What is Premium Video on Demand: A Guide

By John Yacano on July 13, 2022

What is Premium Video on Demand: A Guide

The rise of video on demand (VOD) has transformed the way people access and consume video content. Modern viewers enjoy the freedom and flexibility that VOD brings to the table. To dive deeper, read our complete guide to video content management systems.

Social distancing regulations and theater closures during the pandemic have skyrocketed the popularity of VOD further with revenues expected to touch $98.7 billion this year.

video on demand graph

Image via Statista

If you’re a content creator or publisher, you’ve likely already contemplated hopping on the VOD bandwagon with a new OTT platform. But a significant challenge that you might face is choosing the right monetization technique for your streaming service. 

While you may have heard of AVOD, SVOD, and TVOD, Premium Video on Demand (PVOD) is a relatively new monetization technique that’s quickly gaining traction. 

So, let’s take a closer look at PVOD and figure out what it is and how you can leverage it. 

Let’s get started.

What is Premium Video on Demand?

Simply put, PVOD involves giving viewers early access to newly released content in exchange for a premium fee. It’s worth noting that premium VOD is different from TVOD, which lets viewers buy or rent already released films.

PVOD creates a sense of exclusivity for blockbuster content that convinces users to pay a premium for access to the content. Additionally, the content is usually available relatively quickly after a theater release, which makes it a hot attraction. That makes it easier to generate maximum revenue from new releases.

How it Started

While PVOD isn’t a new concept, it became popular when multiplexes and single-screen theaters shut operations during the pandemic. In fact, the share of consumers who have purchased PVOD content shot up in 2021 to 33% in the US

Universal Pictures was one of the first studios to take the plunge and release ‘Trolls World Tour’ directly to OTT in 2020. Amazon Prime Video charged users $19.99 to provide a 48-hour exclusive access to the film before its widespread release. Viewers, however, didn’t get the option to purchase the film during the launch window.

Similarly, Disney decided to cancel the theatrical release of Mulan and premiered the animation film on Disney+. Viewers could get early access for a premium fee of $29.99 before it was made available to everyone after three months. It was a major hit with estimates suggesting that about 25% of Disney+ subscribers in the US opted for it.

PVOD’s popularity is expected to skyrocket further as more media houses and studios opt for direct-to-digital or dual releases. This way, they can reach a wider audience too.

Benefits of Premium Video on Demand

Let’s take a look at the benefits of PVOD.

1. Generates Buzz

The most crucial benefit of PVOD is that it helps generate a buzz about new releases. That, in turn, lures viewers and compels them to get access to your content. It creates a win-win situation for OTT service providers and content owners/creators.

2. Boosts Revenue

Most OTT platforms combine PVOD with other monetization techniques like SVOD and TVOD. This way, the current subscribers could choose to buy premium content and increase their overall spend, thus driving greater revenues in the form of increased customer lifetime value (CLV).

3. Helps Capture Non-Theater Goers

The best part about PVOD is that you can release the movies a short while after they’re released in theaters. This way, you’d be able to capture the audience that’s interested in the movie but doesn’t prefer going to the theaters.

Key Future Considerations for PVOD

While PVOD offers excellent monetization opportunities for streaming services, it’s crucial to observe how viewers’ preferences change as the pandemic subsides. As movie theaters re-open their gates, viewers have started thronging theaters once again to watch their favorite movies.

Additionally, theater chains often have exclusive distribution rights for the first few months after a film’s release. It’d be interesting to note how they respond to established studios premiering new films on OTT platforms simultaneously or right after a theater release.

Wrapping it Up

Premium video on demand has emerged as an effective monetization strategy that helps you drive up your revenues with the hype generated by new releases. Using it, you can easily capture the attention of those who are interested in the movie but want to watch it from the comfort of their homes. It's also a great way to increase your customer base and CLV. 

Are you looking to build a top-notch streaming platform to distribute and monetize your content? Schedule a demo of Zype to explore our solutions and kickstart your journey as an OTT service provider.

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