Content Creators Look to Benefit From Rising Subscription Video On Demand (SVOD) Trends and Tools

16 July 2015

As content creators and distributors seek to carve out a new niche in Pay TV, subscription video on demand (SVOD) business models and technology tools are emerging as promising tactics not only to counter consumers’ “cord cutting” behavior, but to identify new, profitable revenue streams.  One of the most promising is Subscription Video on Demand (SVOD) — a business model that increasingly is supplanting transaction-based VOD.

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As content creators and distributors seek to carve out a new niche in Pay TV, subscription video on demand (SVOD) business models and technology tools are emerging as promising tactics not only to counter consumers’ “cord cutting” behavior, but to identify new, profitable revenue streams.  One of the most promising is Subscription Video on Demand (SVOD) — a business model that increasingly is supplanting transaction-based VOD.

This was recently illustrated by the agreement between China VOD provider “You on Demand” and Peng Telecom and Media Group, China’s largest telecom provider.  Both companies have agreed to integrate their offerings to expand their branded consumer products and broadband services.  Vimeo also recently launched the first phase of its new subscription tools for its global VOD transactional platform.  Although Vimeo has been offering content a la carte for sale or rental, creators may now charge fans a monthly subscription fee for unlimited viewing.

Bottom Line: SVOD is an attractive business model that can be adopted by content creators and distributors — and a new generation of tools is facilitating the process.  Once again, collaboration will be an important key to success.

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SVOD Market Projected to Double in Size by 2020

Global over-the-top TV and video revenues will reach $51.1 billion in 2020 — nearly double the $26 billion expected in 2015, according to a new report from Futuresource Consulting. The US will remain the dominant territory – with over-the-top (OTT) TV and video revenues rising by $16.6 billion between 2010 and 2020 to $19.1 billion. China’s OTT TV and video revenues will rocket from just $40 million in 2010 to $2,815 million in 2020 – to push China up to fourth place in the world rankings.

SVOD will become the largest revenue source in 2020, overtaking OTT advertising. SVOD will add $14 billion between 2014 and 2020, with advertising on OTT sites up by nearly $12 billion.  The report forecasts 249 million SVOD homes by 2020, up from an expected 117 million by end-2015. SVOD revenues will soar from to $7.6 billion in 2014 to $21.6 billion in 2020.

OWNZONES, an ad-free, subscription-based digital content creator and aggregator launched its channel creation and content syndication tools, in conjunction with 10 partners. By using an embed code on their site, content creators can upload video, audio and text, conveniently curating a portion or all of their content in one place.

Offering a seamless experience to users, all content will look and feel native to content creators’ sites, with special integration available for WordPress, Drupal or any popular content management system. OWNZONES will also handle all back-end processes including payment management, reporting and customer support.

“Our solution is essentially a white-label option for any content creator, be it an aspiring YouTube star or major news organization,” said Dan Goman, Founder and CEO of OWNZONES. “Anyone can set up their channel on OWNZONES and syndicate anywhere for free, lifting the typical hurdles of syndication, including complicated code and costs associated with storage, paywalls and back-end operations.”

For its part, Vimeo introduced the first phase of its new subscription tools for Vimeo On Demand, the largest open transactional VOD platform worldwide. Now in addition to offering content a la carte for sale or rental, creators can choose to charge fans a monthly subscription fee for unlimited viewing. The new subscription tools are one more way Vimeo empowers creators to earn revenue by selling directly to fans, instead of relying on so-called “interruptive advertising”.

“Subscription video on demand (SVOD) is a natural extension of Vimeo’s transactional VOD platform, giving creators a new way to sell content to viewers worldwide,” said Kerry Trainor, CEO, Vimeo. “Online video is entering an exciting new stage where creators don’t have to rely on pre-roll advertising alone to earn money, and Vimeo is building the open global platform for paid video distribution.”

These moves make sense given the findings of a new Leichtman Research Group study: 56 percent  of all US households have at least one television set connected to the Internet via a video game system, a smart TV set, a Blu-ray player, and/or a stand-alone device — up from 44 percent in 2013.   These and other initiatives are designed to help content creators sell directly to consumers, which boosts their revenue without the need for advertising.

Connected TVs are fueling growth in Internet-delivered video to the home.  Leichtman recently noted that 27 percent of all households have a TV set connected via one device — and 29 percent of households are connected via multiple devices — up from 17 percent in 2013.

Along with the increase in connected TV households and devices, there has also been an increase in watching Internet-delivered video on the TV set. Overall, 29 percent of adults watch Internet-delivered video via a connected TV at least weekly, compared to 17 percent in 2013.  Among Netflix streaming video users, 85 percent say that they watch Netflix on a TV set.

Sources:

http://www.leichtmanresearch.com/press/052715release.html

http://www.businesswire.com/news/home/20150616006391/en/Research-Markets-Global-OTT-TV-Video-Forecasts#.VYMZC_lViko

http://www.prnewswire.com/news-releases/ownzones-enables-content-creators-of-any-size-to-easily-launch-their-own-subscription-on-demand-channels-300099196.html

http://www.prnewswire.com/news-releases/jeff-bronikowski-named-president-of-tribeca-shortlist-subscription-video-on-demand-service-300089188.html

http://www.prnewswire.com/news-releases/you-on-demand-and-dr-peng-group-expand-partnership-with-bundled-service-offering-300100604.html

http://www.prnewswire.com/news-releases/uk-video-sector-moves-to-the-next-level-futuresource-consulting-507576671.html

http://www.prnewswire.com/news-releases/vimeo-introduces-subscription-video-tools-for-creators-300092234.html

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