What Is SVOD (Subscription Video on Demand)?

by The MNTN Team

8 Min Read

As of 2024, 83% of U.S. households have an active subscription to at least one streaming service. Such a sizable amount illustrates the growing popularity of subscription video on demand (SVOD), which has forever changed the way people consume television shows and movies. People can watch what they want when they want, and often while avoiding commercials.

However, all these services add up in a budget, and major SVOD providers have realized that many consumers are interested in striking a balance between convenient viewing options and cost savings. That desire has led to the emergence of hybrid models, which can provide viewers with cheaper streaming subscriptions in exchange for watching ads.

Here’s everything you need to know about SVOD and its alternatives, including ways your brand can tap into these valuable advertising resources.

What Is SVOD?

Subscription video on demand is a service model through which users pay a recurring monthly or annual fee to gain unlimited access to a vast library of video content.

Unlike traditional broadcasting, SVOD allows viewers to watch content at their convenience without being tied to a preset programming schedule. The unmatched level of flexibility is what makes SVOD a preferred choice for millions of consumers.

SVOD vs. AVOD

Advertising video on demand (AVOD) is another viewing model that offers viewers content for free in exchange for ads being shown before, during, and after their content. Streaming providers use these OTT ads to generate revenue and pay content licensing fees. Platforms like YouTube and Tubi operate under the AVOD model.

SVOD vs. TVOD

Transactional video-on-demand (TVOD) works much like traditional pay-per-view (PPV) models that cable and satellite TV providers offer: Users pay for individual pieces of content, such as episodes or seasons from a TV show.

The main difference between the two models lies in the fact that TVOD users typically have the option to rent or buy the content. It’s an appealing option to viewers who want to access new content before it becomes available on SVOD streaming services.

The main downside to TVOD, however, is high costs. A single season of a TV show or an early-release movie — even as a rental — can cost just as much, if not more, than the average monthly SVOD subscription.

Learn more about AVOD vs SVOD vs TVOD

How SVOD Works

Subscription video-on-demand platforms operate by acquiring the licensing rights to a variety of movies, TV series, and other video content. Subscribers pay a monthly or annual fee in exchange for unlimited access to that content library, which they can stream on various OTT devices, such as:

Smart TVs
Computers
Game consoles
Tablets
Smartphones

SVOD providers will regularly add fresh content and remove select titles from their libraries, typically every month. Many SVOD platforms also offer original movies and shows to further increase the appeal of their services.

Key Features of SVOD Services

Some features that SVOD services have in common are:

Strategic Licensing and Release Windows

SVOD platforms negotiate exclusive content rights through long-term licensing deals, often structured around time-sensitive release windows. This staggered approach lets platforms refresh libraries consistently while controlling demand cycles and competitive positioning.

AI-Powered Recommendation Engines

SVOD services rely on advanced algorithms to personalize the user experience, tracking behavior, engagement, and completion rates to surface the next best title. These data-driven systems help increase session duration and keep viewers within a platform’s ecosystem longer.

Scalable Global Delivery Networks

To maintain stream quality at scale, leading SVOD providers use global content delivery networks (CDNs) to minimize buffering and latency. This infrastructure ensures reliable, high-definition playback across markets, no matter the region or connection strength.

User Profile Segmentation and Controls

Most SVOD platforms allow for multiple profiles under one account, each with unique preferences, watch histories, and parental controls. These tools give households better personalization while helping platforms capture more nuanced user behavior.

Downloadable Content for Offline Viewing

Offline playback has become a standard SVOD feature, especially for mobile users. By offering downloads, platforms extend usability beyond Wi-Fi zones and create more reasons for subscribers to stay engaged on the go.

Advantages of SVOD

The various benefits that subscription video-on-demand models provide are as follows:

Ad-Free Optional Viewing Experiences

Users who value convenience and uninterrupted viewing appreciate the often ad-free nature of SVOD platforms. They can watch multiple episodes uninterrupted when it’s most convenient for them. And since SVOD platforms are compatible with various devices, users also have the freedom to start watching on one device and easily transition to another to finish the content.

High-Quality and Exclusive Content

SVOD platforms often invest heavily in producing original and exclusive content to differentiate them from similar providers and win over more consumers.

Predictable, Recurring Revenue

Subscription-based models supply streaming service providers with a steady and predictable revenue stream, allowing them to plan long-term investments in content creation and platform upgrades.

Disadvantages of SVOD

Subscription video-on-demand models are not without a few potential drawbacks, which include the following:

Subscription Fatigue and Churn

There are quite a few SVOD providers these days — many of which promote exclusive content offerings. As a result, consumers may sign up for multiple subscriptions or bounce between platforms based on content release schedules. Subscription fatigue, however, is a very real phenomenon that emerges when consumers grow tired of paying recurring fees to multiple streaming providers.

That phenomenon, along with rising costs, has encouraged many consumers to shift towards more ad-supported viewing options as a means of cutting costs. As of Q4 2023, 64% of consumers reported that they would choose to save money on subscriptions, even if that were to require viewing some streaming ads.

Higher Customer Acquisition Costs

Attracting new subscribers often requires SVOD platforms to invest significant amounts into marketing efforts, but fierce competition among SVOD providers continues to drive up customer acquisition costs, impacting profitability. In fact, it is these often prohibitive costs that have helped the largest streaming services dominate the market.

Limited Audience Reach Compared to AVOD

Since SVOD services require a paid subscription, they may have a more limited audience compared to ad-supported streaming services, and that can affect content visibility and brand exposure.

The adoption of hybrid subscription models has helped streaming services expand their reach and generate multiple forms of revenue. Platforms like Disney+ have introduced both ad-supported and ad-free subscription plans.

Popular SVOD Platforms

The most popular subscription video-on-demand platforms are as follows:

Netflix

Netflix began as a DVD rental service before transitioning to a streaming service in the late 2000s. It has since become a global leader in the SVOD market and has focused exclusively on ad-free viewing options for most of its existence. In 2022, however, Netflix introduced an ad-supported tier in response to complaints about consistent subscription price hikes.

Hulu

Hulu offers a combination of current-season TV episodes, classic series, movies, and original programming. The platform offers several different subscription tiers, including ad-free and ad-supported options.

Peacock

Peacock, NBC’s flagship streaming service, features a mix of TV series, movies, news, sports, and live TV. It originally offered a free AVOD plan, but it has since transitioned to two paid tiers. The cheaper plan is ad-supported, while the more costly plan is (mostly) ad-free.

Paramount+

Like Peacock, Paramount+ also started with some free viewing options before transitioning to multiple paid tiers. Its cheaper plan is ad-supported, and its more expensive offering includes SHOWTIME and is ad-free (except during live TV broadcasts).

Disney+

Disney+ offers one of the most complex subscription offerings. There are ad-supported and ad-free tiers for Disney+ as a standalone service, as well as six different bundles that include Disney+.

These bundles feature two and three-package options that include Disney+, Hulu, and either Max or ESPN+. Each package combination has ad-free and ad-support variations.

Why Advertisers Need Performance TV

SVOD has reshaped video consumption, and its gradual shift from true ad-free streaming to hybrid, ad-supported subscription models creates a multitude of new advertising opportunities. CTV advertising via streaming platforms allows you to precisely target your ideal audience, measure content performance, and pursue your growth goals.

However, succeeding in the TV advertising market is easier with the help of the hardest working software in television: MNTN Performance TV.

With MNTN, you can automate your campaigns, tap into premium advertising inventory, reach the right audiences, and measure your campaign results. Verified Visits™, our proprietary attribution solution, allows you to accurately measure the impact of seeing your ads on consumers, and track the actions they take afterwards.

Also, MNTN Performance TV takes ad targeting to the next level with MNTN Matched, which ensures your ads reach the right audiences at the right time in their decision-making journeys.

Explore the many benefits of streaming advertising by working with MNTN.

Subscription Video on Demand: Final Thoughts

SVOD is here to stay, meaning your brand has the opportunity to reach its ideal audience while they are engaged with content they love. Ready to integrate SVOD advertising into your marketing mix? Team up with MNTN and magnify your reach in 2025.