logo
logo
Sign in

SVOD vs AVOD - Which is the Best Revenue Model For VOD?

avatar
Meryem Rai
SVOD vs AVOD - Which is the Best Revenue Model For VOD?

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 catalog 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

1. Predictable And Recurring Revenue

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

2. Better Profit Margins

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

3. 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

1. 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.

2. Vast Reach

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

3. 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.

 

To read more about SVOD vs AVOD Monetization click here

collect
0
avatar
Meryem Rai
guide
Zupyak is the world’s largest content marketing community, with over 400 000 members and 3 million articles. Explore and get your content discovered.
Read more