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What is SVOD? – A Complete Guide to Subscription Video on Demand

Debarpita Banerjee Published on : 03 April 2023
What is SVOD? - A Complete Guide to Subscription Video on Demand

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. 

What Is SVOD?

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. 

So, How Does SVOD Work?

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:

  • First, the platforms decide which content should be monetized and which content should be allowed for free streaming. This free content plays a crucial role in attracting viewers and influencing them to watch more. 
  • Next, the content owner decides the price of the content. It is an educated guess on how much the viewers will be willing to pay to watch your content. 
  • Once the price is estimated, they work on designing the subscription plan. They decide the amount of content to be delivered via each subscription plan, and their duration (usually monthly, quarterly, or annually). 
  • Some platforms even offer multiple subscription plans, so that their viewers can get the flexibility to decide on a plan that suits them the most. 
  • Once the subscription plans are launched, the viewers are asked to pay the subscription amount to continue watching their favorite shows. 

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. 

What is SVOD Platform?

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. 

Advantages 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.                   

 

Benefits of SVOD Service

                                 

1. Reliable Source of Revenue

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.                   

2. Customizable Pricing

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.                   

3. Loyal Consumer Base

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.              

4. Flexibility for Users

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.                  

5. Crowd Puller

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. 

 

Disadvantages of SVOD                 

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.   

1. Difficulty to Discover Paid Content

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.             

Tips To Tackle The Issue

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.                        

2. Regular Stock of Content

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.                   

3. OTT Churn

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.                 

 

                                                                                                                         

Which Streaming Business Should Opt for the SVOD Business Model

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. 

Have original content worth the price

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:

  • The content MUST be original and the idea must be fresh. 
  • Choose a few genres that are already popular amongst the audience, like Action, Horror, and Romance. 
  • Scan the rival platforms and see what type of content they are focusing on. Then try to deliver something that is unique yet popular. 

Have a large content library for a regular supply of fresh content

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. 

Willing to spend in retaining the subscribers

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. 

Ready to offer a free trial to selected viewers

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!                                                                                                   

SVOD vs AVOD vs TVOD vs Free Streaming

In today’s OTT market, four business models are predominantly popular, which are:

  • SVOD
  • AVOD
  • TVOD
  • Free Streaming 

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)

Top 5 SVOD Platforms in 2023 

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

 

1. NetFlix

NetFlix needs no introduction. Started way back in 1997, it is probably the first ever video streaming service on earth. 

Unique Benefits:

  • All content can be downloaded
  • Completely ad-free
  • Very user-friendly platform                             

Pricing:

In the US, their basic plan starts at $9.99 per month. 

 

Amazon Prime Videos

 

2. Amazon Prime Videos

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…

Unique Benefits:

  • Viewers can view anything on IMDb Freedive after selecting the content
  • They get additional benefits on music streaming and shopping under the same subscription
  • You can customize the captions through subtitle settings.    

Pricing:

Prime Video membership starts at $8.99 per month, while prime membership starts at $14.99 per month. 

 

hulu

 

3. Hulu

Hulu has grown extremely popular in the United States in recent years, but it is not available in many parts of the world. 

Unique Benefits:

  • New and fresh content at regular intervals. 
  • People can watch the latest episodes of TV shows a day after they get aired. 
  • They offer a 1-month free trial to every new user. 

Pricing:

Subscription plan starts at $6.99 per month. 

 

hbo max

 

4. HBO Max

Owned by HBO, HBO Max is probably the best place to stream premium content.

Unique Benefits:

  • Ad-Supported and Hybrid Subscription models are available. 
  • Subscribers can get free subscriptions through cable networks.
  • On signing in via Hulu, you will get a free trial of one week. 

Pricing:

Plans start from $15 per month. 

 

Disney+

 

5. Disney+ (and Disney+ Hotstar)

Disney+ is owned by Walt Disney, so there is no doubt that you will get the best of kids’ shows and Disney creations. 

Unique Benefits:

  • Disney Plus movies and TV series are available in 4K quality also
  • A lot of content is available in regional languages
  • Easy-to-use interface

Pricing 

In the US, pricing starts from $15 per month. 

Launch Your Own SVOD Platform With Muvi One

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:

  • You can create custom subscription plans that suit your content. 
  • With multiple subscription plans, offer complete flexibility to your viewers. 
  • Your subscriptions don’t need to worry about payments, as the subscription gets renewed automatically through recurring payments. 
  • Multi-currency support lets you gain subscribers from all parts of the world. 
  • Multiple payment gateways make payment easier for your subscribers. 
  • You can create and sell subscription bundles of a specific group of content. 
  • Send auto-payment reminders to your subscribers.
  • Create private subscription plans for special customers. 

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.

FAQs:

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:

  1. Create custom subscription plans that suit your content. 
  2. Multiple subscription plans offer complete flexibility to your viewers. 
  3. The subscription gets renewed automatically through recurring payments. 
  4. With multi-currency support, gain subscribers from all parts of the world. 
  5. Multiple payment gateways make payment easier for your subscribers. 
  6. You can create and sell subscription bundles of a specific group of content. 
  7. Send auto-payment reminders to your subscribers.
  8. Create private subscription plans for special customers. 

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. 

 

online music streaming

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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