Streaming services offer various revenue models and you can earn pretty well through multiple revenue models that can help you with instant income generation. But you need to know which is the most sustainable model in your niche industry and how consistent is the revenue model for your OTT business in the foreseeable future.
The subscription-based model is the most rewarding model considering a long-term recurring revenue stream. Nevertheless, Ad-based and pay-per-view income styles are also considerably rewarding models.
What is SVOD?
SVOD or Subscription Video on Demand is a revenue model where the entire content library is accessible with a monthly or annual fee. These subscription plans are renewed automatically until the user opted out of the subscription plan. This revenue model is famous among people as they can cancel at any time and are not bound to any contractual agreement. They can get to have a vast range of content available to consume on a paid plan that holds great value for money.
Demand For SVOD Monetization
Market giants like Netflix, Amazon Prime, Hulu, Disney +, and Apple TV have all adopted the SVOD model. 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.
SVOD VS AVOD VS TVOD
(Subscription Video on Demand)
(Ad-Supported Video on Demand)
(Transactional Video on Demand)
Revenue Generation Style
Recurring fee according to monthly/ yearly plans
Payment from advertisers according to views
Income through buy/rent of the content
Unlimited access to entire content library
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
Having huge content libraries
For a massive audience base
For premium/ exclusive/ seasonal content
Skippable/ Non-Skippable Ads
Premium users can choose to remove ads
Can be implemented by ad-supported platforms as well
Netflix, Hulu, Amazon Prime Video, Disney+, HBO Max
YouTube, Crackle, Pluto TV
Apple iTunes, Google Play
When Can You Adopt SVOD Monetization Model for your Streaming Business?
OTT is a rather new technology and market players experiment with their business models before channelizing their revenue streams. However, it is suggested to 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 of SVOD Model
The success stories of streaming services who have adopted SVOD as their business model is well known and some of the market biggies are:
An OTT giant with the largest subscriber base, Netflix has surpassed 203 million active subscribers worldwide.
Amazon Prime Video
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.
Hosting thousands of movies & TV shows, Hulu is growing steadily with 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.
Advantages of SVOD Monetization
Adopting SVOD over other pricing models definitely has an edge in profit-making. Although, it is also critical to consider that not all businesses can have the benefit of subscription plans, probably because of not own niche content or not being able to invest in original content. The following are some prime advantages of the SVOD business model:
• Recurring Revenues
As we already shared the SVOD model recurring revenues because audiences have to pay a recurring fee on a monthly or yearly basis to renew their subscription and access the content library. Therefore, owners have a guaranteed regular income stream as long as users continue to pay.
• Loyal Subscribers
SVOD models are highly suitable, profitable, and offer niche-specific content. Hence, you need to earn a devoted audience who sticks with you for a long period of time. Your audience is supposed to be willing to pay on a recurring basis to consume content other than consuming free content through the AVOD model. 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.
• Pricing Plans
SVOD services usually invest in original content to retain customers and offer exclusive content to their dedicated loyal audience. For exclusive and original content, platforms offer different plans from basic to advance depending on various factors. The price of the content mainly depends on average revenue per user (ARPU), churn rate, etc.
• Audience Favorite
Its also proven through various facts and figures that audiences prefer and like subscription-based services more than any other pricing model. Ads while watching their favorite content, annoy the audience a lot and similarly, people don’t like to pay rent or buy every single time they want to consume content. Therefore, with the popularity of SVOD models increasing like never before, it is definitely something that businesses must adapt to reach a wider audience base.
Creating Subscription Plans With Vodlix
Monetizing your content with Vodlix 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.
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 (The number of days after which you can choose to implement auto-renewal options or manually make the user subscribe once the plan expires).
The set device limit-This is to restrict the number of screens a user can sign into based on the type of 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 by monetizing their content with this popular revenue model, Vodlix 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 religious services.