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What is SVOD? Your Guide To Subscription Video On Demand

In today’s age of cord-cutting and binge-watching, many companies are taking their content Over-The-Top (OTT). This means streaming content over the internet across multiple devices without the need for traditional TV providers. OTT is quickly becoming (if it hasn’t already) the preferred format for premium content, with the over-the-top market expected to grow from $40 billion in 2018 to $128 billion by 2026.

OTT revenue can be earned using a variety of monetization models. The biggest players in OTT, Netflix and Hulu, are examples of SVOD, meaning Subscription Video On Demand. But what exactly is SVOD? And what does it look like beyond the streaming giants like Netflix and Hulu?

That’s a lot of billions! Before you read any further, wipe away the dollar signs clouding your eyes and take the first step towards creating your own OTT channel with Endavo. We’ll even throw you a free -30 day, risk-free trial to boost your earning potential.

So how do you earn with OTT anyway? OTT revenue can be earned using a variety of monetization models. The biggest players in OTT, Netflix and Disney+, are examples of SVOD, meaning Subscription Video On Demand. But what exactly is SVOD? And what does it look like beyond the streaming giants like Netflix and Disney?

What is SVOD?

As we mentioned before, SVOD stands for subscription video on demand. You are likely a subscriber to one of these services. SVOD platforms typically set up a monthly or yearly subscription agreement with users and deliver TV and/or movie content for a flat monthly fee. When it comes to the differences between AVOD vs SVOD vs TVOD, AVOD services earn revenue from ads, and TVOD services earn revenue via singular transactions (pay-per-view). Some services like Hulu use a hybrid revenue model.

Which is better? The argument for AVOD vs SVOD could keep people up all night. The adoption of SVOD models has been growing ever since Netflix took its service to streaming in 2007. But for now, AVOD remains the most popular revenue model for premium content, and SVOD isn’t far behind. Of all the revenue made in the OTT market, >40.16% comes from subscription video on demand. Given the recent success of many subscription-based services, lots of businesses are beginning to step into the arena of subscription video on demand.

What are some examples of SVOD?

Netflix is the golden example of SVOD, meaning it’s typically the first streaming subscription most people can name. Here is a short list of some other popular SVOD platforms you may have used:

  • Hulu
  • Disney+
  • Amazon Prime Video
  • HBO Max

One thing that all of these SVOD platforms have in common is that the bulk of their content is comprised of movies and TV shows. This is generally the most sought-after type of content by viewers, so it makes sense that these SVOD platforms have done well. Still, several OTT SVOD platforms focus on other types of content.

Many people are turning to subscription video on demand for streaming sports. Tech heavyweights Amazon and Apple aim to boost viewership of their streaming subscriptions as they compete to replace DirecTV for the rights to NFL Sunday Ticket.

Religious groups and churches have utilized SVOD as well.  Up Faith & Family is a video streaming service that offers a collection of family-friendly Christian movies, comedies, animated features, and music specials, all for a cost of $5.99 per month. Churchstreaming.tv is another faith-based platform, created in response to the sharp decline in church attendance among Catholics. The platform allows members to virtually attend a live church service from wherever they are.

Another popular use of subscription video on demand is for educational purposes. One highly successful example of this is Kanopy, an Australian on-demand video streaming service for universities and public libraries. The company is now global and collaborates with public libraries and universities across the U.S. to distribute educational films and documentaries.

Whatever kind of content you’re planning to distribute, SVOD is a monetization option worth thinking about. 

Advantages & Disadvantages of SVOD

Let’s take a closer look at some of the pros and cons of subscription video on demand. We’ll start with some of the most notable advantages.

One reason companies love to utilize SVOD is that it provides a more consistent OTT revenue stream. Subscription services generate nearly twice as much revenue per user compared to ad-supported streaming services. When every single viewer pays a fixed subscription fee, the revenue generated more than makes up for revenue that could come from paid ads. It’s also generally more preferred from a consumer perspective—people are willing to pay for a service if it means they can get their content ad-free. The data backs this up, with 78% of U.S. households subscribing to at least one SVOD service.

In addition to being profitable, companies that adopt SVOD enjoy more control and customization over their pricing model. There are no price restrictions on the subscription fees set up for these platforms. This means you are free to charge whatever you want—of course taking into consideration the demand for your content.

Jumping back to the consumer perspective, subscription video on demand is a great way to demonstrate the exclusivity of your content. Many subscribers want to feel like part of a tight-knit community, and going subscription-based is a great way to facilitate this.

While exclusivity can be a strength in the former regard, it can also be seen as a disadvantage. Content can be harder to discover if it’s exclusive. This could become a hindrance if you’re focused on casting a wider net and reaching new audiences. Users may also experience content uncertainty since they will typically have to pay before they can browse and discover an SVOD platform’s entire host of offerings. One way around this is by offering a free trial of your service. Many subscription-based streaming services take this route.

How to decide if your content should be subscription-based

So you’ve decided to take your content over-the-top, good call. Now you need to figure out the best model for monetizing your content. Should you go AVOD vs SVOD or maybe even TVOD? 

SVOD sounds like an effective method (and it certainly is when paired with the right content), but how can you determine if YOUR CONTENT should be subscription-based? The following are some factors to consider.

Think about the type and format of the content being offered. For example, are you planning on distributing episodic content? If so, do you have multiple seasons ready to go, with new episodes on the horizon? Subscription video on demand is an excellent option for creators with a sheer amount of content. It can become a liability, however, if you don’t have content ready to roll out consistently in the coming months. Without consistent new releases, customers are likely to begin losing interest in your subscription platform.

You also need to consider your target audience. Adults aged 18-34 make up the largest percentage of subscribers to SVOD, meaning that going subscription-based could be a great option if you’re focused on reaching this demographic.

Your long-term strategy is another thing to consider when deciding on a monetization model. If your vision is to create a broad video distribution platform with a variety of exclusive content offerings, you may want to consider SVOD. On the other hand, if you plan to focus on more event-based and timely content, one of the other monetization models may suit you better. Don’t forget that you also have the ability to combine different methods to best suit your content and audience. With Endavo, you’ve got options.

Build your own SVOD platform

Ready to launch your own OTT SVOD platform? Endavo is here to help. Our purpose is to provide companies, organizations, and creators with more freedom to distribute YOUR content YOUR way. Right now, you can sign up for a free 30-day trial with Endavo and see for yourself how we’re empowering creators by giving them back control of their content. Still looking to learn more? Start a conversation and tell us more about your OTT strategy, and we’ll help you find the perfect plan.

FAQ

What does SVOD mean?

SVOD is an acronym used to describe a type of subscription agreement that allows the subscribed user to watch unlimited content in exchange for paying a recurring fee, often monthly or yearly.

What does SVOD stand for?

The digital content industry often uses the acronym SVOD meaning Subscription Video On Demand.

What is an SVOD platform?

An SVOD platform is any video streaming platform that you pay a recurring subscription for in order to watch an unlimited amount of content. Examples of popular SVOD platforms include Netflix, Hulu, Disney+ and Apple TV+.