SVOD stands for subscription video on demand. This refers to video streaming services when users must subscribe to in order to access the content. SVOD is the most popular and the simplest way to monetize the service. But one needs to take into attention the specifics of the audience and the VOD library of the content. For example, SVOD tends to attract younger and higher-income users which can be seduced by libraries with more exclusive titles in it. Another challenge may become rigid brand's competitiveness and so called streaming fatigue. For the first the operator will need to invest permanently not only to the content but also to the brand development. For the second — go all-out to fight the churn rates
Anyway, this is the most popular model. The operator may create different packets of content or different plans for streaming devices, and offer them to subscribers depending on the marketing strategy, so-called subscription-based plans.
Example:Netflix, Amazon Prime Video, Disney+AVOD
AVOD stands for Ad-based Video on Demand. This type of service refers to ad-based video on demand that is free to its consumers. It makes it attractive to the growing number of subscribers who are overwhelmed by the number of streaming services to choose from.
Here, ad revenue is used to offset production and hosting costs. The operator may take advantage of the low entry threshold for subscribers, which leads to a rapid increase in coverage for subscribers who do not want to pay for VoD consumption. Or monetize "old" content. The advertising model is faster and easier to adopt than the subscription service model but requires a lot of work with advertisers. Once the channels of ads vendors are settled then it is easier to manage the monetization.
To mitigate negative impact to the viewing experience, the operator may use new technologies of ad insertion and smooth transition of ad breaks.
Example:YouTube, Pluto, TubiTVOD
TVOD stands for Transactional Video on Demand and includes pay-per-view of each individual content, the so-called pay-per-view (PPV - pay-per-view). In the case of a purchase of content, it can be given for so-called temporary use. So the operator gives the opportunity for the subscribers to pay for the TV shows and movies they want to see, not for the bundles or plans.
It is easy to deliver pay-per-view video to the subscribers and has many variants for up-sale - one may start with a base price for a couple of hours and then offer tiered services. The challenge is that the pay-per-view model will require a professional streaming platform that supports TVOD. Also it may be more difficult to keep the audience under the control and may not work as the only revenue source.
The model works especially well for niche or event streaming services.
Examples:Xfinity (Comcasts sport events), ITsART (streaming platform for Italian culture), Fandango NowHybrid
Hybrid model assumes combining two or more of the models above. For example, the operator could be using an ad-based monetization model for their entire video library except for their premium shows, which they could offer as PPV. Some platforms may even combine all three of these models. Or as a part of the retention policy, the operator may suggest a subscriber AVOD plan after SVOD is being canceled.
Some services like Hulu or Peacock use a hybrid model, combining different types of revenue models. Peacock is a streaming service with three subscription tiers.vMVPD and FASTs
Two more models are worth mentioning as they grow popular in the OTT business. These are Virtual Multichannel Video Programming Distributor (vMVPD) and free ad-supported streaming TV services (FASTs).
vMVPD is an OTT service that provides their viewers or subscribers with VOD streaming content and linear content from broadcast channels. vMVPD and SVOD services may look similar but they differ when it comes to the content delivered. The main difference is that they appeal to different consumption behaviors.
Link for reading:
TV watching is going back to the future. More people want to watch linear. https://www.nexttv.com/features/channel-flipping-makes-a-comeback?ct=t(streaming-wars-08-23-21)
is very much the same as AVOD, but instead of ad-supported on-demand content, it is ad-supported live TV content. This can be on-demand also, but increasingly it is linear channels with dynamically inserted ads that provides ad-supported video content for free to the audience.
More content owners are using their older content libraries to build niche FAST channels as both a source of revenue, and a vehicle for driving subscriptions to more premium content. The main advantage of the FASTs is that they are closer to traditional broadcast TV but have more potential to innovate and smooth out the advertising experience. This is of the biggest value regarding how the viewer's behavior has changed.
For broadcasters who want to change from traditional over-the-air linear but not fall into subscription video on demand platforms, the best option is to reach more streaming devices or locations. Today FASTs include Pluto TV, Samsung TV Plus, The Roku Channel, and many others.
Link for reading: Why More Advertisers (and Consumers) are Going F.A.S.T. http://comcastadvertising.com/insights/free-ad-supported-tv-report.html