Video-on-Demand (VOD) Monetization: Make the Most of Your Content

Whether you’re striving to be the next Disney+ or you’re just looking for additional revenue streams for your business, video-on-demand (VOD) streaming could be the ticket. It allows you to warehouse custom and/or licensed video content for distribution to viewers. In addition to providing you with a new revenue stream, it can help build brand awareness and promote thought leadership, thereby also serving as a demand generation tool. 

But before you can get started, you need to understand the various VOD monetization models available to you and how they can specifically benefit your business. In this article, we’ll break down the benefits of the most common VOD monetization models complete with examples of how each of these models could serve a range of industries. 

   

VOD By the Numbers

There is money in VOD streaming. That much is clear. VOD market revenue is projected reach about $231.50 billion in 2027, showing an annual growth rate of nearly 10%. While much of this revenue is generated by the heaviest hitters, namely Netflix, Hulu, Amazon Prime, and the like, the fact remains that as the VOD market grows, their pieces of the pie may be shrinking. Statista analysts note that they are facing stiff competition despite a marked increase in VOD viewers given the growing number of specialized VOD and OTT platforms. 

But take heart; that doesn’t mean your VOD service is doomed to be drowned out. You’re already making valuable content in your blog, on your socials, and more. You’ve already been told how much your target audience responds to video as a means of consuming information, what with online video making up some 80+% of all web traffic. Now make that content easy to find and even easier to pay for. 

 

SVOD

Subscription Video-on-Demand (SVOD) is a VOD monetization model where users pay a recurring fee for access to a library of content. This model does not require users to watch ads or otherwise purchase content. Netflix is the quintessential example of this model in action.

Benefits of SVOD

SVOD’s key benefit is consistency. By making it easy to start and maintain a subscription, this is the quickest way to a predictable revenue stream.

• Reliable Income: SVOD provides a steady and predictable income stream for content creators and platforms. Users pay a recurring fee at predictable intervals, ensuring a consistent revenue stream.
• Customer Loyalty: This same consistency benefits customers as well, who know what to expect and exactly what it will cost. It also reduces the number of decision-making instances. In other words, when deciding to purchase videos a la carte, viewers have many opportunities to change their minds or explore other options. When faced with an annual charge, they only need to say yes once to pay for a year’s worth of content.
• Exclusive Content: Think Netflix originals. SVOD platforms can easily mix exclusive content with licensed content under the same subscription umbrella, giving them a competitive advantage over other platforms. 
• Flexible Content Consumption: When everything is already paid for, it’s easy to streamline content consumption, allowing users to view content on whatever device and at whatever time they choose. 
• Personalized Recommendations: As with other VOD monetization models, SVOD platforms often use algorithms to curate content for their audiences by providing personalized recommendations based on their watch history.

Examples of SVOD Across Industries

But what if you’re not looking to become the next Netflix? In fact, you’re not in the “general entertainment” business at all. How can you still benefit from this sort of revenue stream?

Education

Higher and ongoing education offer opportunities for subscription-based access to VOD content. LinkedIn, for example, offers access to their library of training videos with the cost of a premium membership. However, educational VOD content doesn’t have to be an add on to a larger service. In fact, subscription-based VOD education is growing in popularity as a more student-centered educational experience.

Faith-Based Organizations

Video streaming isn’t just for mega-churches. More and more faith-based organizations are adopting live and on-demand video as a means of reaching and connecting community members, especially in the wake of the pandemic. For a small subscription fee, members of the community can view pre-recorded services, study sessions, and other faith-oriented resources.

Other Nonprofits

Many nonprofits, like explore.org, use live and pre-recorded content to generate awareness for various causes. Those same organizations could use donated and curated content on a subscription basis to continue efforts to raise funds. 

   

TVOD

Transactional video-on-demand (TVOD) prompts viewers to pay for specific content on a pay-per-view basis. Sometimes, this is a one-time payment for unlimited access to the content in question. At other times, viewers may only have access to the content for a specific window. Think renting vs. buying movies on Amazon Prime. 

Benefits of TVOD

TVOD’s key benefit is maximization. More than any other model here, it allows you to structure payment options to get the greatest ROI.

• Revenue Maximization: TVOD allows content creators and publishers to charge viewers more incrementally for accessing specific content. This enables them to maximize earnings from higher value content by charging more for that specific content. This transactional approach to purchases is also well known for resulting in more money spent on average by viewers.
• Revenue Flexibility: Publishers can take advantage of FOMO through promotional deals and exclusive or early access to content. They can also pick and choose what content to offer for free in order to entice viewers onto their platform. This flexibility also benefits the viewer who can pay for the experience they want on a one-off basis instead of committing to a subscription. 
• More In-Demand Access: Organizations that charge for access to specific content can typically afford to license more in-demand content. Basically, they can charge more for content that it costs them more to make available. That’s how organizations like Amazon Prime are able to provide early access to new releases while platforms like Netflix tend to license them after the hype has died down and they’re less costly. 
• Complimentary to Other Models: It’s easy to layer TVOD onto other VOD monetization models. It’s flexible and provides opportunity to target specific content while leaving other content to other methods.

Examples of TVOD Across Industries

Non-entertainment focused organizations can benefit from this model as well. In fact, we see it already on websites geared toward on-going education and professional development. 

Professional Development 

This goes hand in hand with education. You could pay a flat fee for unlimited access to training content or, as is the case with companies like Udemy, you could pay a la carte for the courses that most interest you. Many such organizations find this to be an effective way to make money off of viewers who may only be interested in a single course. 

Live Events

Wait, aren’t we talking about prerecorded video? The reality is that live events are well suited to this sort of payment model because you can capitalize on them twice over. Imagine charging a fee for access to a live event stream (think live pay-per-view). Later you repurpose that stream as a VOD asset whereby you charge a smaller fee for those looking to view after the fact.

 

AVOD

Advertising-based video-on-demand (AVOD) drives revenue by selling space to advertisers on the platform while allowing viewers to access the content for free. In this model, more valuable ad space may be connected with higher demand content. Examples of this model include Hulu, which has in the past offered free content to viewers with ad breaks, and YouTube, which attaches ads to videos according to a range of factors, including video popularity. 

Benefits of AVOD

AVOD’s primary benefits is also it’s primary disadvantage, depending on your audience. After all, viewers will be happy not to have to pay themselves. However, many viewers may also be put off by the ads interrupting their experience.

• Competitive Revenue: AVOD makes competition work in your favor. Basically, if you are charging your viewers to access content, then you need to compete with other platforms to offer the best deal and/or experience. This could drive prices down. On the other hand, companies vying for ad space on your platform could drive prices on their end up. 
• Viewer Advantages: Entice more viewers to your platform by offering a free-for-them experience. They just need to be ok with the ads that make such an experience possible. 

Examples of AVOD Across Industries

This is a particularly useful model when the experience is less effected by the presence of ads and for those looking to serve a community that may not have the means to pay.

Sports 

Many sports are already beset by frequent interruptions what with penalties, time outs, and more. It would be easier to provide a free viewer experience where the ads are minimally disruptive, as opposed to a feature film. It also wouldn’t be too difficult to find advertisers willing to shell out for a spot on a sports broadcast given the wide array of viewers. 

Government

Whether talking about government hearings and debates that you want to make available to the public or mandated trainings for people seeking specific licenses, AVOD makes it easy to bring down your own costs without passing those costs on to the general public. 

   

Hybrid VOD Monetization Options

Wait a second, I pay a monthly subscription for my Hulu account and yet still see ads when I watch my favorite shows. Why is that?

While the VOD monetization models listed above serve as standard frameworks for how a content creator or publisher could monetize the content, many popular services opt for some combination of options. They may offer different tiers of subscriptions, the more expensive ones promising an ad-free experience. They may provide mostly unlimited access to their content library except for premium content that is available for rent or purchase behind a paywall. 

However, companies choose to structure their hybrid model, there is some risk of frustrating the customer. After all, Netflix set a strong standard of unlimited library access for a single monthly fee. When customers are faced with additional requests to pay on top of their existing fees, they may feel they’re not getting their money’s worth. 

Benefits of Hybrid

Hybrid VOD monetization is all about flexibility. The more flexible your monetization options, the better able you’ll be to maximize ROI, including offsetting the costs of premium content with additional paywalls. 

Examples of Hybrid VOD Monetization Across Industries

Put simply, any company that sees benefit from any of the above models, could just as easily benefit from a mix-and-match approach. Consider the specific needs of your customers, the type of content you’re making available, and how much you need to make for a decent ROI. 

 

Live-to-VOD

Sometimes you want your content to be live, whether because the live nature of the event is part of the appeal or because you want to generate a sense of urgency or exclusivity with your audience. However, ephemeral content has, by its very nature, no lasting value. That is unless you record that content and repurpose it. Live-to-VOD is a relatively low-cost way of stretching the value of live content by making it available for on-demand viewing after the fact. Sure, it may have lost some of its luster, but people who missed the event may still want to view it and the content is otherwise gathering dust in a server somewhere (or gone forever). 

Benefits of Live-to-VOD

Live-to-VOD is the best of both worlds. You can take advantage of the urgency that comes along with an exclusive live experience and repurpose that content in whole or in part. After all, content costs time and money to make. Why would you waste it?

• Positive Viewer Experience: If people are on your platform, they want to see your content. Viewers respond positively to flexibility and accommodation. 
• Maximize ROI: Content is content, regardless of whether it’s a highly produced evergreen video, raw live footage, or something in between. Don’t let it gather dust if there’s a chance someone will still want to view it.

Examples of Live-to-VOD Usage Across Industries 

Any live streaming use case could include a VOD component. Live streams of university lectures could be made accessible after the fact for those looking to review material (or for a fee). The same could be said for live stream conference webinars, sporting or music events, and more. 

 

Explore VOD Monetization With Wowza

No matter your VOD use case or monetization goals, Wowza can help. 

Our Wowza Video cloud-based platform is known for providing fast, reliable, and scalable live streams. However, it can also be the foundation for your VOD needs. Our content management system (CMS) allows you to record your videos, save them, organize them, and make them available for playback. Wowza Video also comes with a suite of features, including end-to-end analytics and a best-in-class online video player to help you optimize your audience’s experience. If your needs are more particular, our highly customizable Wowza Streaming Engine software can integrate seamlessly with your existing infrastructure. 

So with more and more companies jumping on the VOD bandwagon, what’s your next move? 

• I have more questions
• I’d like to test Wowza out
• I’m ready to start!

Happy streaming!