Premium video on demand (PVOD)

What is PVOD?

PVOD is typically used by many digital over the top (OTT) streaming services online or on cable, and they sell certain video content at a higher price in return for exclusive access to that piece of content. Once the transaction is made, users are able to view the content at their convenience, although the range in how long they have access to the content may differ depending on the platform. Some platforms may enable indefinite viewing, while others provide a time constraint, such as within 30 days after purchase or 48 hours after the video is launched. Generally, streaming platforms apply this model to unreleased or newly-launched movies that have high value and demand. Hence, they provide an alternative to movie theaters and may be the preferred method if users seek convenience.

PVOD content particularly spiked during the COVID-19 pandemic when everyone was in lockdown and movie theaters were not accessible. Since entertainment businesses had to find a way to generate revenue and the majority of the population needed a source of home entertainment, PVODs came in extremely handy during this time, generating a massive success as the number of streaming service users surged.

PVOD vs. SVOD vs. TVOD

Apart from PVOD, subscription video on demand (SVOD) and transactional video on demand (TVOD) are also two widely used monetization models for VOD content. Here are the key differences:

• Subscription video on demand (SVOD) is a subscription-based service where users pay a recurring fee (monthly or yearly) to access a dynamic streaming library. Users who are subscribed are provided access to the entire service and its content unlike PVODs that offer access to one particular video. Streaming services like Netflix and Hulu are well-known SVODs.
• Transactional video on demand (TVOD) charges users on a pay-per-view basis and is only available for one-time views. While PVOD charges users for the purpose of offering earlier access or distributing premium content, TVODs offer a variety of content regardless of the quality. Essentially, PVOD is a variation of TVOD with higher standards and limited content.

SVOD and TVOD providers can choose to add PVOD content on their platforms to drive profitability. The live-action Mulan released on Disney+ is a famous example of a PVOD release that generated major revenues on an SVOD platform. TVOD providers that own exclusive content that cannot be found elsewhere can also charge users extra.

The future of PVOD content

PVOD recently placed itself as a mainstream monetization strategy due to the pandemic. Although the pandemic began to fade away and movie theaters reopened in 2022, the lockdown brought long-tail effects that permanently changed some parts of the consumer lifestyle. Today, streaming services have seamlessly integrated into people’s lives and more viewers prefer to stream movies at home than attending movie theaters. Hence, PVOD content is still of beneficial use, and OTT providers have a chance to capitalize on this trend.

However, the main issue with the PVOD model is that it clashes with movie theater releases. Traditionally, theaters hold priority distribution rights for newly released movies, so OTT providers have no room to promote the early-access privilege. If providers do release in-demand content immediately after the theater does, they might end up cannibalizing revenue and directly stealing from theater sales. In order to avoid such conflicts, OTT providers should time their release wisely by taking advantage of the gap between the theater release and when the film opens up to remaining streaming platforms. This difference of time always exists which is the perfect window to attract the second tier of viewers.

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