SVOD, AVOD, TVOD: Video on Demand Models Explained

by The MNTN Team

8 Min Read

SVOD, AVOD, TVOD—there are so many acronyms to remember when viewers just want to keep track of their favorite characters and shows.

TV viewership has changed drastically in the past few years (goodbye cable cords, hello wireless viewing). However, it’s going to keep changing as different platforms fight for viewers and struggle to become profitable, particularly in the face of economic uncertainty and an audience that may not want or be able to keep spending top dollar for an increasing number of services.

If you’re looking to make sense of the new TV landscape, read on.

What is SVOD?

Subscription Video On Demand (SVOD) is a model of media distribution where consumers pay a recurring fee to gain unlimited access to a streaming platform’s content library, ranging from films to TV shows.

How Does SVOD Work?

SVOD works by enabling subscribers to view this content at any time and from any device with internet connectivity, offering a high degree of convenience and user control over the content selection and viewing schedules.

SVOD Platforms & Services

SVOD services are the leaders in the Connected TV (CTV) space. SVOD services include:

Amazon Prime
Netflix
Apple TV
The Criterion Channel
Mubi
Disney +
HBO Max, Hulu and Peacock premium subscription tiers (more on this later)

Pros of SVOD

The pros of SVOD are simple:

SVOD services bring a wide range of viewing options to viewers’ fingertips in a hyper-convenient fashion. If you want to watch “Star Wars” for the 10th, 100th or 1000th time, it’s easy (so long as you subscribe to Disney +). Similarly, if you’re looking for an interesting Brazilian crime show or a film noir thriller from the 1950s, you can likely find one on your SVOD of choice. SVOD services offer a mix of original and old programming, providing most families with enough viewing options if you subscribe to two or three services.
SVOD services have no ads. If you’re easily distracted or annoyed by streaming ads interrupting the narrative thread, SVODs provide watching without such interruptions.
SVOD services must constantly update their libraries with new or licensed movies and TV shows to stay competitive, so there should always be something new to explore. Some SVOD platforms maintain broader offerings, while others are more niche. Either way, there should be something for everyone. And there will certainly be a lot more new and compelling shows than on a standard old-fashioned television network.
SVOD services can also provide value-adding behind-the-scenes content, extras and interviews with filmmakers.

Cons of SVOD

The cons are also obvious to anyone who’s signed up for an SVOD:

Shows you want to watch are likely spread out across several SVOD platforms. After a while, paying for several services—each of which you may only use sporadically—gets tiring as expenses pile up.
The offerings on some of the streamers are of widely varying quality. What starts out looking like a world of options can be pretty limited after you watch your top picks.
Similarly, SVODs can take their offerings off at any moment. Movies and TV shows come and go without warning. Say what you will about the old Blockbuster days, but there was something satisfying about having a hard copy of something in your hand—and it wouldn’t disappear without notice.

What is AVOD?

Advertising Video On Demand (AVOD) is a media distribution model that provides free or reduced-cost streaming services to viewers, who in return are shown advertisements during their viewing experience.

How Does AVOD Work?

AVOD works by leveraging the revenue generated from these advertisements, allowing platforms to offer content at no cost to the user and enabling advertisers to reach a specific audience segment based on their viewing habits and preferences.

AVOD Platforms & Services

Some prominent AVOD platforms include:

SlingTV
Crackle
YouTube
Roku Channel
Facebook Watch

Pros of AVOD

AVOD’s pros are as follows:

AVODs are cheaper than SVODs since they can rely on ad revenue, too. This is probably the number one reason people switch to AVODs.
AVODs offer a wide variety of content—in some cases, as with Hulu and Peacock, the same content is offered in the SVOD model but with ads. Some AVOD services have a more specialized offering but still feature well-made new shows with recognizable talent and classics.
For many viewers, ads are not so bad. Many shows are still structured with classic act breaks, allowing for a fairly seamless integration of ads. And classic network shows like “The Office” were, of course, made to be consumed with ads, anyway.

Cons of AVOD

For some, the ads constitute a disruption of narrative flow. However, research suggests that this depends on how many ads are shown, with consumers being fine with five ads or fewer.

While some AVODs are free, many (like Peacock and Hulu) still involve a monthly subscription fee. Even if these fees are lower than pure SVOD, they can still add up. You may want to draw the line somewhere rather than sign up for a half-dozen AVODs.

Still, trends show that AVOD is on the rise as a way for consumers to deal with increasing costs. Of HBO Max’s viewers, 30% watch on the AVOD tiers. And 73% of Peacock’s viewers watch with ads.

What is TVOD?

Transactional Video On Demand (TVOD) is a media distribution model where viewers pay for each individual piece of content they choose to watch, similar to the traditional rental or purchase of movies or television episodes.

How Does TVOD Work?

TVOD works by providing a wide selection of content to users who can then selectively purchase or rent what they want to watch, thus offering high-quality content without needing a subscription or viewing advertisements.

TVOD Platforms & Services

Popular TVOD platforms include:

Renting or buying movies on Amazon
YouTube rentals and purchases

Pros of TVOD

TVOD’s pros are:

When you want to watch something specific and it’s not on any streaming services, TVOD remains a great way to track down that movie or TV show you really want to see.
TVOD may seem more expensive than a streaming service’s a la carte options, but it’s usually only a few dollars to rent something on YouTube or Amazon.

Cons of TVOD

Making several TVOD transactions can add up and get pricey when compared to the solid value proposition of a streaming service. This could get expensive if you have kids who want to watch the same movie repeatedly.
TVOD services may not offer every single thing you want to see. The internet has a lot on offer, but not everything is accessible. If you love cool old movies, subscribing to a site like Criterion Channel may give you more access to diverse offerings.

SVOD vs. AVOD vs. TVOD: Summary of Differences

So, just for the sake of clarity, let’s summarize the key differences between each video-on-demand service.

Payment Model

SVOD operates on a subscription-based model, where users pay a set fee monthly or annually for unlimited access to a library of content.
AVOD, on the contrary, offers content free of charge to the users but monetizes through embedded advertising within the content.
TVOD requires users to pay on a per-content basis, providing the flexibility to only pay for the content they choose to watch.

User Experience

With SVOD, viewers enjoy an ad-free streaming experience due to the subscription model.
In contrast, AVOD users have to tolerate periodic advertisements as a trade-off for free content access.
TVOD offers a mixed experience where purchased content is ad-free, but the user must individually select and pay for each piece of content.

Revenue Generation

Revenue in SVOD comes from the regular subscription fees paid by users.
AVOD generates revenue through advertisers who pay to place their ads within the content.
Meanwhile, TVOD’s revenue is derived from individual transactions made by users to access specific content.

How Do CTV and OTT Fit In the Picture?

CTV stands for “Connected TV.” On CTV, content is streamed solely via TV screens that are connected to the internet. CTV streaming devices can include: Rokus, Apple TVs, and Smart TVs.

OTT stands for “over-the-top,” meaning content that comes over your cable box via the internet rather than through a cable or satellite. Content may be watched on any device that has a connection to the internet—mobile, tablets, desktops—but more and more, people are shifting back to the TV screen in their living room.

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SVOD, AVOD, TVOD: Final Thoughts

Compared to a handful of basic cable and network options in the old days, viewership could be seen as fragmenting with so many SVOD, AVOD and TVOD options. On the plus side, however, there’s a captive audience to be found at home watching SVOD, AVOD and TVOD content.

Viewers’ dependency on streaming services has only increased in recent years. That viewership may change with trends favoring one service or another, but the demand has certainly increased and shows no signs of reversing soon.

With a nimble partner, you can conquer the world of OTT and CTV, turning audiences’ hunger for quality content into a performance marketing channel of unprecedented power.

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