How to choose: Subscription-based Video-On-Demand Compared to Other Monetization Models



Sometimes, businesses use videos as a part of content strategy, but it can also be a product to which you sell access. Major video services are subscription-based. However, not only entertaining content can be sold for a subscription. For example, educational videos, tutorials, webinars, and other videos can be available on-demand on an OTT/IPTV platform.

There are multiple ways to monetize your video content with the help of a video platform — AVOD, SVOD, and TVOD. SVOD is among the most widely used. Let’s talk more about it.

Different Monetization Models

AVOD service, TVOD service, and SVOD service differ from each other. To draw a complete picture of video monetization options, let’s observe them all.

AVOD — Advertising-based Video-On-Demand

Ad-based monetization model means that a content provider makes money by running ads on their content. In this case, viewers usually don’t purchase access to content. It is free of charge. That’s why they switch to them.

However, people need to watch ads during video playback. As researchers point out, more and more consumers don’t mind watching advertisements if it allows them to save some money on subscriptions.

TVOD — Transactional-based Video-On-Demand

Transactional-based VOD is also known as a pay-per-view monetization model. Compared to SVOD, a pay-per-view is the opposite. Viewers purchase a fee for every single piece of content instead of buying access to all videos simultaneously.

Transactional-based video-on-demand sometimes allows consumers to pay for a number of views or even download a video on their devices.

SVOD — Subscription-based Video-On-Demand

With a subscription-based VOD, viewers pay for limited or unlimited access to video content on the service. The subscription can be for a month, a year, or any other duration. In this case, people get access to content for a purchased period. Similarly, if a customer wants to cancel his/her subscription, and get an HBO Max refund or Roku refund, then he/she can do the same, and easily get the money refunded back to the account, for which the customer has been already charged.

Subscription-based video services allow viewers to watch whatever they want from their content library. Moreover, such services are usually available on multiple platforms and devices, including Smart TVs, smartphones, tablets, and computers.

Subscriptions are easily canceled. That’s why people feel more confident when obtaining a bunch of subscriptions to different services at once.

Hybrid Revenue-Generating Models

Many video platforms no longer use only one monetization model. Some content providers prefer utilizing a hybrid approach. They combine some of the models described above and generate a continuous stream of revenue.

For example, they mix ads with a subscription offering two options for viewers. One is ad-free and costs higher, while the other includes ads and costs less.

The other combination consists of a pay-per-view and a subscription. In this case, a content provider divides their content into two categories: a group of videos available on a subscription basis and another group requiring an extra fee.

There can be any other combination. It is up to a business owner to decide on the money-making model.

When to Use an SVOD Model

The SVOD model can be profitable but doesn’t suit all businesses. For example, the following industries can benefit from SVOD:

  • Educational institutions
  • Entertainment
  • Yoga & meditation experts
  • Sports clubs
  • Kids content creators

Final Thoughts

Subscription-based video-on-demand is a great way to monetize your video content and grow as a content creator. And it is convenient for viewers as it is easy to cancel the subscription to a particular video service.

If you produce educational, sports, or entertaining videos, you can monetize them with the SVOD model. If you understand that it doesn’t suit your business, there are TVOD and AVOD at your disposal.

If you want to create or upgrade your video service, we recommend you contact Setplex. They implemented all monetization models in their IPTV/OTT solution.