On-demand TV or TV on-demand is a game-changing online television service that has risen in popularity for the past few years.
We all know that for decades, television has been a central part of many societies all around the world, and has been one of the most popular mediums humanity has ever known. For years, TV has set cultural trends, creates memorable moments and news, and also the home of many popular characters.
However, with more means to consume content and especially the advancements of internet technologies, linear TV is becoming more obsolete with many people believing that on-demand TV is going to replace it as the dominant TV consumption method.
Yet, what actually is on-demand TV?
What Is On-Demand TV?
On-demand TV, also called video-on-demand or VOD, is a new model of content distribution in television, as opposed to the traditional, linear TV broadcasts.
In the linear TV model, the content is delivered in a set schedule and if a viewer wants to watch content, they have to stick to that schedule. For example, if movie A is scheduled to play at 7 PM next Wednesday, then the viewer must tune in to the TV channel on Wednesday at 7 PM if they want to view the content.
In the on-demand viewing model, however, the viewer is allowed to watch any selected content (movie, TV show, etc. ) anytime, at their schedule’s convenience. Also, since the viewer is not tied to a rigid, linear schedule, they can fast-forward, rewind, pause, and re-watch the show as much as they’d like.
Typically an on-demand TV hosts and shares its content online via associated Content Delivery Networks (CDNs), which are collections of distributed servers (can be globally) so every viewer can get the content from a nearest located server to reduce latency.
It’s important to note that video-on-demand is different from live streaming. An on-demand TV contains previously recorded content. However, nowadays many on-demand TVs are also providing live streaming broadcasts, and vice versa.
So, with on-demand TV, it’s all about versatility and flexibility, but what actually are the advantages of the on-demand TV model over the traditional, linear TV? There are three core advantages:
1. Flexibility of Schedule
This advantage is true for both the viewers and the on-demand TV owners. In the on-demand model, we have the freedom of choice in choosing what kinds of content we want, when we are going to watch it, and with which devices. We are no longer tied to the TV set, and we can easily watch on-demand videos on our smartphones while commuting to work. Also, we can pause when we want and resume it later in the day or even the day after.
For broadcasters, this will also translate into better flexibility in distributing our content (i.e. we can distribute more than one ‘prime time’ shows every day).
2. Accessibility
Typically you only need a high-speed internet connection and a smartphone to start streaming on-demand content. Compare it to the traditional TV experience where we might need an antenna or a cable TV/satellite subscription.
3. Cost
Cost-wise, it’s much cheaper to access an on-demand content or have a monthly on-demand subscription compared to our traditional cable TV fees. Typically a content can be viewed at a much lower price via an on-demand model.
On-Demand VS OTT
The term on-demand TV, video-on-demand (VOD), and OTT (Over The Top) have been used interchangeably with each other, but it’s important to understand that VOD is not synonymous with OTT.
- Over the top (OTT) is a method of distributing the content, and in this case refers to all media content that is delivered over the internet instead of via traditional satellite and cable networks. When, for example, we send a message via WhatsApp or Messenger, it actually counts as OTT content. OTT describes the distribution model of the content.
- On-demand TV, on the other hand, is about how viewers can access any content anytime they desire (on-demand) rather than being tied to a set schedule. On-demand describes the consumption model of the content.
While OTT and on-demand TV can overlap in some cases, it’s important to remember that not all OTT content is on-demand.
On-Demand TV Monetization Models
Interested in starting an on-demand TV channel? Then you might be wondering how you can monetize the channel. Whether you are redistributing recorded content in your channel or publishing your own content, there are several ways we can monetize an on-demand TV, and here are the most common ones:
- Subscription-based
Officially called SVOD (Subscription Video-On-Demand), in this model viewers have unlimited access to all content in the library for a recurring fee, typically monthly. Netflix and HBO Go, for example, are examples for on-demand TV with SVOD model.
Subscription-based model is especially effective if you have a lot of attractive content in your library, but not very attractive if you are a brand new on-demand TV channel without too much recognition.
- Ad-based
AVOD (Ad-based Video-on-Demand) is delivered for free, but has commercials and advertising techniques, just like traditional TV to generate revenue. YouTube is technically an AVOD platform, and like many other AVOD platforms, YouTube offers YouTube Premium (an SVOD plan) to let us watch content without ads.
At the moment, AVOD is very popular in Asia, and unlike traditional TV, advertisers can take advantage of the on-demand TV distribution model and the OTT distribution to deliver highly-targeted advertisements based on demographics data and behaviors.
With how OTT platforms like Netflix, Disney+, Hulu , and others are making the VOD industry more saturated than ever, it is expected that AVOD models will be making a comeback to accommodate how consumers are unwilling to pay multiple subscriptions per month.
- Transaction-based
TVOD (Transactional Video-On-Demand) is similar to the pay-per-view model we have been familiar with since the days of cable TV. Here, we pay to watch specific content only, which is typically applied in highly anticipated sports events, exclusive movie releases, and other high-value content.
At the moment, TVOD is the least popular monetization model, but the recent COVID-19 pandemic has allowed a lot of direct-to-VOD movie releases with the TVOD model.
Starting Your On Demand TV: Platform Choice
A key consideration in starting your own on-demand TV is choosing the right platforms to deliver your content, which in some ways might also dictate how you can monetize your content.
In general, you have several options:
- Direct to Consumer (D2C)
In this model, we build our own on-demand platform. It can be our website (with embedded video player) or a mobile app, and we distribute our content from this platform, directly to the viewers. We can use solutions like Viloud to easily start our own on-demand TV channel in no time and have full control over our content and monetization.
Some key advantages with this model:
- You have full control of your content
- Monetizations are kept within your business
- Easier to interact with loyal customers
- Can easily expand to other non-content business models (eCommerce, etc.)
However, there are also some downsides to this model to consider:
- All costs are 100% yours
- You need marketing to drive viewers to your service, and this can take a lot of time and money
- Can be technically complex if you don’t know what you’re doing
- Sharing your content in an established platform
A good example of this model is when you start a Roku channel, or if you just want to distribute a single content (i.e. a film), you can work with platforms like Netflix to distribute this content.
There are some advantages with this model:
- Can provide a steady amount of reliable revenue if you have a good content
- Don’t need to do your marketing yourself, as the platform may be willing to support advertising
- Don’t need to spend costs associated with content distribution and design
- If you are working with a reputable platform, can significantly amplify your reach
However, there are also some downsides to this method:
- Some (and in some cases, most) control over your content is now the platform’s
- Your branding might not be as strong as opposed to having your own platform
- Your content’s performance will be tied to the platform’s, and it’s likely you don’t have much control over it
- Using public social media platforms
The third alternative is to use social media platforms like IGTV, Facebook, or YouTube to distribute your content. You can distribute your content for free using this method, while you can also tap into the social media network’s massive audience.
The pros of this method are
- Their large audience base. If your content is good, you can quickly grow your viewers
- You can use this method to support other channels (i.e. your direct to consumer website/app)
However, there are also some downsides to this option:
- Typically, will share revenues from advertising, but can be unpredictable
- If you don’t have a clear strategy, it can be difficult to get noticed amidst all the noises
End Words
The on-demand TV market is growing at a revolutionary pace, and if you are planning to start an on-demand TV channel, there has never been a better opportunity to start.
Regardless of the monetization model you’d prefer, Viloud can be your partner in starting your own on-demand TV channel while also offering the versatility to combine live-streaming and VOD in one channel to maximize your revenue.
