Are you willing to know more about Subscription Video-on-Demand or SVOD? We are here with all your answers! In this blog, we will explain what SVOD is, its workflow, the pros, and cons of SVOD service, and why your streaming business should own an SVOD platform. So, keep reading!
In today’s world, the internet is the go-to place for streaming videos. In 2023, 3.48 billion people worldwide would be streaming videos over the internet. And out of this huge number, a major chunk consist of OTT viewership.
Over-the-top streaming platforms have grown immensely popular in the past few years. With fresh interesting content, they are keeping the viewers hooked for hours. And binge-watchers are paying them good amounts of money to enjoy their favorite content.
That is why, the video streaming market will be growing at a CAGR of 18.4% in the coming years. And Subscription Video On Demand (SVOD) will have a massive contribution to this growth, as it will grow at a CAGR of 9.48% globally.
So, as a video streaming entrepreneur, you must have a clear understanding of what SVOD is, and how it works.
Have you ever visited NetFlix, Amazon Prime, or similar video streaming platforms? Then you must be aware of a very common message that appears on these sites:
“To continue watching your favorite shows and movies, please subscribe to our services”
Notice the word, ‘subscribe’.
When you subscribe to their service, you actually pay a specific amount of money, and in return, get access to their entire content library for a specific period of time. This time frame varies from platform to platform. Some allow you to enjoy their services for one month, while some give you access for an entire year.
This process of generating revenues from videos is called Subscription Video-On-Demand, or simply SVOD.
In the SVOD business model, the streaming platforms lock a certain portion of their video content library, so that only their subscribers can access them. Those who do not subscribe would not be able to stream those videos.
This entire process consists of the following steps:
Hence, by choosing the SVOD business model, the streaming business can ensure cash flow at regular intervals, as their subscribers need to renew their subscriptions after a certain period of time.
Any video streaming platform that adopts the SVOD monetization model is called an SVOD Platform. Netflix, Amazon Prime, Hulu, and Disney+ are all examples of SVOD platforms. Now you may ask, why would you opt for an SVOD business model? Because SVOD has certain specific benefits which are missing in many other monetization models. Let’s now take a look at some of the major benefits of SVOD.
There are multiple advantages of Subscription Video-on-demand which makes it a favorite of both business owners and viewers. A reliable source of revenue for years and a strong and loyal consumer base are the major USPs of this OTT Business Model.
Subscription ensures regular revenues for video streaming businesses. Hence, you can plan your financial budget and expenses more efficiently, leading to the steady financial growth of your business.
You can customize your subscription plans to suit your consumer’s needs. You can analyze the video streaming preferences of your consumers and design suitable subscription plans catering to the content of their choices.
If you are running an SVOD model of monetization, you will have a complete list of your subscribers, who are basically your core audience. You can connect with your consumers, give them the benefits of discounts and offers, and build a very loyal and trustworthy relationship.
For the users, the SVOD model offers flexibility to choose their plans, based on the type of content they want to watch. Also, they can choose when to pay (in case of choice between monthly and annual plans), and which content to pay for.
Over the years, subscription has been one of the most popular OTT monetization models. Thus, there is no doubt that SVOD has been popular amongst the crowd.
Every coin has two sides. Similarly, every OTT business model has both pros and cons. In the case of SVoD, content discoverability is a factor that businesses must seriously consider. Also, you should continue delivering premium content regularly to retain your customers.
When you lock your content behind a paywall, the chances of its discovery reduce. The free users cannot get access to these contents, as a result, they never get attracted to some of your premium content which could have given you multiple conversions.
You can create trailers and short video clips of your premium content and promote it on social media. You can also add these trailers to the subscription popup and paywall. This way, you can tell your free consumers about your paid content and influence them to buy the subscription.
As the subscribers pay you at regular intervals, they expect regular content from your side too. That is why, you must have a vast stock of quality content that you can deliver at regular intervals. Otherwise, your subscribers might end their subscriptions after a few months.
When your subscribers stop paying you and leave your platform, then know that you are facing OTT churn. There can be many factors behind an OTT churn. Not delivering quality content on time, and too high subscription prices are some of them.
Read more on how to tackle and reduce OTT churn here.
Now comes the most vital question – is your streaming business ready for Subscription Video On-Demand? Well, to answer this question, you just need to fulfill the requirements given below.
No one will pay you an immense amount of money for watching useless stuff. So, you must first work on creating some amazing content that is worth the price. Some of the things you need to keep in mind while doing so are:
As discussed before, subscribers will leave you after some time if you do not supply them with fresh content to binge on. So, before entering into the SVoD space, you must create a pool of content, so that you can have a buffer stock of at least one year. Otherwise, you might miss out on your deadlines leading to a significant amount of churn.
How much are you willing to spend on gaining and retaining subscribers? Well, experts suggest that in your initial days, you might have to spend anything from 5% to 50% of your revenues to gain new subscribers and retain the old ones. Because if you don’t, you might end up with zero revenues very soon. So, you must be flexible when it comes to spending for and on your subscribers.
Will you ever buy a movie ticket without watching its trailer or going through its cast and crew list? No right? So, why do you expect your audience to buy your subscription without knowing anything about your content? Ideally, you must provide them with a free trial period of two weeks or one month, so that they can watch your content. If they like it, they will definitely subscribe!
In today’s OTT market, four business models are predominantly popular, which are:
To help you understand their difference better, we have prepared a quick table of comparison between AVOD vs SVOD vs TVOD vs Free Streaming below.
Parameters | SVOD | AVOD | TVOD | Free Streaming |
Mode of Revenue generation | Mainly through subscription fees | Mainly through the ads placed in between the content | By selling access to a few specific contents of your platform for a specific period of time. | Either through donations or ads |
Mode of access for viewers | Unlimited access till the subscription period lasts | Unlimited access but will have to watch ads in the middle of content | Access to that specific content for which they have paid for a specific period of time. | Unlimited free access |
Benefits for Businesses | A trusted source of generating assured revenue every month or year. | Extremely flexible in terms of the value of one content (depending on the placement of ads) | One of the main benefits of TVOD is that you can give access to only specific content without disturbing others. | You can get a lot of consumers. |
Benefits for Consumers | Fixed amount of money to be paid for the entire content library, hence it is value for money. | Do not have to pay any amount to stream the content. | Pay only for the content that you really want to watch. | Do not have to pay any fixed amount (but might have to pay at least something in the form of a donation) |
We recently reviewed some of the most popular SVOD services in the market, and here’s our pick for the top 5 SVOD Platforms in 2023.
NetFlix needs no introduction. Started way back in 1997, it is probably the first ever video streaming service on earth.
In the US, their basic plan starts at $9.99 per month.
Owned by Amazon, Amazon Prime Videos is much more than just a streaming site. One prime membership can give you access to movies, shows, music, early and free delivery of your Amazon orders, and much more…
Prime Video membership starts at $8.99 per month, while prime membership starts at $14.99 per month.
Hulu has grown extremely popular in the United States in recent years, but it is not available in many parts of the world.
Subscription plan starts at $6.99 per month.
Owned by HBO, HBO Max is probably the best place to stream premium content.
Plans start from $15 per month.
Disney+ is owned by Walt Disney, so there is no doubt that you will get the best of kids’ shows and Disney creations.
In the US, pricing starts from $15 per month.
Are you a budding content creator, looking to launch your own SVOD Platform? With Muvi One, you can launch your own Svod Service very easily in just a few clicks, without writing a single line of code. What’s more? You get access to 100+ industry-leading features and hence can develop a very powerful and secure video streaming platform.
With Muvi One SVOD:
And the best thing is, you don’t need to share your revenues with anyone. Your revenues are completely yours!
Wanna try? Sign up for a 14-day free trial today.
Q1. What are some examples of SVOD services?
Ans. Netflix, Amazon Prime Videos, Disney+, and Hulu are some examples of SVOD Platforms that offer subscription video-on-demand services.
Q2. What are the benefits of SVOD?
Ans. SVOD has massive benefits for both viewers and businesses. By Subscribing to platforms, viewers get access to the entire content library at a very low price. While the business gets assured payments after regular intervals.
Q3. What are the benefits of using Muvi to launch an SVOD service?
Ans. If you use Muvi to launch your SVOD service, you can reap the following benefits:
Q4. Why SVOD Is The Best Option To Make Money?
Ans. SVOD is the best option to make money because you get repeated payments after specific time intervals. Also, the subscribers prefer the SVOD model as they get access to the entire content library.
Written by: Debarpita Banerjee
Debarpita is a Content Writer with Muvi. With around 2 years of experience in content creation, she has worked across industries like SaaS, EdTech, eLearning, AR-VR, and Metaverse. She believes in delivering content that can be of some value to the readers. In her free time, she likes to try her hand at website and app development.
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