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If you are new to streaming then one one of the things you’ll need to get used to is the terminology. Here’s an explanation on what companies mean when they refer to AVOD, SVOD, and TVOD. Understanding the differences between these will better help you understand what type of service you are actually signing up for.
Some terms are fairly self-explanatory although understanding why they are called what they are can help to understand their purpose. Take “streaming” as an example. Many people already know “streaming” refers to getting video or music over the internet. While that’s correct, what streaming actually means is the continuous flow of data over a connection. When someone watches a movie, the data continuously flows and this keeps the movie playing. The data flows like water does in a stream.
Similar to how people use streaming as a throwaway term, many in the market also often refer to AVOD, SVOD, and TVOD without really explaining what they mean. These are acronyms and again many might already know what the acronym stands for, but here we’ll take a slightly more detailed look at how these approaches affect the consumer.
Table of contents
Summary: AVOD vs SVOD vs TVOD main differences
In this guide we aim to provide a detailed breakdown of what the terms AVOD, SVOD, and TVOD mean. However, if you would prefer a quick overview of the main differences, then here they are. Although keep in mind there are also hybrid models which blur the lines. You’ll have to read all the way through for more information on the hybrids.
|Free||Subscription||Pay per watch|
|With ads||Higher cost||Lower cost|
|Limited features||Unlimited||Wide selection|
|Limited content||More features||Newer content|
What’s AVOD streaming?
AVOD is short for “ad-based video on-demand” although it is also often referred to as “advertising video on-demand.” Either way, the emphasis is on the ad nature of the content. If you’ve ever signed up to a streaming service and were forced to sit through ads either before, during, or after, then you’ve signed up to an AVOD service. That’s in principle anyway as not all AVOD services are created equal.
Technically, a true AVOD service is not just defined by the use of ads but also whether there’s a pay structure involved as well. For example, a true AVOD service will be completely reliant on ads and won’t charge the user anything for access. It will be a free to watch service.
IMDb TV, Tubi and YouTube are all examples of true AVOD services as you just click, watch a few ads, then the show or movie (possibly with some more ads in between) and that’s it. There’s no other costs or requirements involved.
However, not all services operate in this way. Some choose to utilize part of the AVOD model but then combine it with another monetization method. In most cases, these services combine it with the SVOD model.
What’s SVOD streaming?
SVOD stands for “subscription video on-demand.” Unlike the AVOD method, SVOD services are not typically free and instead charge a fee for access. This fee is normally a recurring monthly fee, hence the “subscription” part of the name. While SVODs cost more than AVOD services, they also usually come with unlimited access to all of the content available on the service. In most cases, that also means no ads as well.
In addition, SVODs are also typically richer services with more features and options for the consumer to choose from. Generally, companies tend to pump some of the revenue they generate back into the service to make it even more appealing than before. These additional features are key to maintaining users and that matters when you’re actually expecting someone to hand over money every month for access.
SVOD services are likely to be ones most consumers have already encountered as this tends to be the default model for most content providers when they start out. Netflix and Disney+ are both great examples of an SVOD service as you pay to watch with no ads, and get a ton of extra features as well. Both of these services are also prime examples of a true SVOD service as there’s no other option available other than to subscribe and pay.
In contrast, not all SVOD services are such purists. Instead, some often opt for a hybrid approach. Again, this usually involves combining the AVOD and SVOD methods.
AVOD and SVOD hybrids
As explained, true AVOD services provide access free of charge but show commercials as a means to generate revenue. In contrast, true SVOD services charge for access, but that access is unlimited, unrestricted, and uninterrupted. However, one of the more recent trends in streaming is for companies to combine the two approaches together and this is where tiered plans come in. These tiers allow consumers to choose the way they are going to be monetized by the service.
Hulu’s basic subscription is a great example of an AVOD and SVOD hybrid. The basic service can either be subscribed to for $5.99 per month or $11.99 per month. Technically, there’s no difference between the tiers as they both offer unlimited access to the same shows and movies. The only real difference is the use of ads.
Consumers can opt for the more expensive “No Ads” version and get uninterrupted access to shows and movies or opt to save money each month by sitting through ads before, during and after. Therefore, the No Ads version is a true SVOD service. In contrast, the cheaper version of basic Hulu relies on the AVOD model although it is not a true AVOD service considering users still have to pay a monthly amount. Instead, the cheaper version combines the AVOD and SVOD approaches.
This is also the same method that’s now being used by NBC’s Peacock streaming service. Technically, NBC is looking to hit all of the main tiers as the service is available in three main options. The first is an AVOD version which is completely free to the user thanks to ads. The second is Peacock Premium and this is a SVOD service as it provides ad-free and uninterrupted access for $9.99 per month (or $5 per month if you’re an existing Comcast customer). Then there’s the third Peacock tier which allows users to access Peacock Premium for $5 per month and supplements the price difference through the use of ads – it’s an AVOD and SVOD hybrid.
What’s TVOD streaming?
Lastly, there’s TVOD streaming and this one is a little different to the others. TVOD is short for “transaction video on-demand” and is the easiest one to get your head around. It is simply a service that you pay to directly access specific content. It is a transaction-based service. Unlike the SVOD model where you subscribe and then choose what you want to watch or the AVOD model where you choose what you want to watch and then sit through ads, TVOD services let you pick the exact show or movie, tell you how much it will cost and then you pay to watch the individual show or movie.
Any online store like Google Play Movies where you can rent shows and movies on their own are likely prime examples of a TVOD service as you are paying for direct access, and usually at a lower cost. There’s no unlimited involved, no ads, or anything else. You just pay, watch, and then either pay again to watch something else or exit the service.
That’s the theory anyway. Just like the AVOD/SVOD hybrid approach, companies who have traditionally focused on the TVOD approach are also starting to now offer hybrid services. The most common hybrid approach these services are using today is combining the TVOD method with the AVOD method.
A good example is Vudu. Right now you can head over to Vudu and just rent a show or movie, watch it without interruption and move on. However, Vudu also now lets you watch a selection of titles for free, but “with ads.” This is where the AVOD approach comes in and highlights how Vudu has moved from just offering a TVOD service to also offering an AVOD service.
The bottom line
Now we’ve gone through the various types of on-demand streaming services, you may be wondering which type of service is the best? The answer is, it depends. There is no real winner here as they are simply different methods of accessing the same content and the best one for you will be whichever suits your budget and needs the most. For example:
- If you’re willing to pay a higher price, and on a monthly basis to get unlimited and uninterrupted streaming access then the SVOD approach is likely the one for you.
- If you would prefer to save as much money as you can by sitting through ads, then the AVOD or AVOD/SVOD hybrid approach is the right one for you.
- If you don’t plan on watching lots of content each month and would much rather a pay-as-you-go streaming experience, then TVOD services are right for you.
The reality is, most streamers will bounce between the methods described above by going the SVOD route with their favorite service and then complementing it with an AVOD or AVOD/SVOD hybrid second service. Before finally topping off their monthly streaming with a TVOD service as and when needed.