Transactional video on demand (TVOD)

What is TVOD?

TVOD is a widely used OTT monetization model where users are charged a one-time fee for a set number of views for an individual title. Online streaming services today employ a variety of pricing models to meet the users’ needs, and TVODs are one option that makes content affordable and easily accessible. With this model, streaming platforms can raise prices for content with higher demand or popularity, which is why it is often used for exclusive content, new releases, or niche offerings that are not readily available on other platforms.

Types of TVOD

There are three subcategories in TVOD that employ different strategies, and platforms can choose which model to use to distribute their content.

Pay-per-view (PPV)

With pay-per-view content, users pay a one-time fee for a single view of a live show, event, or sports program. These shows are usually time-sensitive and scheduled to stream on a set channel and time. PPV models are widely used in combat sports game streaming like MMA or boxing matches. ESPN+ or UFC are examples of channels that offer PPV content.

Electronic-sell-through (EST)

Electronic-sell-through (EST) is a model where users are charged a one-time fee for permanent viewing and access to a piece of content. Content like movies or e-learning courses are often sold through EST models, and music, games, or mobile apps can be on sale using this transaction method. Platforms like Coursera or VUDU sell EST content.

Download-to-rent (DTR)

Download-to-rent (DTR) is when a piece of content is temporarily sold for rent for a one-time charge. When users buy DTR content, they have access to it for a limited period of time, which varies depending on the streaming platform. For instance, channels may give users access to a video for 24 to 48 hours from the moment they start watching the content. Platforms like Amazon Prime Video and YouTube that sell movie rentals often use the DTR model.

Benefits of TVOD

User benefits

• Cost-effective: TVOD allows users to only pay for the specific content they are interested in, so users do not have to incur unnecessary costs paying for recurring subscription fees. This is especially helpful for users who consume content selectively or cannot afford to pay for full-access membership fees as it lessens the burden for them.
• Flexibility & choice: With the TVOD model, there is a wide range of content options available, and users have complete control over which content they believe is worth paying for. Hence, users can curate their streaming experience based on their preferences and what they can afford, which makes it accessible for everyone regardless of their circumstances.

Content provider benefits

• Maximize revenue with exclusive content: TVOD and PPV are handy tools for time-sensitive events like sports programs and channels that distribute premium content. Sports games are one-time events that are mostly watched live at scheduled times, especially for games that have popular teams or players participating. In these games where thousands of viewers are highly anticipating the live broadcast, it makes sense for content providers to charge on a PPV basis and leverage the demand to maximize revenue. The same goes for exclusive or premium content that is not available elsewhere. Providers that own such content can raise prices, especially if it has a high demand.
• Increased reach and engagement: Traditional distribution channels or subscription-based channels may have a limited reach due to high prices or indifference toward the numerous features offered, and only those who are regular members of the content provider bring engagement. On the other hand, with TVODs, users who are not subscribers also end up engaging with the content provider in order to access the desired content, which instantly increases the reach and brand exposure. TVODs also provide users with more flexibility and pricing options which can be beneficial for appealing to a wider range of users and driving engagement.

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