VOD Streaming Explained: Complete Guide (2024)

What is VOD?

VOD, or video on demand, is exactly what you mean by that: it's the ability to play and watch videos whenever and wherever you want.

It is opposed to the broadcast model adopted by traditional media, where you are forced to watch scheduled content.

VOD can refer to any pre-recorded video content that you watch on the Internet. Video streaming services like Amazon Prime, Apple TV, and HBO are common examples of VOD platforms based on entertainment.

While VOD may seem like a recent innovation, it's actually an old concept.

The VOD model appeared in the early 1990s.

At the time, thanks to massive improvements in data compression and transmission technology, it was possible to distribute video over telephone lines.

Let's move on to the current decade, and today, we can watch VOD content and other content on demand via the Internet thanks to a large number of services. Even social media platforms like YouTube, Facebook, and Instagram have become important VOD channels.

Another benefit of VOD playback is that you're not restricted to a single device, like your television, for consumption. Subscribers to a VOD service can easily use any device, from the desktop to the laptop and even the mobile phone, to access VOD content.

Most of the most popular online video services and livestreaming platforms offer access to video on a subscription basis or a pay-per-view model. However, the restriction on these platforms is that you can only access content from creators affiliated with these content networks.

If you're a freelance creator or a business looking to take advantage of the power of VOD, there are a large number of streaming platforms at demand. These allow you to host, manage, monetize, and distribute your VOD content transparently.

Is VOD the same as streaming?

When we talk about VOD, the question that inevitably arises is whether it is the same as streaming. The answer is quite simple: it is not. Streaming is just one way to watch VOD content; the other way is to download the entire video.

When you stream VOD content, the video is not stored in your device's memory. On the contrary, you are watching the data stream directly when it is downloaded and interpreted by the video player. Netflix is the best example of a video streaming service.

If the platform allows it, you can even download the video to watch it later. For example, in some cases, YouTube will allow you to download and to store a video to watch later. Remember that these downloads are usually encrypted to only work on a specific application.

Streaming is only one of the methods of distributing content in the case of VOD. Naturally, for seamless VOD streaming, you need to have a high bandwidth Internet connection. Otherwise, you may run into buffering issues.

Fortunately, with the advance of telecommunications technologies and the wide proliferation of 4G and 5G internet connections, bandwidth is rarely an issue today. Viewers can thus broadcast video content in Full HD and even in 4K without significant delay.

Difference between VOD and Livestream

A lot of people often confuse VOD and live streaming. If you think about it carefully, there is an important difference between these two ways of consuming content. And each has pros and cons as well.

Live streaming is a video streaming method where viewers see video in real time (with slight latency in some cases). Here, spectators are part of a live event taking place while they watch it.

There are several benefits to live streaming, like the ones shown below:

• The feeling of being part of an exclusive event
• Massive reach in real time
• Reduced costs compared to real world seminars and meetings
• Suitable for numerous marketing events such as product launches and press releases.
• Ability to use interactive communication tools with targeted persons

However, all of these advantages also come with their share of disadvantages:

• Live streaming is time-limited, which means you need to watch it at a fixed time.
• Viewers don't have the advantage of being able to store content right now to watch it later.
• Live streams are technically more complicated and require more resources than VOD.

VOD, on the other hand, mainly uses pre-recorded content that viewers can access at their convenience. VOD platforms allow users to access and watch content according to their schedule from any device connected to the Internet.

Modern lifestyles and rapidly changing technological landscapes have fuelled the growth of VOD. Today, even live streaming providers are readapting their content to broadcast it on VOD platforms. VOD allows for better control, greater adaptability, and more flexible viewing modes.

What is OTT?

Since you're already reading articles about VOD, chances are you're familiar with the term OTT. These are “Over-the-Top” services, that is, technologies and platforms that allow video streaming over the Internet.

OTT doesn't only apply to video streaming, but can also work for audio and VoIP calls. All you need to use OTT is a stable internet connection, and you're ready to go.

OTT has emerged as an attractive way to deliver content for entertainment providers as well as other businesses. Because OTT video streaming can be done at a fraction of the cost required for traditional broadcasting, it has grown in popularity among users and businesses.

Here is a list of some of the benefits that OTT offers:

• Multi-tier customer-centric pricing
• The ubiquity of the time and place of consumption
• A seamless user experience across devices
• Real-time audience measurements and customer data
• Minimal disruption to content delivery
• Better content segmentation

OTT technology has allowed VOD to become increasingly popular. But is OTT synonymous with VOD, or are there differences between the two? That's what I'm going to discuss in the next section.

Difference between VOD vs. OTT

Despite the fine line between OTT and VOD, the two services have an important technical difference. OTT defines how content is delivered to viewers, which is the actual technology used to deliver content.

VOD, on the other hand, describes how the viewer consumes content. In short, if OTT is the distribution model, VOD is the consumption model. You can watch both VOD streams and live streams on OTT platforms.

It is essential to mention here that OTT technology is one of the reasons why VOD has become so popular around the world. Today, VOD and OTT models are intertwined in hybrid and complex content delivery models.

How does VOD work

Now that you know what VOD is, let's understand how it works. Here is a brief explanation of the VOD transmission model and the various steps that it involves.

Stages of VOD operation:

• First, video resources are compressed using appropriate compression techniques.
• Then, the resources are encoded/transcoded into a format that can be played on a video player.
• Then, the compressed and encoded assets are moved to the VOD servers.
• After coding, the assets are placed in a video container.
• The container comes with essential information such as thumbnails and metadata.
• On request, the asset is encrypted and sent to users' devices.
• Several protocols such as HLS or MPEG-DASH are used for this purpose.
• Some video on demand services also use content delivery networks (CDNs).
• Finally, the video content is decoded by the player, and you can see it

Remember that the explanation above is a simplified overview of the entire VOD process. When you delve deeper into VOD technology, things get even more complex when you factor in user permissions, ABR technology, and monetization models.

Speaking of monetization models, let's take a look at how you can use VOD to generate revenue.

What are the different types of video on demand monetization models?

Video on demand is a great marketing and educational tool, but that's not its only purpose. It can also be used to generate significant monetary benefits. Many businesses use VOD as their main source of revenue.

Here is a list of the various revenue models that have emerged to monetize VOD.

1. AVOD (ad-based video on demand)

AVOD is the revenue model followed by YouTube. Here, revenue is generated by ads that are strategically inserted into video content.

In the AVOD model, the user does not have to pay anything to watch the video. Here, the main strategy is to attract as many viewers as possible to videos and ads. Social media sites like Facebook, Dailymotion, and Twitch use this model.

Here's a list of the different types of ads you see in videos:

• Pre-roll : The ads appear before the video starts.
• Mid-roll : The ads appear while the video is playing.
• Post-roll : ads are placed after the video.

In the AVOD model, ads can also be divided into three categories: skippable, semi-skippable (after a few seconds), and non-skippable.

READ MORE: Best YouTube ad blockers

2. SVOD (subscription video on demand)

SVOD is currently the most popular VOD consumer model. In this revenue model, the viewer or subscriber pays a monthly fee (often billed annually) to access the VOD service provider's content library.

Common examples of services that use this model are Hulu, Amazon Prime, and Netflix. Netflix is the service that popularized this model by offering several subscription plans with different facilities in each level.

3. TVOD (transactional video on demand)

The transactional VOD or TVOD model uses a pay-per-view system. In this case, the customer has to pay for the video they want to watch and only that video. In a way, it's the opposite of SVOD, where you have to pay to have access to the entire content library.

Again, the TVOD model can be broken down into two sub-models:

• DTR, or Download to Rent
• DTO, or Download to Own

In the DTR model, the user cannot store video on their storage device but must stream it. In the DTO model, the user can download and store the file on their device's hard drive.

Popular platforms using TVOD are Apple iTunes, Google Play for Android, and Amazon Prime.

4. BVOD (Broadcaster Video on Demand)

BVOD or Broadcaster VOD is a subtype of AVOD, where broadcasters broadcast catch-up television shows on demand alongside linear content offerings. Most of these services derive their revenue from subscriptions.

A notable exception, in this case, is the BBC iPlayer in the UK, as licensing fees fund it.

5. HVOD (hybrid video on demand)

The last VOD revenue model I need to discuss is the HVOD or hybrid VOD. HVOD is a combination of two or more of the revenue models mentioned above. It follows a freemium subscription scheme, where users can switch from AVOD to SVOD for a fee.

Notable services using HVOD are Vimeo and YouTube Premium, where the upgrade can allow viewers to unlock special features and content.

Benefits of VOD

Video has always been the most popular way to consume news and entertainment. From television and DVRs to YouTube and beyond, VOD has come a long way, and for good reason. Here are a few benefits of VOD listed in a nutshell.

1. Not limited by fixed hours

The ability to reach the audience when they are most likely to be interested in your content is the main benefit of VOD. Unlike traditional streaming services like cable television, VOD allows users to view content how, when, and where they want.

So, not only do viewers have the option to choose their viewing times, but content creators can also take advantage of this feature to reach the audience at their convenience. It's a win-win situation for all stakeholders.

2. Extremely practical

The other important advantage of VOD is its extreme convenience. You don't need to record anything, buy special equipment, or even travel to get a video disc. Just press “Play” and you're ready to watch.

If you have activated autoplay, you don't even have to do much. VOD also doesn't require a download and doesn't take up space on your device's storage. And you can play the video on all of your devices.

All of these conveniences reduce the friction needed to get viewers to consume your content. This is undoubtedly as important an advantage for viewers as it is for content creators and providers.

3. Low budget assembly

Unlike satellite or cable television, which requires massive infrastructure investments, VOD is relatively easy to set up and use. All you need is recording equipment, a regular high-speed Internet connection, and a VOD hosting platform.

The low cost of the entry barrier makes it easy for businesses and individual content creators to enter the VOD sector. It also means that users can consume VOD content with very little investment in equipment.

4. Global reach

As most VOD services are available on smartphones, the reach of VOD is massive. Such a vast network translates into a global audience base that can be reached with just a few clicks and taps.

5. In-depth analyses and distribution of targeted content

One of the differences between traditional video consumption and VOD is that viewers almost always access VOD content from a personal device. This means that as a service provider, you can have access to massive amounts of data about your viewers.

This improves audience segmentation, targeting, and content delivery. With detailed data about how customers interact with your content and their demographics, you can refine your VOD model to deliver tailored content to viewers.

You can even offer subscribers personalized watch lists, like the ones offered by Netflix. Most video-on-demand services today use recommendation systems based on artificial intelligence to suggest programs to their audience.

6. Better conversion

All of the above benefits ultimately culminate in the most important of them all: better conversions. Instead of just streaming content and hoping for audiences to connect, video on demand service providers can use analytics and related metrics to ensure conversions.

Disadvantages of VOD

Compared to the advantages, the disadvantages of VOD can be considered negligible. However, it's best to take a look at them to make sure you don't fall into the trap of one of them during your VOD trip.

Here is a quick list of some of the disadvantages of VOD:

• Many parts of the world suffer from low bandwidth.
• Large number of competitors
• Too much content can lead to content fatigue
• Multiple pricing plans cause confusion

A direct (and often indirect) result of a combination of these pros and cons, viewers are now left with more content than they can consume. Such a situation can be considered both a plague and an asset, no matter how you look at it.

How businesses can take advantage of VOD

When it comes to VOD, it's easy to get caught up in the entertainment world. But today, businesses are also reaping the benefits of VOD. Whether it's improving marketing, sales, or raising customer awareness, VOD has taken root in businesses.

Here are a few ways businesses can take advantage of VOD:

• For effective digital marketing
• Effective data feedback
• Better understand customer behavior

In this context, VOD tutorials and training videos are very useful for businesses. Many businesses use VOD to welcome new employees and even to train existing staff.

The benefits that businesses can derive from VOD are unlimited. You just need to have a clear strategy to use this technology.

How do you choose the right video on demand services for your business?

It's easy to see why VOD is an essential tool for businesses. The main problem that most businesses face here is choosing the right VOD services. I recommend that you keep three crucial factors in mind when choosing the right VOD platform for your business.

1. Privacy and security

A VOD platform for businesses (also known as EVP - Enterprise Video Platform) will most likely handle sensitive business information. This information should be protected from unauthorized access and downloads.

That's why, when choosing a PVE, businesses should ensure that these platforms offer enterprise-grade encryption and digital rights management (DRM). Fine-grained access control and SSO can allow you to better control access to video resources.

2. Reliability

For businesses, a VOD platform must be reliable and accessible when needed. To ensure this, ensure that the provider you use has effective CDNs and adaptive bitrate streaming. Thus, your videos can be viewed anywhere and at any time.

3. Flexibility of features

Finally, any VOD platform for businesses should be flexible enough to adapt to business needs. It should also be customizable enough to provide a completely personalized experience for target people.

Summary.

Video on demand may not be a new concept, but the ubiquity that modern Internet technology gives it is undoubtedly revolutionary. The ability to consume video content at your convenience has changed the content landscape forever.

So it's no wonder that businesses are scrambling to take advantage of it. However, VOD is still evolving and we don't know where this growth will take us. With increasing personalization and tailor-made content, the race for VOD supremacy is intensifying.

One thing is certain: the audience and providers of video on demand services have numerous advantages in taking advantage of this technology.

Don't wait for the trend to peak; be one of the first to enter the VOD space and enjoy the first-mover advantage.