It wasn’t long ago when MTV video jockeys teased a future in which music fans would be able to pull up their preferred music video by simply touching a screen. Video on demand technology quickly developed soon thereafter, leading to today’s world of subscription video content that is all accessible with a simple click of a button.
As time progresses, more people are now cutting the cord on cable in favor of subscription video services, like Netflix and Hulu.
Subscription Video On Demand Is Mutually Beneficial
Empowering consumers to subscribe to the video services they prefer is beneficial to both viewers and entertainment providers. Businesses favor the subscription video model in the context of lead gen vs demand gen as it provides an invaluable opportunity to connect to those most interested in the company’s value offering.
Consumers favor subscription video as it is a more affordable means of tuning into the specific content they crave. The end result is advertisers directly connecting to a target audience through on demand video content. Such exposure generates substantial demand for advertised products, services and other value offerings.
SVOD Is Here To Stay
Though linear TV and cable might not ever be completely phased out of existence, it is becoming increasingly clear that SVOD will likely continue to steal more market share.
SVOD’s rise to success started back in 2007 when Netflix launched its online streaming service. However, Netflix isn’t the only player in town. SVOD power players now include Max, Disney+ and Amazon Prime Video.
SVOD has become so successful that it now accounts for more than 40% of the OTT market’s aggregate revenue.
Why Is SVOD So Popular?
Take a close look at SVOD platforms and you will find a recurring theme: the majority of the content consists of TV shows and movies. Viewers tend to gravitate toward movies and their favorite TV series, incentivizing SVOD to prioritize these two entertainment categories. However, SVOD is gradually expanding to additional types of content such as sports, faith, animation and music specials.
SVOD specialists are even carving out profitable niches such as education. The primary advantage of specializing video content is that it provides an invaluable opportunity to bridge the gap between target customers and businesses that desire to advertise their products/services to those unique groups.
The bottom line is it is not economically efficient to advertise on TV to the masses when SVOD makes it possible to quickly and affordably zero in on those who are most likely to pay for a business’s advertised product or service.
SVOD Provides Consistent Revenue
Business is all about generating demand and meeting that demand with sufficient inventory at a fair price. SVOD is growing in popularity among business owners and advertisers as it generates demand to provide a consistent stream of revenue. Though few know it, SVOD is financially successful to the point that it rakes in nearly two times as much revenue per individual than comparable traditional services.
The SVOD business model centers on each viewer paying a fixed flat subscription fee. The ensuing generation of revenue makes up the difference that is typically generated by traditional commercials. However, not all SVOD content is completely ad-free. This entertainment niche is evolving, providing new opportunities for businesses and advertisers to present their message to target audiences.
Consumers Will Continue To Favor SVOD
Take a moment to adopt the perspective of a consumer. Instead of paying an egregiously large amount of money for cable TV on a monthly basis, the better option is to pivot toward SVOD. There is no pressure on the viewer to lock into a lengthy contract as the SVOD subscription can be canceled when desired.
Add in the fact that SVOD content offerings are expanding and the extensive range of entertainment accessible to viewers becomes more appealing with each passing day.
Change Is The Only Constant
Some SVOD services such as Netflix have transitioned to tiered pricing in which ads are displayed prior, during or after content. The ad revenue model of SVOD will continue to change as time progresses, providing businesses and advertisers with an effective means of connecting with target customers.
The exclusivity of SVOD content combined with the premium quality of that content will steer loyal subscribers to these platforms. Factor in the flexibility of SVOD pricing and you have the perfect opportunity for businesses to connect with desired users for an immediate impact.
Stay tuned as SVOD continues to take shape and fulfill its potential. The technology will continue to serve as the premiere bridge to connect businesses with viewing audiences eager to engage with their products and services.