Are you one of those who want to know how VoD streaming platforms make money? Well, you are not alone. You’re in luck because this post will answer some of your tough questions on the subject.
More and more people are cutting the cord and switching from traditional TV to streaming and video on demand. The reason for this is relatively simple: Online video delivery is more accessible, affordable and provides better quality.
Thanks to the advancement of VOD technology, and the booming VOD market, many consumers have many providers to choose from. In fact, you will find hundreds of streaming services available, and each one offers unique features and benefits of advertising content.
With the exponential increase in video-on-demand viewership, more and more streaming service providers and publishers are entering the competition by launching and monetizing VOD applications. Keep in mind that more than a quarter of American households use some OTT app every day and are subscribed to at least five OTT apps. There is enough space in the market regardless of the high competition.
However, how do publishers monetize their video-on-demand services? What are the best video-on-demand monetization models? How do you determine that you are ready to run a VOD application? These are some of the questions we will answer in this post.
What is a video-on-demand platform?
VOD stands for Video on Demand, a video that can be streamed whenever the viewer wants to do so. This can be done either by having the viewer download the video to their device to watch later or by streaming it from an online source.
This is in contrast to standard broadcasting, where a viewer can only watch their video in a specific period and a device with a satellite or cable connection.
As you can see, Video on Demand began streaming movies and live events with pay-per-views via satellite and cable connections. However, it has since moved into the digital world with mobile devices and the rapid spread of the internet.
How does a video-on-demand streaming platform make money?
You’ll find three main classifications for video monetization models, which are determined based on how the rights holder gets its share of the revenue, compared to the methods used to deliver content to consumers. These forms include:
1. Transactions on demand (TVOD)
The transactional model is a rent, whereby the consumer pays a set amount to access the content unit for a certain period of time. The price point can range from $1.99 to $15.99, and the period may vary from forty-eight hours to thirty days. The delivery method within the transaction model is EST (Electronic Selling), also referred to as DTO (Download to Own), offering digital selling with permanent and unlimited supply.
Companies that use this model are Amazon, Vimeo, and iTunes as well as CinemaNow, Blinkbox, and Vudu.
2. Video on Demand (AVOD)
The AVOD monetization model is constantly becoming more advanced with options including the ability to skip or not, full screen or bundle, pre-run, in-run, post-run, and many other formats. Video advertising services such as Google AdSense, AOL One, YuMe, Videology, AdoTube, Auditude, SpotExchange and Brightroll offer media purchase or ad exchange without sales personnel.
Advertising revenue is split between the platform, the rights holder, and an aggregator or distributor if one is used. Most deals are 70/30 or 50/50, with YouTube offering a maximum of 45/55 (not in favor of the product) and Vimeo 90/10 (in favor of the product).
3. VOD Subscription (SVOD)
Netflix has published this subscription model widely. It’s legendary, as the company started with a DVD-like transaction model. The standard subscription fee is settled between $8.99 and $9.99. The price fights that occur in some areas range in price range from $3.99 to $5.99.
Hulu Plus, Amazon Prime, and Netflix are currently leading the market – with different niche players developing, such as Mubi and Fandor. Netflix doesn’t officially release the data, but some experts suggest that commissions of $5,000 for a non-exclusive license for a typical two-year period, along with negotiating an average of $10,000 to $20,000. A huge but rare $50,000 negotiation is possible.
4. Hybrid VOD
Although it works outside of VOD, you’ll find three other nuances worth mentioning. Hybrid options combine TVOD, SVOD LIKE Sony Playstation Vue, Xbox Live, CraveTV and Roku from Canada and SkyTV in the UK to create a plug-in for the audience viewing experience by collaborating with physical technology in tandem with the VOD platform.
There are also other self-supporting services, such as DotStudio and FilmBuff, where content creators can upload their material and take advantage of marketing, platform, and hosting services.
Choosing the Best VOD Platform Provider
Do you want to build your own VOD platform? Then you need great video services on demand platform provider. The market is full of different VOD solution providers, but it is essential to choose the right one that fits your business needs and aligns well with your content strategies.
An efficient and effective VOD solution provider must have all the modern technologies and features, which are also future proof. A robust IT infrastructure along with a reliable distribution network will help you stay connected and expand into the future.
Moreover, if you are looking to make money from your VOD platform, it will help you if you pay close attention to the payment and monetization gateway support models. Ultimately, the service should be within your budget as the streaming and content creation business takes huge investments up front.
Video-on-demand streaming is a great tool for businesses out there. However, learning how VOD streaming platforms make money can be a bit confusing. But with effective planning and careful investments, you can definitely achieve greater success.
At the same time, traditional TV broadcasting is expected to shrink at a compound annual rate of 1.5 percent between 2020 and 2026. This indicates that video on demand is the best approach for you, especially if you want to create video content.
We hope you find this post engaging and informative. Are you ready to make money from VOD streaming platforms? We wish you all the best on your journey!