Picking a video on-demand platform is one thing, but you’ll need to choose the best video monetization model for your business too. We’ve broken down the simplest and quickest ways to pick the best revenue model in 2022.  

Remember when video killed the radio star? Well, today, video on-demand has killed the cable TV star. We had decades of television being the ultimate entertainment star. I’m sure you remember waiting every Wednesday at 7 PM for that famous show and then chatting about it with your friends the day after. 

But waiting for a weekly show, aerobics lesson, or concert on television is long gone. (If you prefer that, there’s always cable TV). But for the most part, people have adapted to watching TV shows and movies as and when they please – thanks to video on-demand platform providers. 

The wonderful thing about on-demand video streaming is that it is so popular among the masses. If you look at the graph below from Statista, you’ll see that the video on-demand segment is expected to reach $38.03 billion this year. Video on-demand is also more popular than pay-per-view and video downloads by miles. 

So, if you’re considering teaching or entertaining via an on-demand video streaming platform, you’re on the right track. The demand is there, so why not fulfill the need? 

But there are a few steps you’ll need to take before streaming and selling content online. Firstly, you’ll need to choose one of the premium video on-demand platforms out there. Secondly, select your preferred monetization model. This can be tricky, as there are a few available (you may have heard or seen them by their acronyms like SVOD), and they each have varied benefits to offer. 

That said, in this post, we’ve collated all the VOD monetization models available and broken down each of their pricing models and benefits, so you can choose the ideal solution for your business. 

What is VOD? 

VOD stands for video on-demand. It is a way in which people are able to consume video content via the internet. VOD is also content that is streamed online directly, without the need for a cable box (like the box you need to watch cable TV). Users need an account to access the content, and content is housed in a digital library. 

Video on-demand is so popular because it is the best way to gain access to audiences and expand your community of consumers. Video on-demand platforms also allow you to monetize your content and give you the necessary operational and marketing tools needed to run your business. 

White label video on demand platforms is really excellent because they let you brand your website with your own color schemes and imagery – so the VOD platform looks like your own and sends the right message to your audience. 

VOD works well for entertainment streaming (think Netflix and Hulu), but it is also great for teachers, educators, fitness instructors, entertainers, or entrepreneurs hosting virtual events. 

What to look for When Choosing a Video On-Demand Platform Provider 

Before you choose one of the premium video on demand platforms available to you, there are a few things to consider. We’ve got a list of the top ten things to look for when choosing a VOD streaming platform. In addition, you can ask yourself these five questions: 

  1. Does the platform allow you to host unlimited content?
  2. Can you monetize your content through the VOD platform?
  3. Does it allow you to live stream to your audience?
  4. Can your audience stream on multiple device types? 
  5. Can you manage additional elements of your business, like marketing, through the platform? 

As you can see, VOD platforms give you the ability to host and provide content to consumers, but the best video on-demand platforms help you monetize, market, and manage your business within one place. 

SVOD, TVOD, AVOD : The Different VOD Models Broken Down

SVOD – Subscription Video on Demand 

SVOD, or subscription video on demand, is a service where a consumer pays a recurring (monthly or annually are most common) fee to access a business’s entire content library and consume it as they please. This type of monetization is often preferred as it gives the consumer the power to watch content when they want, where they want. 

SVOD is used by many large enterprises today. Think of Amazon Prime, Netflix, and Hulu as some of them. Streaming unlimited content for a recurring fee is also favored by many because the business can depend on recurring revenue on a month-to-month basis. As an entrepreneur, it’s important to be able to predict your income for the forthcoming months. This allows you to plan for marketing efforts and budget accordingly. SVOD enables you to do this very meticulously if you’re able to retain your consumers for the long term.  

Benefits of SVOD

  • Gives consumers the flexibility to watch anything they want for a small fee. 
  • Engages the audience for a longer period of time.
  • Allows instructors and educators to create and sell original and exclusive content. 
  • Tends to provide predictable and steady revenue streams for entrepreneurs and instructors.  

SVOD Pricing – How it Works

This monetization model is priced monthly or annually to a consumer as a recurring fee. Often, the subscription is discounted for the first month. This marketing tactic is designed to entice consumers and lower their barrier to entry when it comes to signing up for a service. 

Alternatively, creators offer a free trial to consumers. This trial is usually between seven and thirty days, depending on the type of content being sold. For example, a fitness instructor may offer a thirty-day trial so the audience can view more than one lesson for free. In contrast, an entertainment business will only offer seven days free as they provide mostly movie, TV show, and event content).

Some businesses also choose to offer “freemium” versions. This is where a consumer can sample free content for an unlimited time, but they have less access than a full paid subscription would offer. 

TVOD – Transactional Video on Demand 

TVOD is where a consumer is able to buy your content on a pay-per-view basis. This is often referred to as the monetization model, which is almost directly opposite to SVOD. It’s a very piece-meal style of monetization, where you pay for one video and gain access to just that video. 

If someone purchases TVOD videos, they have a few options. Videos can be sold on their own (this is frequently done for movies or beginner lessons) or in a series of episodes. TVOD is regularly used for software such as Apple iTunes. 

Benefits of TVOD

  • Gives entrepreneurs the opportunity to provide well-timed content to their audience. 
  • Allows consumers to pick and pay for precisely what they want. 
  • Provides renting and purchasing options for consumers. 

TVOD Pricing – How it Works

Consumers can rent or purchase to own content. If the content is purchased, in most cases, the audience is able to download the video and have lifetime access to it. If the video is rented, usually it is available for a limited number of days (think back to when you used to rent a VHS or DVD at a rental store – same concept, just digital). Videos are priced and charged at a fixed rate and are generally rather low in price. 

AVOD – Advertising-Based Video on Demand 

AVOD or ad-based video on-demand is exactly as the name says. It is free to consumers, and they will be served your advertisements while they’re watching their desired channel. Think of it as something very similar to broadcast television, where you’d watch the news, a TV show, or a movie and see ads in between it. 

Before choosing this model, it’s important to understand that there is a rather complex process that happens with AVOD. You will need to connect with potential advertisers but also set up elements like ad podding and video header bidding. It’s quite an involved process and is quite hands-on, even if consumers see your content for free. 

AVOD works well for some entities as it helps them offset hosting and production costs with advertising revenue. The most common places where you’ll be able to see AVOD in action are through YouTube or DailyMotion. 

Benefits of AVOD

  • Allows consumers to see unlimited content for free, giving your brand good exposure. 
  • Helps you build a large following. 
  • Broadens your audience as your content can be accessed anywhere by anyone. 

AVOD Pricing – How it Works

As mentioned above, AVOD is free to people viewing your ad on a platform such as YouTube. It can be meshed as a hybrid model with SVOD, which is offered at a reduced monthly membership fee (an example of this would be Hulu ads). 

Hybrid Model 

The hybrid model sounds generic, but it is a solution that encompasses two or more of the above monetization models for a business. Here’s how it works: 

Let’s say you’re a fitness instructor looking to sell your fitness content courses and live classes online. Your subscription video on-demand platform helps you set up a monthly fee for members, which gives them access to your weekly live classes (this uses the SVOD model). But you have also created on-demand beginner courses for Pilates. These courses are offered for a once-off fee (TVOD) and are accessed once a user makes the payment. This course, which contains three videos, is available for download and can be kept by the consumer forever.

Some of the most premium video on-demand platforms allow creators to have advanced monetization models beyond video. That’s right, you can sell digital, and sometimes, even physical products on your VOD platform. 

As you can see, there is power in having a hybrid model in place. All you need to do is ensure that you have content planned out for more than one video monetization model, and you’re good to go! 

Which is the Best Monetization Model for Your Video On-Demand Platform? 

As you can see, there is no single solution that stands out from the next. The right video monetization model depends on your video on-demand platform, the nature of your business, the type of content you plan on selling, and your business objectives. 

Let’s look at it from this angle – if you’re an entrepreneur who wants to focus on live streaming your classes and scheduling specific bookings in your week for these sessions – then SVOD is your best option. It’s low operations with no need to create additional on-demand content (although that’s always a bonus for members). 

On the other hand, if you prefer to create “offline” videos that will be housed in your digital library, and you want your audience to purchase and consume the content at their own pace, then TVOD is a better option. 

It’s clear to see that you need to choose what is best for you based on your business needs and your availability. 

If it were up to us, we’d call SVOD or the hybrid model the best video monetization model for your video on-demand platform. These both give you flexibility in your schedule, recurring revenue, and generally attract consumers for a longer term. If you can marry SVOD with a few once-off TVOD content pieces and back that up with some digital guides and physical apparel available for sale on your site, you’ll have multiple revenue streams constantly running. Great, right? 

Give SVOD a Try with Mastera: A First-Class Video on Demand Platform   

If you’re looking for premium video on-demand platforms, consider chatting to our team at Mastera. We have a platform that can handle multiple monetization models. Our platform is first and foremost a video experience platform – with all the crème de la crème features for video streaming and hosting. For example, we integrate with Zoom for all your live streaming needs. Mastera also manages your customer information, subscriptions, payments, and content. You can also measure your content performance and analyze it through our reporting feature.

All in all, Mastera is here to help you find that rhythm and spend your time teaching, entertaining and instructing online while we take care of all the mundane operational tasks. 

So, are you ready to choose the right monetization model for you and get your on-demand video streaming platform up and running? Feel free to schedule a demo with us and learn more about how we can help you get that recurring revenue going from day one.