What are the Benefits of TVOD and When Should You Use it?

By The Zype Team on August 17, 2022

TVOD: What Are its Benefits and When Should You Use it?

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. 

usa pay tv subscribers

Image via Digital TV News

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. 

What is TVOD?

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.

Types of TVOD

Typically, publishers can use one of the following TVOD models:

  • Pay-per-view (PPV): Requires users to pay a one-time fee to watch an event, such as a football match or concert.
  • Electronic sell-through (ETR): Involves giving users lifetime ownership of a content asset.
  • Download to rent (DTR): Allows users access to the content for a limited period.

Should You Use TVOD?

Before we delve deeper into the TVOD vs. SVOD and AVOD debate, let’s explore the benefits of TVOD and drawbacks.

Benefits of TVOD

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.

bar graph of tvod market segment

Image via Statista

TVOD vs. SVOD and AVOD

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.

line graph of TVOD users

Image via Statista

Moreover, limited access to new releases minimizes the risk of piracy and lets you control distribution better.

Drawbacks of TVOD

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.

Final Verdict: How and When to Use TVOD?

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.

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