The COVID-19 pandemic has transformed the way people consume video content and entertain themselves. While video on demand (VOD) services were already grabbing the spotlight, the pandemic accelerated their adoption further. Interested in more detail? Check out our comprehensive guide to video monetization for a complete look into the nuances of video monetization.
It isn’t surprising that traditional pay-TV providers lost more than 6 million subscribers each year between 2019 and 2021.
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The remarkable growth of OTT platforms has prompted many content creators and publishers to take the plunge. However, most streaming providers struggle with selecting the best monetization models for their platforms.
There are numerous monetization types like SVOD, AVOD, and TVOD. In this post, we’ll be diving into the depths of what TVOD is all about, its advantages and drawbacks, and how it compares to the other monetization models.
TVOD or transactional video on demand is a monetization model that lets content creators and publishers sell their content on a pay-per-view basis.
Unlike SVOD (subscription video on demand), TVOD doesn’t require viewers to pay a monthly or annual subscription fee. Instead, you can let them buy or rent the content they want to watch.
Popular platforms that use TVOD include Amazon’s Prime Video Store, Apple iTunes, and YouTube.
Typically, publishers can use one of the following TVOD models:
Before we delve deeper into the TVOD vs. SVOD and AVOD debate, let’s explore the benefits of TVOD and drawbacks.
TVOD is an excellent way to generate hype around new releases. It creates a sense of exclusivity and tempts viewers to pay for your content. Additionally, they can get ownership of a single content piece that they want instead of paying for a subscription that includes other content, for instance.
The latest data indicates that revenue in the TVOD segment will reach $10.42 billion in 2022. Moreover, the market volume of TVOD is projected to cross $13.54 billion by 2026.
Image via Statista
Unlike advertising-based video on demand (AVOD), TVOD gives you more control over the viewing experience. It ensures that viewers aren’t interrupted by irrelevant ads.
Additionally, they aren’t bound to specific subscription packages. Unlike subscription video on demand (SVOD), TVOD gives viewers the flexibility to pay only for the content they want to watch.
That, in turn, boosts customer satisfaction and helps you retain more viewers. It isn’t surprising that TVOD is expected to attract more than 895 million users by 2026.
Image via Statista
Moreover, limited access to new releases minimizes the risk of piracy and lets you control distribution better.
The slight catch with TVOD is that it may not help you build a long-standing relationship with viewers. They might visit your OTT platform for a specific movie or web series and never return after they watch it.
Additionally, if you’re a new content creator, viewers may not be willing to pay for exclusive access to your videos.
Instead of wondering whether you should use TVOD, it’s wiser to find a suitable way to implement it on your OTT platform.
TVOD works best when used alongside other monetization models like SVOD. You can charge a nominal subscription fee to users to let them access regular content. And you can ask them to pay extra for premium content.
It’s crucial to have a deeper understanding of your audience and determine whether they’ll be willing to pay for exclusive access to new content before going down the TVOD path.
Keep in mind that if you’re launching a new OTT service, it’ll take time before you start generating revenue through TVOD.
Looking for ways to maximize earnings from your OTT platform? Visit Zype’s Apps Creator to learn more about OTT monetization models.