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Discussing VOD, AVOD, SVOD, TVOD, and PVOD

Tencent MPS - Product Team

What is VOD?

VOD (Video On Demand) is a technology and service that allows users to choose to watch video content according to their own needs and time. VOD services allow users to watch a variety of video content such as movies, TV shows, documentaries, etc., at any time through channels such as the Internet, cable TV, or satellite TV.

VOD describe image

The main features of VOD services are flexibility and personalization. Users can choose to watch the content they want at any time and can pause, fast-forward, and rewind the playback. Typical applications of VOD services include online video platforms (such as Netflix, Hulu, YouTube, etc.) and on-demand services provided by TV operators.

What are the common types of VOD business models?

Currently, there are four different VOD business models: AVOD, SVOD, TVOD, and PVOD. Each has its own advantages and disadvantages, suitable for different application scenarios and user needs.

Advantages and Disadvantages of AVOD, SVOD, TVOD, and PVOD

AVOD (Advertising-supported Video On Demand)

Advantages:

  • Free viewing: Users can watch content without paying fees, attracting a large number of users.
  • Wider audience: Due to free viewing, AVOD platforms can attract more people to watch, thereby increasing advertising revenue.
  • Suitable for short videos and user-generated content: AVOD platforms are usually more suitable for watching short videos and user-generated content, such as YouTube and TikTok.


Disadvantages:

  • Ad interruptions: Users need to watch ads while viewing content, which may affect the viewing experience.
  • Content quality may be lower: Compared to other types of VOD, AVOD platforms may not be able to provide high-quality original content, as their revenue mainly comes from advertising.


SVOD (Subscription Video On Demand)

Advantages:

  • Rich content library: SVOD platforms usually offer a large number of movies, TV shows, and original content for users to watch.
  • Ad-free viewing: After paying the subscription fee, users can watch content without ads, improving the viewing experience.
  • High-quality original content: Many SVOD platforms invest in producing high-quality original content, such as Netflix's "House of Cards" and Amazon Prime Video's "The Marvelous Mrs. Maisel."


Disadvantages:

  • Subscription fees required: Users need to pay regular subscription fees to watch content.
  • Content scattered across multiple platforms: Many popular shows and movies may be scattered across different SVOD platforms, and users may need to subscribe to multiple platforms to watch all content.


TVOD (Transactional Video On Demand)

Advantages:

  • Pay only for the content needed: Users only need to pay for the content they want to watch, without subscribing to the entire content library.
  • Latest movies and shows: TVOD platforms can usually provide newly released movies and popular shows.


Disadvantages:

  • Single purchase costs may be higher: Compared to subscription services, users may need to pay a higher fee for a single movie or show.
  • Content selection may be limited: Compared to SVOD platforms, TVOD platforms may not be able to provide an equally rich content library.


PVOD (Premium Video On Demand)

Advantages:

  • Early access to new releases: Users can watch newly released movies online during or shortly after their theatrical release.
  • Home viewing experience: Users can watch high-quality new releases at home, saving time and expenses of going to the cinema.


Disadvantages:

  • Higher costs: PVOD usually requires a higher viewing fee, which may be higher than regular TVOD and SVOD services.
  • Limited content availability: PVOD services are typically only available for a select number of new releases, with relatively limited content to watch.

Market Share of AVOD, SVOD, TVOD, and PVOD

Market shares can vary over time, region, and industry development, making it difficult to provide precise data. However, based on some statistical reports and industry analysis, we can get a rough idea.

avod,svod,tvod,pvod market share

AVOD (Advertising-supported Video On Demand): The AVOD market continues to grow globally, especially in Asia and emerging markets. It is estimated that by 2023, the global AVOD market revenue will reach 56 billion US dollars. YouTube is the main leader in the AVOD market, dominating the global market share.

SVOD (Subscription Video On Demand): The SVOD market has expanded rapidly in recent years, particularly in North America and European markets. According to statistics, the global SVOD market revenue in 2020 was approximately 50 billion US dollars. Platforms such as Netflix, Amazon Prime Video, and Hulu occupy a dominant position in the SVOD market.

TVOD (Transactional Video On Demand): The TVOD market is relatively small but performs well in certain regions and niche markets. For example, iTunes and Google Play Movies & TV have a significant market share in the movie rental and purchase field. However, with the growth of SVOD platforms, the growth rate of the TVOD market may slow down.

PVOD (Premium Video On Demand): The PVOD market is relatively new, with a smaller market share. During the COVID-19 pandemic, the PVOD market received some boost as many films switched to online premieres. However, with the reopening of cinemas, the growth of the PVOD market may be affected to some extent.

It is worth noting that these data may change as the market evolves. The market share of various VOD models may also vary among different regions and user groups.

Challenges Faced by AVOD, SVOD, TVOD, and PVOD in the Industry

  1. Content costs: As competition intensifies, major VOD platforms need to invest more funds to purchase or produce high-quality content to attract and retain users. This may lead to increased content costs, affecting the profitability of the platform.
  2. Copyright issues: Globally, VOD platforms need to negotiate with content providers for copyright in order to provide content in different regions. In addition, protecting intellectual property and combating piracy are also significant challenges faced by the VOD industry.
  3. User dispersion: As more and more VOD platforms emerge, users may need to subscribe to multiple platforms to watch all the content they are interested in. This may lead to user dispersion, reducing the stickiness of individual platforms.
  4. Regulations and policies: VOD platforms operate globally and need to comply with the laws and policies of various countries. This may include regulations related to content review, data privacy, taxation, etc., posing challenges to the platform's operation.
  5. Technology development: With the advancement of technology, VOD platforms need to continuously upgrade their infrastructure and user experience to meet users' demands for high-definition, low-latency, and multi-device support. Moreover, emerging technologies such as 5G, VR, and AR may also impact the VOD industry, requiring platforms to innovate and invest in technology.
  6. Market competition: The VOD market is highly competitive, and major platforms need to differentiate themselves in terms of content, pricing, and user experience. At the same time, platforms also need to compete with traditional cable TV, satellite TV, and other media channels for market share.

Depending on the specific VOD model (AVOD, SVOD, TVOD, and PVOD), platforms may also need to address particular challenges, such as fluctuations in advertising revenue, slowed subscription growth, and declines in single purchase and rental income. To address these challenges, VOD platforms will engage in strategic adjustments, partnership building, and technological innovation.

Future Changes and Development Trends of AVOD, SVOD, TVOD, and PVOD

AVOD (Advertising-supported Video On Demand): With the growth of the online advertising market, the AVOD model may continue to expand its market share. In addition, adopting more refined targeted advertising strategies and innovative ad formats will help increase AVOD platforms' advertising revenue. At the same time, free and low-cost AVOD services may become more popular in emerging markets and cost-sensitive user groups.

SVOD (Subscription Video On Demand): The SVOD market will continue to maintain its growth momentum, especially in high-quality original content and diversified content. Competition will drive major SVOD platforms to increase their investment in high-quality content to attract and retain users. In addition, SVOD platforms may seek to bundle with other services to expand their user base and revenue sources.

TVOD (Transactional Video On Demand): The TVOD market may face certain challenges in the future, as more and more users turn to SVOD and AVOD services. However, TVOD still has some market potential, especially in providing newly released movies, exclusive content, and sports events. To cope with competition, TVOD platforms may seek to cooperate with other VOD models or third-party services to offer more attractive products and services.

PVOD (Premium Video On Demand): The future development of the PVOD market will depend on various factors, such as the reopening of cinemas, the impact of the COVID-19 pandemic, and consumers' acceptance of watching newly released movies online. Although the PVOD market may receive some boost in the short term, the long-term trend remains unclear. PVOD platforms may need to work closely with film producers and distributors to develop more attractive pricing strategies and distribution models.

avod,svod,tvod,pvod furture trend

In summary, all four VOD models - AVOD, SVOD, TVOD, and PVOD - will face intense competition in the future. To maintain competitiveness in the market, major VOD platforms need to continuously innovate, improve content quality and user experience, and seek diversified revenue sources and cooperation opportunities.

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