The way in which the average person accesses content has shifted monumentally over the past few years. New direct-to-consumer (DTC) distribution models now let content owners provide viewers with unmitigated access to streaming options. Within this shifting landscape, models like Transactional Video On Demand (TVOD) offer content owners and viewers greater flexibility in providing and accessing entertainment.
TVOD content management systems are filling the gaps left behind by the collapse of the disk rental market. In fact, between 2011–2022, digital rentals and sales grew from $2.4 billion to $4.2 billion. Other content management system models for video are also taking over a portion of the digital market, such as AVOD (based on advertisements) and SVOD (a subscription-based model). However, TVOD is projected to sustain a modest yet steady annual growth rate of 1.7% over the next five years.
This suggests that TVOD’s unique revenue-per-view content monetization model has already cemented a place in the evolving digital Over-The-Top (OTT) streaming market. Let’s explore how content owners can take advantage of this growing revenue model.
What is Transactional Video On Demand (TVOD)?
TVOD is a relatively straightforward content monetization model. It charges viewers a single fee to access one video through digital OTT platforms. There are three primary ways that TVOD revenue models typically operate:
- Download-to-Rent (DTR): This model lets viewers download content for a predetermined time period. The rental time typically runs 24–48 hours after the first viewing.
- Electronic Sell-Through (EST): Under this structure, viewers can permanently purchase unmitigated access to video content through an OTT platform.
- Pay-Per-View (PPV): This model works well for live events as it lets users purchase access to a timed broadcast.
These content models offer an alternative monetization structure to widespread subscription models.
TVOD video content management can vastly improve the return on investment (ROI) on singular content items. While subscriptions provide access to an entire bank of entertainment options, charging per view increases the return on individual videos.
In addition, robust Digital Rights Management (DRM) authentication protocols are built into TVOD platforms. They prevent piracy more effectively than alternative OTT streaming options.
How Do You Distribute and Monetize Your Content With TVOD?
Content owners first need to determine if the TVOD monetization model is appropriate for their content library. High-value or niche videos can be particularly profitable when distributed through a TVOD model.
Some distributors may combine TVOD and SVOD models. For instance, you might have a subscription-based library but also put higher-value content like live events, digital movie premiere windows, and exclusive releases behind a paywall. Alternatively, some platforms start building an audience by making it easier to access attractive content through a TVOD payment system. They then transition to an SVOD model after they have an established customer base.
Once a content owner has determined that a TVOD model is right for them, they need to build the infrastructure necessary to distribute the video. This generally starts with establishing a relationship with a professional Online Video Platform (OVP) provider. Then, they need to ingest and organize the content with meta, artwork, and monetization business rules via a Content Management System (CMS) for video.
The final step is to work with a professional developer to manage the remaining necessary technical tasks, such as:
- Designing your OTT Network
- Develop all the apps for each device
- Integrating third-party software that supports your business model
- Go through the QA process
- Launch your apps in the respective stores
From there, the content owner can begin to distribute their video library.
What Types of Content Perform Well on TVOD Platforms?
The TVOD payment model is exceptionally profitable for content owners. But at the same time, TVOD models can be uniquely costly for the customer. As a result of this elevated cost, the ideal content for a TVOD model should have distinctive value.
- Live sports, concerts, or other viewing events are traditionally successful when distributed in a PPV format. On the other hand, new movie releases or TV show seasons are ideal candidates for the DTR (Download-to-Rent) payment model.
In addition, fitness courses or educational materials are often distributed through EST (Electronic Sell-Through) payment models, as they often offer more tangible value to the viewer.
Some platforms also utilize a “free trial” model with their TV series offerings, where the first episode or two are free to watch, and afterwards, users can unlock the rest of the season or series to watch for a one-time fee.
Future of TVOD: Trends and Industry Updates
Many content owners are watching trends within the evolving digital distribution industry like hawks. To stay ahead of the competition, they must accurately predict and meet the shifting demands of the market. So, in a time of complete transformation, it’s critical to understand where the future of distribution monetization rests.
Revenue in the TVOD market is expected to reach $10.20 billion by the end of 2023. What’s more, the expanding marketplace will see an increase in user penetration from 9.8% to 10.8% between 2023 and 2027. Clearly, TVOD will have a strong place in the future of OTT distribution.
That being said, the widespread trend among customers suggests an increasing demand for personalization that’s best supported by a diverse CMS video library. Rather than focusing on a one-size-fits-all SVOD, AVOD, or TVOD model, customers want diverse ways to access content based on their preferences. This means content owners may need to combine multiple monetization options to meet the needs of viewers within their video content management system.
For example, sports fans may want to simply buy access to one event. However, TV show viewers may be more interested in an ongoing subscription.
How To Find the Best OTT Platform
The steady projected growth of TVOD over the next few years—combined with the notably high-potential profit margins for the monetization model—supports a bright future for the distribution type. It’s an ideal solution for distributing unique content such as fitness courses, educational materials, new releases, and live events.
New customers who aren’t ready to subscribe but are interested in some of the available videos within an existing library can use TVOD to try content without a long-term commitment. This gives new users a direct way to interact with high-value content. Plus, it gives content owners an opportunity to entice users into subscribing later on.
To facilitate these emerging opportunities for customers, content owners must find a way to launch a DTC streaming service quickly. The best way to efficiently create a quality OTT streaming platform is to partner with the experts: dotstudioPRO.
Learn more about how dotstudioPRO’s wide-ranging distribution channels, intuitive CMS, and premier OTT streaming platform can help you stay competitive in today’s market.