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What is VOD and Why is it Important for Your Business

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Meryem Rai
What is VOD and Why is it Important for Your Business

 

Video on Demand is a video streaming business model that is fast evolving in the current marketplace. Read on to find out what VOD is, how it works, types of VOD monetization, the importance of VOD for businesses, and how to get started with your own VOD platform.

VOD (Video on Demand) is the present and future of the broadcasting industry. A report by Conviva suggests that video on demand is viewing up 155% year-by-year with an average of 17.1 minutes spent per session. 

A recent survey by Hubspot revealed that people prefer video overall & other forms of content including infographics, blog posts, and emails. 

What Is Video On Demand?

Video on Demand is an interactive system of accessing content. VOD allows viewers to watch a video from a content library instantly on their TV, personal computer, mobile phone, or any other device. 

The VOD service is offered by the means of a cable, telephone provider, or broadband and provides viewers with the option to pause, play, rewind, or fast forward the video as per their wish.

How VOD Works?

To deliver a video on demand, the video is first converted into a digital format and stored on a video server. It is then compressed and transmitted to the viewer via broadband or cable. 

After reaching its destination, the video is decoded and decompressed via a set-top box and stored on a video server in the viewer’s device. The viewer can then watch the video instantly with the ability to control its speed and other (play, stop) features.

Different Types Of VOD Models To Choose 

The success of a VOD business depends on the content strategy and monetization model chosen. 

With the right revenue generation method, one can achieve their monetary goals along with building and popularizing their brand. 

Here are the top three VOD monetization model to earn revenue from your offerings:

1. TVOD Or Transactional VOD

The transactional video on demand is based on a pay-per-view monetization model and best suited for the most popular videos with small video libraries. Here, the viewers purchase the specific content they want to watch. 

The TVOD business model is further divided into two categories – EST (Electronic Sell Through), where the viewers get permanent access to the content on a one-time payment, and DTR (Download to Rent), where they have to pay a smaller fee to access the content for a scheduled period of time. Examples of TVOD monetization models are Google Play, iTunes, etc.

2. SVOD Or Subscription VOD

The subscription video on demand is the most popular monetization model for varied content creators in order to broadcast with large video libraries. Here, the viewers subscribe to a video service for a certain period of time (weekly, monthly, yearly) to access its content. 

Once the viewers pay the subscription, they are eligible to surf unlimited content on their online video library. The subscription plans are auto-renewal and can be canceled at any time by the viewers. Examples of SVOD business models are Netflix, Hulu, Amazon Prime, etc.

3. AVOD Or Advertising VOD

The advertising video on demand is another popular monetization model that uses ads for earning revenues. Here, the viewers can stream the content for free but are stressed to watch inserted ads as well. 

The VOD ads are classified into three categories: – Pre-roll (plays at the beginning), Mid-roll (plays in the middle), and Post-roll (plays at the end). The AVOD business model generates a good amount of revenue that gives a large viewer base. Examples of AVOD monetization models are YouTube, Daily Motion, etc.

To read more about the VOD platform follow the link. 

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