To earn a quick buck from your streaming service isn’t that big a deal, after all. In fact, there are a good number of revenue models to help you with this instant income generation. But, how consistent is this for your OTT business? Does this help you sustain yourself in your niche industry in the foreseeable future?
Ad-based and pay-per-view income styles are of course rewarding; however, subscription is the undisputed winner when discussing a long-time recurring revenue stream.
What is SVOD?
SVOD or the Subscription Video on Demand is a means of bringing in earnings by providing your audiences access to your entire content library, in most cases through a monthly or annual fee. These subscription plans are automatically renewed until opted out by the user. Consider it getting paid on a month-on-month or yearly basis for the entire collection of audio or video content you own.
What do people love the most about SVOD?
1) It typically puts no pressure on the user as the subscription can be canceled at any time and not bound to any contractual agreement.
2) Audiences believe subscriptions hold a great value for money considering the wide range of content available for consumption.
The Rising Demand for SVOD Monetization
Over the years, the now-market giants like Netflix, Amazon Prime, Hulu, Disney +, and Apple TV have all adopted the SVOD model for some very good reasons like the ones mentioned above. Today, there is absolutely no turning back for them as their demand is only advancing with every passing day. Holding the maximum market share, subscription-based services are expected to generate a whopping USD 71,237 million in revenue by the end of 2021 while Statista has projected the same to surpass USD 108,306 million five years from now. And as always, the United States heads the game with most subscription users from the country.
How Is SVOD Different From Other Monetization Models?
While every revenue model is different and has its own pros and cons, subscription-based platforms have an edge over other monetization styles in strategically being highly profitable and helping OTT services sustain themselves in the industry with very few hiccups.
|Monetization Models||SVOD |
(Subscription Video on Demand)
(Ad-Supported Video on Demand)
(Transactional Video on Demand)
|Revenue Generation Style||Small recurring fee based on monthly/ yearly plans||Payment from advertisers depending on views||Income through buy/rent option|
|Content Access||Unlimited access to entire catalog of content||Free content||Pay-per-view basis|
|Duration of Access||As long as the subscription is paid||As long as the user prefers||Limited window of 24/48 hrs for rented videos |
Forever access for videos that are purchased
|Who can adopt?||Solutions with huge content libraries||Solutions with a massive audience base||Solutions with premium/ exclusive/ seasonal content|
|Ads||Ad-free experience||Skippable/ Non-Skippable Ads |
Premium users can choose to remove ads
|Can be implemented by ad-supported platforms as well|
|Market Players||Netflix, Hulu, Amazon Prime Video, Disney+, HBO Max||YouTube, Crackle, Pluto TV||Apple iTunes, Google Play|
When Can a Streaming Business Monetize with SVOD?
There is definitely no hard and fast rule when it comes to monetizing your streaming service. OTT is a rather new technology and market players who have made it big now initially did experiment with their business models before channelizing their revenue streams. Adopt SVOD when
- You have a large content library at your disposal
- Your model is specific to a particular niche
- Ready to invest in original/ exclusive content from time to time
- Willing to spend in acquiring new subscribers & retain the existing ones
- Can offer a free trial to attract viewers
- You will continually tweak content based on viewer-led behavior
- Open to flexible plans
- You are on the lookout for a recurring passive income stream
Market Giants Who Have Mastered SVOD
The success stories of streaming services that have picked SVOD as their business model is something well known and here is a curated list of some of the market biggies.
Amazon Prime Video
|An OTT giant with the largest subscriber base, Netflix has surpassed 203 million active subscribers worldwide.||A hybrid business model (TVOD+SVOD), Amazon Prime has also hit the 200 million subscriber count.||With more than 100 million subscribers, Disney+ is climbing the success ladder pretty fast, showcasing content variety at its best across 59 countries.||Video hosting platforms thousands of movies & TV shows, Hulu is growing steadily with its 39 million paying subscribers.||Projected to acquire around 70 million subscribers by the end of 2021, HBO is an OTT venture by the popular American cable television network of the same name.|
Paywalls for SVOD Monetization
Paywall is a type of restriction set for accessing OTT platform content for free which is otherwise accessible only to paid subscribers. The most important aspect of a paywall is that it allows a user to access the content library only after the payment is complete.
Streaming video on demand business can either choose between implementing a ‘soft paywall’ (free access to a certain amount of content is provided before prompting the user to subscribe) or a hard paywall (Users can’t watch any content without a subscription).
Many of the streaming players have integrated subscription paywalls to their platforms to protect videos from inappropriate access. You can ideally purchase a third-party paywall or invest in a streaming solution that comes with an integrated paywall, the latter being more profitable in any case.
Benefits of Adopting SVOD
Adopting SVOD over other pricing models definitely has an edge in profit-making. However, it is also crucial to remember that not all businesses can have the benefit of subscription plans, probably because of not owning niche content or not being able to invest in original content.
Reliable Revenue for Years
As mentioned above, audiences pay a recurring fee on a month-on-month basis or annually without having to renew their video subscription platform every now and then. This ensures you as a service owner are guaranteed a regular income stream as long as users continue to pay.
Since most SVOD models own niche-specific content, you’re sure to earn devoted audiences who stick with you for long unlike audiences with advertising video on demand(AVOD) (More differences between SVOD vs AVOD). The more niche your content is, the more likely you are to earn audiences who’ll return to you for newer content from time to time.
SVOD services often tend to invest in original content to retain customers and because these pieces of content are exclusive to the VOD platform, there are really no pricing restrictions a business owner is bound to. The pricing window is quite large and can be altered any time depending on the value of the content offered.
For instance, the basic Netflix plan starts from $8.99 whereas Disney+ offers monthly plans starting from $7.99. So, there is no definite rule for pricing content and it all depends on factors like average revenue per user (ARPU), churn rate, etc.
Facts and figures have always proved that subscription-based services attract more audiences than any other pricing model. Moreover, with the popularity of SVOD models increasing like never before, it is definitely something that businesses must adopt to reach a wider audience base.
Creating Subscription Plans with VPlayed
Monetizing your content with VPlayed is as easy as pie considering the fact that it’s an all-inclusive streaming solution with a commendable CMS that eases your subscription journey for sizable profits. Learn the top 10 features of a content management system!
- Create subscription plans of your choice directly from the dashboard.
- Give your plan a name based on whether it is basic, standard, or premium.
- Decide over a weekly, monthly, or annual billing cycle.
- Price your plan based on market research and competitor pricing.
- Mention the duration of your plan (Number of days after which you can choose to implement auto-renewal options or manually make the user subscribe once the plan expires).
- Set device limit-This is to restrict the number of screens a user can sign into based on the type of the plan.
Content consumption has come a long way from traditional cable/ television packages to flexible pricing models. SVOD services in specific hold a high value for money and are loved by millions of OTT audiences across the globe for the very same reason. So, to benefit content creators, publishers, distributors, and business owners with video monetization platform & their content with this popular revenue model, VPlayed helps build a new-age subscription solution that excels on all monetary fronts. With no further thoughts, sell your content online with the most applauded income model that has ever existed and something that supports a wide range of industries including education, entertainment, sports, fitness, and Live stream church service.
If You Already have an idea about launching a Video Monetization Platform, Schedule a free demo and We’ll Get You On The Road To VOD Streaming Success!
Frequently Asked Questions (FAQ):
SVOD stands for subscription video on demand. This refers to video subscription services in which users need to subscribe to in order to access the online library filled with your curative assets. For an instance, let’s presume consumers are paying for long-tile content such as web series, premium movies, etc. Then they’ll get to watch these content because all of them come under SVOD package.
Subscription video demand has been booming in the streaming industry for many years. It empowers content streamers by providing their customers with what they want to watch. This is the key reason why audiences are turning away from cable or traditional means of entertainment & adopting SVOD platforms. Therefore, businesses get a direct line of income via building consumer relationship without the need to sell content to only advertisers. Also this has added benefit for viewers to enjoy services without any interruptions in between.
In order to start SVOD services from the scratch there are few things that you’ll need & they are: Online platform technology which easies overall viewing experience for your consumers. Then to justify the price make sure your platform have best login capabilities with paywalls in between along with device compatibility. Many subscription video on demand providers like you will need to provide proper tools in order to monetize content from any subscriber-base.
When it comes to revenue per subscriber on your own video platform there comes about much higher revenue as compared to consumer-grade platforms. Subscription costs in SVOD are usually kept minimal while comparing the aggregated costs of cable membership. And that means there will be a constant flow in revenue streams. Also, users can get an option to easily opt for multiple subscriptions to VOD platforms, without having money to burn totally in other entertainment sources. Thus it is a sustainable model from both video creators as well as consumer’s perspective.
We come to know about SVOD business is an ideal option to monetize your set of content as you tend to gain users who pay a recurring fee on monthly or yearly subscription to access your content. This is the time you know you are much confident about building a loyal audience. Luckily, research shows that the estimated revenue from the usage of SVOD are expected to constantly grow in the foreseeable future.
When you have decided to start an SVOD service, it becomes vital for you to choose a perfect best OTT platform provider. This is because your targeted viewers ultimately need the control of what they watch, whenever & wherever they want to. So make sure that SVOD services you create have different access levels at varied price points. This makes it convenient for a wider audience to avail them. Besides that, it is necessary to have customizable solution, a centralized storing hub for your assets, tech-stack to deliver content with buffer-free experience, & lots more.