Take a deep dive into video on demand and you’ll find it is a bit of an acronym soup. From AVOD to SVOD, TVOD, and beyond, there are plenty of abbreviations for variations of video on demand. This is your inside look at TVOD.
TVOD Explained
TVOD, short for transactional video on demand, is a model used to monetize streaming video content. TVOD empowers video creators and those who publish video content to profit from it. TVOD content is sold in pay-per-view style, meaning it is the number of views of the video content that determines the cost.
TVOD is distinct from SVOD, short for subscription video on demand, in that it is unnecessary to require that viewers pay a yearly or monthly subscription fee. Rather, viewers are empowered to purchase/rent the specific content they desire. Examples of platforms that employ the TVOD model include YouTube and Amazon Prime Video.
Those who pay to purchase content are referred to as the EST crowd, short for electronic sell-through. Another acronym in DTO, meaning download to own, is used to describe the buyers who pay to purchase content. The advantage of purchasing content is that it provides permanent access throughout the entirety of the consumer’s life.
Alternatively, the renting approach is referred to by the acronym of DTR, short for download to rent. The DTR crowd prefers watching content in a limited temporal manner, meaning one time or a certain number of times within a designated period such as a month, a financial quarter, a year, etc.
The Different Variations of TVOD
TVOD publishers employ the PPV model described above in addition to two others. As an example, DTR as referenced above empowers users to view content for a specific period of time.
Electronic sell-through, or ETR, provides users with ownership of content indefinitely. In contrast, the PPV variation of TVOD mandates users pay a single fee to view an event, be it a concert, sports event, etc.
Why TVOD is so Popular
TVOD is highly effective for creating excitement about new content as it creates the impression that the viewers are watching something exclusive. Moreover, TVOD has an allure as it encourages viewers to shell out money for streaming content.
TVOD also has merit in that it empowers viewers to obtain ownership of specific content instead of shelling out hard-earned money for a year-long subscription that often includes access to content those viewers aren’t interested in.
TVOD is different from AVOD, short for advertising video on demand, as it provides consumers with a certain amount of agency. TVOD guarantees viewers are not subjected to advertisements that are irrelevant to the content. As a result, the aggregate TVOD market value has the potential to approach $13 billion or more in the next two years.
TVOD provides viewers with the option of paying for the exact content they desire and nothing more, similar to the pay-per-view TV channels that were popular in the 1980s, 1990s, and 2000s. Such a business model pleases customers to the point that they are likely to stick with the video provider, heightening the retention rate and adding to the bottom line.
The Disadvantages of TVOD
The TVOD models described above are not infallible. The downside to TVOD is that it makes it challenging to establish a lengthy relationship with customers, especially if they use a streaming platform for one specific series. In some cases, people are interested in watching the entirety or part of a single series yet lack interest in the remainder of the content.
Moreover, there is an argument to be made that TVOD functions the best when used in unison with additional monetization models such as SVOD, short for subscription video on demand. A basic subscription fee provides access to regular streaming content. There is also the option of offering additional content for an extra fee.
TVOD Will Stand the Test of Time
Though there are some weaknesses to the TVOD approach, its strengths will likely propel it to new heights of success in the years ahead. TVOD rakes in the revenue thanks to its prompt access to coveted video content.
The beauty of TVOD is that it draws in customers and then keeps them in the fold with additional offers of video content. It is the exclusivity of TVOD that creates the potential for staying power. As long as fresh new exclusive content is available through TVOD, there will be sufficient demand and also continued growth.
