As the adoption of the Internet has increased, the number of social media users has shown immense growth, ranging from social media sites like Instagram, Twitter, WhatsApp, and LinkedIn to video-on-demand platforms like Amazon Prime, Netflix, Disney+ Hotstar, etc.

VOD or Video on Demand is a content distribution technology that allows you to access video content, such as TV shows and movies, whenever you want. Essentially, it gives you complete autonomy on how you consume media in the form of videos on your TV, smartphone, computer, or any other device.

Video on Demand doesn't need a satellite or cable connection like regular television. You can watch videos as long as you have the required internet bandwidth. This allows you to play, pause, fast-forward, or rewind a video at your convenience.

This technology has outperformed so well that the Video on Demand Market has shown enormous growth. According to a research report by Astute Analytica, the market will report a CAGR (Compound Annual Growth Rate) of 14.07% during the forecast period of 2023-2031.

How Does Video on Demand Work?

Video-on-demand works similarly to music streaming services like Spotify. A video must first be recorded digitally and stored on a video server to make it available on demand.

Next, the video is compressed and sent to the streaming device through a high-speed internet connection server. The video is then available for instant playback, with you in full control of the video's speed and other features like play, pause, etc.

Ultimately, a large resource of TV shows, movies, and documentaries is pooled into one location for anyone to access. The access is usually tied to a condition, like making payments through subscriptions or watching ads.

Business Model of Video on Demand

There are various business models on which VOD works. The first and most popular model in the United States and India is the Subscription Video-on-Demand (SVOD). In this model, the paid subscriptions give viewers all their favorite content on one platform with no ads or pop-ups.

Other models are Transactional Video-on-Demand (TVOD) which allows users to pay per content they want to consume This model uses a pay-per-view format. Meanwhile, Advertising Video-on-Demand (AVOD) is the only format that allows the user to consume the content for free. To make profits, service providers push advertisements along with the video content user is consuming which makes the profit margins.

Source:- Video on Demand Market