucrative industry with the help of world’s best video on demand solution providers. Many businesses have built their brands as a top successful VOD platform, using steady revenues. This is achieved by incorporating various monetization models to fund their operations. It is flexible and scalable enough to support thousands of content pieces with millions of users at the same time.

Conclusion

Building or creating the ideal video monetization platform ensures you’re able to provide quality content to a curated set of users while also maintaining steady revenue and building your successes.

SVOD vs AVOD Monetization Model

4 Comments

  1. AvatarSivarsan Reply

    What is the revenue what I will earn through AVOD? how much will I earn approx. per one ad Video view?

  2. AvatarJoyce Reply

    Hi, This is Joyce from Tech-code Class. We have creating training videos and uploading on our site to make it accessible for everyone. After the pandemic situation, Planning to move complete digital platform. I’ll send you the requirements to build e-learning platform with subscription video on demand services. Kindly update me asap.

    Thanks
    Joyce

  3. AvatarAndrew Reply

    Looking for a solution to monetize our video content with multiple models. Both subscription & advertisement will be fine for us to target premium and free users like YouTube. Can we have a call regarding this implementation of ott video monetization strategy.

  4. AvatarStephen Reply

    Hey, We are one of the major leader in streaming industry. Currently Offering free content to the users form the vast region, Now planned to monetize our video content with perfect model. Can you please suggest us to choose profitable ott video monetization strategy for our platform.

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