Are you one of those who want to know how do VoD streaming platforms earn money? Well, you’re not alone. Lucky for you because this post will answer some of your hard-pressed questions about this topic.
More and more people have been cutting the cord and shifting from traditional TV to live and on-demand video. The reason behind that is relatively simple: internet-based video delivery is more accessible, affordable and provides better quality.
Thanks to the advancement of VOD technology, and the booming VOD market, a lot of consumers have many providers to choose from. In fact, you will find hundreds of streaming services available, and each one provides unique features, benefits ad content.
With a massive increase in VOD viewership, more and more streaming providers and publishers are entering the competition by launching and monetizing VOD apps. Consider that over a quarter of American households use some OTT application every day and are subscribed to at least five OTT apps. There’s enough room in the market regardless of the high competition.
However, how are publishers monetizing on VOD services? What are the best VOD monetization models out there? How do you determine you’re ready to launch a VOD app? These are some of the questions we will answer in this post.
What is a VOD Streaming Platform?
VOD refers to Video on Demand, a video that can be streamed whenever the viewer wants to do so. That can be performed either with the viewer downloading the video to their devices to watch later or through direct streaming from an online source.
That’s opposed to standard broadcasting, where the viewer can only watch their video at a scheduled period and only a device with a satellite or cable connection.
You see, video on demand began with pay-per-view broadcasts of movies and live events over satellite and cable connections. Nonetheless, it has since shifted to the digital world with mobile devices and fast internet proliferation.
How DoesThe VOD Streaming Platform Earn Money?
You will find three major video monetization models classifications, which are determined based on how the rights holder gains its share of the revenue, compared to the methods utilized to present content to consumers. These models include the following:
1. Transactional VOD (TVOD)
The transactional model is a rental, where the consumer pays a specific amount to access a content unit for a particular time. The price point could range between $1.99 and $15.99, and the period could differ from forty-eight hours to thirty days. The delivery method within the transactional model is EST (electronic sell-through), also referred to as DTO (download to own), offering a digital sale with perpetual, unlimited viewing.
Companies using this model are Amazon, Vimeo and iTunes, as well as CinemaNow, Blinkbox, and Vudu.
2. Advertising-based VOD (AVOD)
The AVOD monetization model is constantly becoming more advanced with choices including skippable or not, full screen or bucketed, pre-roll, mid-roll, or post-roll, and many other formats. Video advertising services such as Google AdSense, AOL One, YuMe
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