What is VoD (Video on Demand) Streaming & How it Works: Detailed Guide

As you are reading this blog, you are probably watching a funny cat video that just appeared on your Facebook feed. That’s VoD. People are consuming VoD content every minute, unaware of the fact that it’s VoD channel. 

As suggested by a recent report, the year-over-year viewing times on VOD platforms are up by 155%! So, as the demand for video is on the rise, content creators, and broadcasters are now faced with infinite opportunities to thrive in this evolving industry. Ready to get onboard the VoD ride? This blog will give you an in-depth idea of what VoD is, how it works, and how your business can benefit from it.

What is VOD (Video on Demand)?

VoD or video-on-demand is a way of consuming video that is chosen by the viewers from a repository at any time, anywhere, and on any device, according to their preferences. VoD highlights the concept of watching videos based on the demands of the user as opposed to watching scheduled content on linear TV.

Simply put, VoD allows users to 

• Watch content at any time – be it while traveling, cooking, or doing daily chores

• Watch whichever content they want – as opposed to consuming content on TV which is already scheduled and you have to watch whichever show is being broadcasted at that given point in time

• Control watching patterns through media controls – viewers can, pause, play, rewind, fast forward, and have complete control of how they are watching content

Nowadays, you don’t have to go too far to delve into the concept of video-on-demand; it can be found anywhere- a Youtube video on baking a raspberry cake, your favorite Netflix show, a product demo video on your company’s website, or a cute dog video on Facebook. Any pre-recorded content on the internet that can be played at any given point in time is VoD.

Example: Streaming services like Netflix, Disney+, Amazon Prime Video, and Hulu are examples of a few top players in the VOD platform space.

Did you Know – According to Statista, by 2025, VOD user penetration is projected to reach 29% with a revenue of 126.5M USD i.e a CAGR of 15%.

What can VOD be used for?

Practically anything. VoD is a popular form of watching content and can be useful across various domains and industries like:

• Entertainment
• E-learning
• Corporate Communication
• Music and Dance Lessons
• Fitness Classes
• Product Demonstrations
• Webinars
• Employee Training  
• Podcasts 

VoD vs. OTT: What is the Difference?

One particular question that often arises is ‘Is VoD the same as OTT?’ Well, OTT or Over the Top is how media content is delivered, that is, via the internet without the intervention of traditional cable or satellite services. VoD, on the other hand, is just a part of OTT- it is how the content is consumed by viewers. Any content that starts when you push the play button is VoD. For example,  Netflix, YouTube, and Facebook Watch fall into the VoD category.  

Both VoD and live streaming are a part of the OTT delivery model because to watch such kind of content one just has to have access to the internet instead of relying on traditional services like cable TV or satellite. So, while OTT refers to the content distribution model, VoD stands for the content consumption model.

How does VoD Work?

Here’s a short snapshot of how video-on-demand content works- 

• The video file is first compressed into a digital format to enable transmission over the internet
• The video file is then transcoded into a readable format and stored in the VoD platform servers 
• The video asset is packaged into a video container that holds important information such as metadata, subtitles, and thumbnails
• When there is a playback request from the user, the video is compressed and transmitted over the internet via a content delivery network (CDN)
• After the video is received by the video player, it is decompressed and decoded into viewable content by the user

What’s Video Monetization?

Simply put – content or video monetization is the process of incurring revenue from the videos you publish on your VoD platform. When you publish an original video on your streaming website, your customers get access to the content by either paying a one-time fee for it or by paying a monthly subscription or by watching ads. So, when your audience views or downloads your content, you earn revenue. There are different models of content monetization. More of that in the next paragraphs.

Learn more: Video Monetization Options – What to Choose?

What are the Best Revenue Models of VoD?

Whether you are distributing a pre-recorded video content or publishing a brand new web series directly to consumers, several strategies that can be utilized to boost revenue using VOD content. 

The three main monetization models of VoD are – SVOD, TVoD, and AVOD. let’s take a sneak peek:

SVoD

SVoD or subscription video on demand is the most widely used content monetization model for VoD platforms. With this revenue model, viewers have the choice to pay a monthly subscription to get access to an exclusive content library. The freedom from commercial interruptions backed with quality content makes SVoD a popular monetization model amongst users. 

Streaming giant Netflix has championed the SVoD model by providing users the ability to upgrade from Basic > Standard > Premium to unlock access to exclusive content and features.

AVoD

AVoD is a content monetization model that incurs revenue by placing ads in the video. Advertisements can be displayed in the form of pre-roll, mid-roll or post-roll and can be skippable or non-skippable. VoD platforms using this model entails customers watching the video for free in return for watching ads in between.

For example, YouTube uses the AVoD model where viewers get free access to watch videos including ads.

TVoD

TVoD or Transactional Video on Demand lets customers pay for a particular video they want to watch as opposed to paying a recurring monthly fee for getting access to a whole content library as in the case of SVoDs. This revenue model enables users to make a one-time purchase for savoring exclusive content.

Features that Make up a Great VoD Streaming Platform in 2021

So, what exclusive features do you need to jump in on the VoD bandwagon? Well, although free VoD platforms like YouTube help you monetize our content, you would require a professional online video platform to help promote your brand name, market and monetize your VoD content. The popular B2C video hosting platforms and social media often fail to meet the standards of professional broadcasters dealing with a high volume of media assets. Enterprises need business-grade video hosting platforms to grow their brand and online video platforms like Muvi provide an end-to-end OTT streaming solution to businesses of such kind. 

Here are a few benefits  of using an Enterprise-grade video streaming service:

• White Label Streaming Service – Using a White label VOD platform enables you to use your logo, brand colors, etc that reflect your brand persona. A VoD platform should be able to build a brand name for itself and this is where free video hosting sites like YouTube fail to cut the mustard for most content creators.

• Adaptive Bitrate Streaming– The functionality to ensure that the best quality video streams are getting delivered to your customer is of immense importance for a video streaming platform. This is possible only through ABR-enabled video streaming– so make sure your streaming service provider supports ABR technology.

• Encoding and Transcoding tools– Encoding and transcoding are essential functions performed by the video hosting solutions to compress and decompress your video into variable renditions for smooth playback on various devices. We recommend looking for a solution that has cloud video transcoding capabilities for VOD content to reach users with different screens and varying internet speeds without any hassles.

• Scalable and Reliable Delivery– If your VoD platform boasts an exclusive content library, you would want to reach out to your customers in every corner of the world and that is only possible through a fast and reliable CDN or content delivery network. Also, an option for a multi CDN–enabled VoD service provider adds a layer of reliability as it allows routing of your content to the most optimal server located closest to the user requesting it. The result – lower latency and faster delivery of your content.  

Muvi Server can integrate with leading CDN providers like Amazon AWS, Akamai, etc to provide a multi-CDN delivery leading to low latency content delivery across the globe.

• Video Security– Content security is of vital importance for content creators and is one of the primary reasons for choosing a professional video streaming service as opposed to free video hosting platforms like YouTube. User authentication, data encryption, watermarking, and digital rights management (DRM) are important video security capabilities to look for in a VOD provider.

• Multiple Monetization– Make sure you choose a VoD streaming service that enables multiple monetization models including subscriptions, ad-based, PPV, or a hybrid model as per your business requirements. 

Wrapping Up,

Making content accessible anywhere and on any device, VoD truly enables a better user experience for customers, therefore transforming from a ‘can have’ to a ‘must-have’ feature for a wide range of industries and use cases.

Muvi is a highly reliable and feature-rich end-to-end OTT platform provider that can add new video capabilities to your business. Muvi’s fully managed online video platform offers both Video on Demand (VOD) and Live Streaming solutions empowering you to launch your white label multi-device VoD platform, instantly!

Are you ready to explore how optimized and user-friendly Muvi’s feature-rich VoD platform is? Check it out yourself by taking a 14-day Free trial!

Also Read: 9 Tips to Effective VoD App Onboarding Experience

                     Comparing the Top 5 Video On Demand Platforms for 2021