Home » The Complete Guide On OTT VOD Services

The Complete Guide On OTT VOD Services

by janeausten
video on demand platform

People now have countless options for using social media, ranging from social networking sites like Facebook, Instagram, and Twitter to Video on Demand (VoD) services, thanks to the increasing popularity of the internet. VoD, also known as interactive TV technology, is a type of media distribution system that allows users/subscribers to view/listen to video or audio content in real-time or to download and watch programs at their convenience.

Did you know that viewing videos accounts for around 33% of all online activity? Given the popularity of online video, several creators have chosen to use it as a medium to interact with their audiences.

Video on demand (VOD) is a popular type of video content where creators are turning to expand their online presence.

This blog will go over everything creators need to know about VOD streaming. So, without much delay, let’s get started!

What Is VOD Streaming?

VOD Streaming, also known as Video on Demand Streaming, is a way for users to consume video via subscriptions, rentals, and/or purchases. Unlike conventional television, which urges viewers to consume content regularly, VOD allows users to watch videos on their own time and platform.

Vod streaming platforms include OTT services like Netflix, Amazon Prime, and Hulu. People who pay for these services can get access to hundreds of TV shows in exchange for a monthly subscription fee.

Unlike YouTube, which depends primarily on an advertising-based video on demand (AVOD) model, VOD online streaming generally provides content creators with several monetization options like AVOD, TVOD, and SVOD.

The Major Challenges of Delivering AVOD / SVOD / TVOD / PVOD OTT Services to Subscribers

The following are some of the challenges in delivering OTT VOD Streaming services to subscribers:

1. Increasing the Reach of Your Service to Households

The main challenge for OTT content providers is expanding the reach of OTT apps and content while remaining cost-effective in the face of the wide variation in device types, operating systems, and middleware.

According to the Conviva Q4 report, users throughout the world spend 66% of all viewing hours on the big screen, making TV unquestionably the most preferred screen. However, several set-top boxes and Smart TVs are incapable of meeting the processing and memory requirements of OTT applications; enabling apps on these devices generally requires the purchase of a new set-top, a third-party OTT device, or an HTML5 app that has been back-ported to the existing device.

2. Making Your Service Available on as Many Devices as Possible

Users are constantly experimenting with new ways to access OTT content services via their remote controls. The big screen is the new “gateway” for all TV and OTT experiences, from streaming sticks/dongles to gaming consoles, smart TVs, and updated set-top boxes.

However, the growing number of devices, together with the various middleware and operating systems, puts an enormous burden on optimizing, deploying, and maintaining apps for all device types. Developers often prioritize platform choices based on the fit of their content offering to the device-using audience; subscriber acquisition and loyalty on that platform; and technologies such as DRM, advertising, and analytics.

3. Subscription and SVOD ‘Fatigue’ Management

The desire to acquire more control over watching – in terms of picking what content they want to watch, when, when, and how they want it – increased customer motivation to move from traditional PayTV services. However, as each new SVOD OTT service increases demand through its unique content offering, users are expected to pay additional membership fees – for some, these monthly fees soon climb beyond the original expenditures.

SVOD fatigue, on the other hand, does not affect all providers equally; Netflix has the most loyal member base, with 35% of the US market at the time of writing. While the business is developing, this may not be a concern for OTT providers; however, when growth slows or stops, the pain will be severe, leading to possible consolidation.

4. Standing Out From All Other Services

The demand for streaming video on demand is both vast and increasing. From the customers’ perspective, titans like Netflix and Prime have already established benchmarks for content breadth, user experience, and membership pricing. A clear point of uniqueness must exist for any possible new entrants. Therefore, an increasing proportion of viable, specialized Vod platform providers are gaining popularity, preferring more unique content curated and targeted to well-defined fan communities.

What Are the Key Monetization Trends of a VOD Service?

The trends monetizing the VOD Platform to subscribers are as follows:

Subscription Fees Continue to Exist:

According to consensus, SVOD will grow at an 11% annual rate for the foreseeable future, and with a high revenue base, it will continue to outperform AVOD and TVOD revenue. Indeed, three of the five FAANG stocks picked SVOD as their preferred model. 

It’s also worth noting that in 2017, YouTube launched ‘YouTubeTV,’ its $65 per month subscription-based, live-streaming TV service in the United States. According to estimates, the membership base has grown to more than 3 million at the time of writing. Those 3 million subscribers generate the same amount of advertising revenue as 12% of all YouTube users.

Switch of advertising budgets to Connected TV:

The shift from linear TV advertising budgets is driving a disproportionate surge in Connected TV usage (CTV). CTV advertising consists of pre-roll or in-stream adverts designed exclusively for viewing on a connected TV. It is different from the umbrella of the Video on-demand solution, which can be watched on a phone, tablet, or computer, for example. Because CTV is essentially a large-screen, it is more likely to be watched by more than one person, enhancing reach and efficiency over the VOD Platform.

Global Expansion of Footprint:

Several US-based and international media businesses have openly stated their global intentions for both SVOD and AVOD services to reach viewers worldwide. DAZN, Apple+, Netflix, Disney+, Pluto TV, Tubi TV, Paramount, and many more are restructuring and actively investing in a “World Tour” ideology.

Accelerates AVOD Service:

As SVOD grows, we’re seeing the introduction of ad-supported tiers to increase reach. While SVOD sales surpass AVOD revenues in terms of value, AVOD viewing time continues to climb. According to Nielsen, AVOD is expanding faster than SVOD in the United States, where more than 100 million people watch YouTube and YouTube TV on their TV screens each month.

Hybrid-Tiered Services:

VOD Platform Providers use three basic models to commercialize services and justify higher fees. These, however, are continually developing, and hybrid models that bridge or integrate the basic AVOD / SVOD / TVOD pillars have evolved.

Direct Access to PVOD and TVOD:

TVOD in the form of the pay-per-view has already played a part in live sporting events such as Boxing, Wrestling, and Premier-league Football (soccer). These however, saw an impact in the realm of movies. As the lingering effects of Coronavirus continues to disrupt theaters throughout the world, putting pressure on the $40B+ global box office for films, it’s expected that more major releases will go direct to TVOD/PVOD.

How Does a VOD Service Generate More Revenue?

VOD services increase revenue in three distinct ways, which are as follows:

  • VOD Services can reach more devices quicker, including hard-to-reach operator customers that you may not have previously been able to access.
  • Users can access VOD Service instantly after accessing AppCloud, without having to download and install anything.
  • VOD Service consistently outperforms other services on any device. That is, the UX is provided exactly how it was designed. As a result, it increases user adoption and engagement, resulting in more ad impressions and revenue.

It doesn’t end here; it also helps in increasing operational efficiency.

Summing Up

To sum it up, as more users cut the cord, the demand for VOD continues to rise. Also, we predict that the best VOD services will expand and diversify in the coming years. The world is currently focusing on streaming giants like Netflix and Disney, but that might soon change. So, while no one is sure what the future of VOD holds, one thing is for sure: big change is on the way. 

We hope this guide on what does vod stand for streaming was helpful. VOD is a broad topic, and this is only the beginning. If you’re serious about entering the Video on Demand industry, you can reach out to create a video streaming website.

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