This article was contributed by Setplex, a leading provider of highly-scalable, low latency IPTV/OTT solutions.
Cable companies have been offering pay-per-view programming since 1981. The first major PPV event occurred on September 16, 1981, when Sugar Ray Leonard fought Thomas “Hitman” Hearns. Since over fifty percent of subscribers ended up buying the fight, Viacom’s Marketing Director Pat Thompson started to put additional PPV events together. The rest is history.
When subscribers use a PPV service like this, it is an example of a TVOD service. As consumers have the option to either buy or rent content for a specific window of time, the TVOD model delivers a higher percentage of revenue per consumer.
TVOD monetization can be run at the same time as AVOD monetization, ad-based video on demand such as YouTube and Peacock. While AVOD may generate lower revenue than TVOD, it’s very popular today as viewers can watch content for free in exchange for periodic ad interruptions.
Let’s take a deeper dive into TVOD and examine the value of this monetization model.
A modern, online blockbuster
For consumers, the main benefit of TVOD is the ability to purchase or rent content on a pay-per-view basis without the hassle and commitment of a subscription or monthly fee. TVOD platforms typically generate higher revenues as they provide access to the newest movies and TV shows in addition to PPV events that take place in real time like UFC, boxing, and WWE events. Content is always king.
iTunes, Google Movies, Amazon Prime Video, and YouTube Movies are some examples of platforms that are utilizing this model. These platforms are so successful because they offer a diverse lineup of content and entice consumers to make repeat purchases through strategic marketing initiatives. Toensure a high retainment, investments must be made in sponsorships, advertising, promotions and pricing offers.
Utilizing a payment system is also a critical part of in-app purchasing support. For ease of use, publishers should integrate a payment system such as Apple Pay or Google Pay for users to purchase content quickly and easily.
Security is key
TVOD requires access control to manage which users can access content, for how long, and on what devices. While the window for providing premium content is extremely important, so is the protection of this content. Middleware must be implemented to control how many devices a piece of content can be accessed by at the same time.
Also, a robust digital rights management (DRM) solution can control and manage access to copyrighted content. DRM technology can be implemented to ensure monetization is not affected and content is not being pirated. Specific usage rules can also be applied like allowing a limited number of downloads, or views. If you are a publisher with a comprehensive TVOD business model, a DRM component is vital to monitor and enforce user licenses.
Overall, TVOD platforms are a win-win for OTT providers and consumers alike. In addition to security, this monetization model offers flexible content package options and often generates higher revenue per consumer by offering access to exclusive releases and events that are in high demand.
