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SVOD vs TVOD vs AVOD vs HVOD: Video Monetization in VOD Explained

Today’s OTT market is not just about VOD or linear. Selecting the best content delivery system hinges on a blend of models.
February 13, 2024
13-Minute Read

The OTT or streaming video market is rapidly transforming the entertainment industry. The global OTT market is projected to reach US $325 billion by 2024 and $420 billion by 2028. This growth reflects a shift towards more personalized and diverse viewing experiences and increased user numbers. Understanding the nuances of various monetization strategies and insider terms, like SVOD, TVOD, AVOD, FAST and HVOD, becomes essential for success and planning out your video strategies.

In this blog, gain insights into the evolving landscape of video monetization and make informed decisions for your content strategy.

SVOD vs TVOD vs AVOD vs HVOD: choosing a model to monetize your content delivery

Today’s OTT market is not just about VOD or linear. Selecting the best content delivery system hinges on a blend of models. While SVOD (subscription video on demand), TVOD (transactional video on demand) and AVOD (advertising-based video on demand) offer distinct benefits, the emerging trend is the adoption of hybrid models, also known as HVOD (hybrid video on demand). This approach caters to varying consumer preferences and broadens revenue streams. Leading services now often incorporate ad-supported tiers alongside their subscription offerings, highlighting the importance of a flexible, hybrid model in modern streaming.

HVOD stands as a versatile and innovative model combining elements of SVOD, TVOD and AVOD. This hybrid approach enables platforms to offer a mix of subscription-based content, pay-per-view options and ad-supported programming, catering to a diverse audience and maximizing revenue opportunities. It is particularly relevant in today's market where consumer preferences are diverse and demand flexibility.

To delve deeper into the intricacies of monetizing content delivery, let's explore the primary business models and distribution models available in the OTT market.

Primary business models

FAST (free ad-supported TV): The FAST model offers programming for free, monetized through advertising. FAST services provide both linear channels and on-demand options at no cost to viewers.

Subscription-based: Often referred to as SVOD or subscription video on demand, this familiar model involves charging a subscription fee for access to content, which can include live events, on-demand shows and linear channels. The content can be either ad-free or ad-supported.

Transactional: Referred to as TVOD or transactional video on demand, this pay-as-you-go model enables users to pay for each piece of content they consume, be it a movie, TV episode or live event.

Distribution models

On-demand: This method delivers programming available on demand and may include ads. It's a versatile approach that can be integrated into free or subscription-based business models.

Linear: The linear streaming channels are often featured in FAST services. They function as a feature or delivery mechanism rather than a standalone business model. As subscription services expand, these linear channels become more integrated into their platforms, moving beyond just FAST channels.

The selection of a monetization model depends on understanding the audience's preferences, the nature of the content and the business objectives. The rising popularity of HVOD, along with established models like SVOD, TVOD and AVOD, offers content providers a range of strategies to effectively reach and monetize their audience.

What is HVOD or hybrid video on demand? 

An emerging concept, HVOD or hybrid video on demand represents a forward-looking evolution in the OTT market, integrating various monetization models to provide a versatile and dynamic viewing experience. This innovative approach amalgamates SVOD, TVOD, AVOD and FAST elements within a single platform, thereby addressing the diverse preferences of a broad audience spectrum.

The rise of hybrid models is reshaping the future of content delivery, as they allow platforms to cater to different viewer segments simultaneously. For example, a service might offer a subscription-based model (SVOD) for its extensive content library, incorporate pay-per-view options for exclusive releases (TVOD) and provide free, ad-supported content (AVOD and FAST). This multifaceted strategy enhances user choice and convenience and significantly expands the platform's potential revenue streams.

As the OTT market evolves, the trend towards HVOD is becoming increasingly apparent. This model is being recognized as the future of content streaming, offering a balanced blend of monetization strategies that align with the digital era's shifting consumption patterns and economic models. By embracing HVOD, streaming services are well-positioned to adapt to market dynamics, thereby ensuring long-term sustainability and growth in the competitive world of digital entertainment.

Video industry trends for 2024

What is SVOD or subscription video on demand? 

SVOD or subscription video on demand represents a primary business model in the OTT market. It involves charging a recurring subscription fee for access to a comprehensive content library. The SVOD model is not limited to on-demand content but increasingly includes linear programming and supports ad-supported options. The services blend diverse content offerings under a single subscription umbrella, including live events, series, films and more.

Monetization with SVOD is most effective when there is a diverse content library capable of attracting and retaining a substantial subscriber base. It suits platforms aiming for long-term customer relationships and a steady revenue stream. 

Let's explore both the major benefits of monetizing with SVOD and the key components of implementing a successful SVOD strategy.

Key benefits of monetizing with SVOD

Steady revenue stream: SVOD provides a predictable and regular income from subscription fees, which is crucial for long-term financial planning and stability.

Builds brand loyalty: By offering a wide range of quality content, SVOD helps build a loyal subscriber base that values the service's continuous content offering.

Targeted marketing opportunities: Access to subscriber data enables SVOD platforms to offer personalized viewing experiences and targeted marketing, enhancing user engagement.

Enhanced customer insights and data utilization: SVOD platforms gain access to in-depth customer data, allowing for more nuanced insights into viewer behavior. This information is crucial for tailoring content offerings, improving the user experience and making informed decisions about future content and feature development. The data-driven approach enhances viewer satisfaction and informs strategic decisions that can lead to increased subscription rates and viewer engagement.

Implementing a successful SVOD strategy

Develop a diverse content library: Focus on creating a broad range of appealing, high-quality content to cater to diverse interests and preferences.

Optimize pricing models: Design competitive subscription pricing and tiered plans to attract different audience segments, contributing to a higher average revenue per user (ARPU).

Enhance user experience: Provide a seamless, user-friendly platform with personalized features and recommendations to increase viewer retention.

Leverage marketing and partnerships: Employ targeted marketing strategies and form strategic partnerships to expand reach, enhance content offerings and utilize customer data for tailored user experiences.

Focus on ARPU as a key metric: Rally the organization's various teams, including programming, product, ad sales and UX, behind metrics affecting ARPU. Consider it the 'north star' for assessing and enhancing the profitability of each subscriber over time.

The SVOD market, a significant segment of the OTT landscape, continues to thrive. This growth is driven by an increasing preference for on-demand content access and the rise of diverse streaming platforms. As of 2023, the SVOD market is highly competitive, with key players like Prime Video, Netflix, Hulu and Disney+ leading the pack. These platforms invest heavily in original content and technological advancements to enhance the user experience and maintain market dominance. Despite market saturation and subscription fatigue challenges, the SVOD market's future looks promising, with continuous innovations and strategic expansions shaping its trajectory.

What is AVOD or advertising-based video on demand and free ad-supported TV (FAST)?

AVOD or advertising-based video on demand has evolved beyond its traditional definition of offering free, ad-supported access to on-demand content. Today, AVOD also encompasses ad-supported tiers within subscription services, balancing lower subscription fees with advertising revenue. This redefined AVOD model often results in higher average revenue per user (ARPU) than ad-free plans, making it a win-win for viewers and platforms.

There are many benefits of implementing AVOD, including:

Increased revenue potential: Ad-supported tiers can lead to higher ARPU than subscription-based models.

Wider audience reach: Offering a lower-cost subscription tier can attract a broader range of viewers.

Flexibility in content offering: AVOD allows for a diverse content strategy catering to free and paying subscribers.

FAST or free ad-supported TV, offers a similar ad-based revenue model but primarily focuses on providing linear, scheduled programming alongside on-demand options, all at no cost to the viewer. 

There are many benefits of implementing FAST, including:

Broader audience engagement: Free access to content attracts a wide viewership.

Familiar viewing experience: Similar to the traditional TV viewing experience, appealing to audiences accustomed to linear programming.

Ad revenue generation: Efficient ad placement in linear and on-demand content generates substantial revenue streams.


It's important to note the difference between FAST and AVOD. While both use advertising to generate revenue, they differ fundamentally. FAST focuses on providing free content, including both on-demand shows and linear channels, making its revenue solely from ads. AVOD, however, is more about the delivery method, offering on-demand shows and movies monetized through advertising and can be a part of a broader service that may also include subscription elements.

Understanding these distinctions is crucial as the industry trends towards hybrid models, blending subscription-based, ad-supported and transactional content to cater to diverse audience needs and enhance profitability.

When to monetize with AVOD and FAST?

Monetizing with AVOD is a strategic choice for platforms seeking a more affordable subscription option while maximizing revenue through targeted advertising. The AVOD model is ideal for services looking to expand their user base and is especially effective when ARPU from ad-supported tiers surpasses that of ad-free plans.

Monetizing with FAST is optimal when targeting a broad demographic seeking free content with the familiar experience of traditional TV. It is especially suitable in markets with high engagement in ad-supported content and for linear programming.

What is TVOD or transactional video on demand? 

TVOD or transactional video on demand is a key component of the OTT market, characterized by a pay-per-view model that allows users to pay for individual access to specific content. This model primarily includes electronic sell-through (EST), download-to-rent (DTR) and pay-per-view (PPV).

EST allows viewers to purchase and permanently own content, whereas DTR provides rental access for a designated period. PPV, another crucial element within the TVOD framework, is designed explicitly for one-time events like sports matches, concerts or special live broadcasts, allowing viewers to pay for single-event access.

As the digital content landscape evolves, TVOD adapts by offering these flexible, transactional options, catering to consumers seeking exclusive, high-value content on a one-off basis. This model’s adaptability makes it a vital choice for viewers interested in specific content without the commitment of a regular subscription.

Key benefits of transactional video on demand

Premium content accessibility: TVOD platforms excel in offering access to newly released or exclusive content, attracting viewers willing to pay for individual titles.

Flexible viewing options: With EST and DTR models, TVOD caters to different viewing preferences, whether owning a title or renting it for a one-time watch.

Direct revenue per transaction: TVOD generates direct revenue from each transaction, making it a lucrative model for high-demand, premium content.

Tailored content offerings: TVOD services can focus on niche markets or specific content types, catering to targeted audiences with specific interests.

Examples Of TVOD platforms

Prime Video: It offers a mix of subscription-based streaming and individual movie and TV show purchases or rentals.

Apple TV App (formerly iTunes): With the transition from iTunes, the Apple TV App now serves as a unified platform for purchasing or renting movies and TV shows.

Vudu: A popular platform for renting or purchasing a wide range of movies and TV series.

Redbox: Known for its DVD rental kiosks, Redbox offers digital TVOD services for movie rentals and online purchases.

Other VOD monetization models

Besides HVOD, SVOD, TVOD, AVOD and FAST, the OTT space is witnessing the emergence of additional innovative monetization models and more acronyms, each tailored to specific market needs and viewer preferences. 

PVOD or premium video on demand

Representing a significant shift in how new movies are released, PVOD or premium video on demand offers an alternative to traditional theater debuts. This model allows consumers to access new film releases from their homes, often concurrently with or shortly after their theatrical release, typically at a premium price. PVOD became especially relevant when physical access to movie theaters was limited, providing a practical solution for studios and distributors to release new films.

It is important to note that PVOD is commonly found within subscription-based services. This integration allows these platforms to offer the latest movie releases as an added value to their existing subscription offerings. Subscribers of these services can enjoy the convenience of watching new blockbuster movies at home without waiting for the traditional post-theatrical release window. Adding PVOD to subscription services enhances the viewer experience by providing early access to new content. It helps the platforms differentiate their offerings and add a new dimension to their revenue models.

PVOD has become a key feature in the evolving landscape of subscription-based streaming services, reflecting a broader trend toward flexibility and immediacy in content consumption.

BVOD or broadcaster video on demand

This model represents the digital extension of traditional broadcasting networks into the online streaming space. It allows viewers to access internet content from established TV channels and networks. This model often combines elements of SVOD and AVOD, providing access to a mix of free, ad-supported content and premium, subscription-based offerings.

Broadcasters leverage BVOD to reach a wider audience, particularly those who prefer digital platforms over traditional TV. This model enables traditional TV networks to stay competitive in the rapidly evolving media landscape, offering their content libraries to a broader, internet-savvy audience.

Now let’s explore the pricing incentives that can be provided for the viewers. 

Pricing incentives for content delivery system

Pricing incentives are crucial in attracting and retaining subscribers. These incentives offer value to viewers and serve as strategic tools for content providers to maximize their reach and revenue. Below are some of the key pricing strategies employed in the industry.

Free trials

Offering free trials is a powerful way to introduce potential subscribers to a streaming service. This approach allows users to experience the full range of content and features without an initial financial commitment, effectively showcasing the value of the service. Free trials are particularly effective for building trust and demonstrating the platform's relevance to users' preferences. They often lead to higher conversion rates as trial users become more inclined to subscribe once they taste what's available.

Free trials provide an opportunity for platforms to collect valuable data on user behavior and preferences during the trial period. This data can then be used to further personalize the user experience and tailor content recommendations, ultimately increasing engagement and retention rates. Additionally, offering extended free trial periods or partnering with other brands to provide exclusive perks during the trial period can further entice potential subscribers and differentiate the service from competitors.

Basic “freemium” model

A prevalent strategy in the OTT space, the 'freemium' model involves offering a basic version of a streaming service for free while providing a more feature-rich premium version at a cost. This approach effectively lowers the barrier to entry, attracting a wider audience base. It is an excellent means for platforms to showcase their value proposition and gradually encourage free users to upgrade to the paid, premium service, which typically includes a more comprehensive and ad-free experience.

In some scenarios, FAST services might incorporate elements of the freemium model, enhancing their offerings with features accessible through user registration. The additional features can include a watchlist, resume-watching capability and personalized recommendations. This approach establishes a value exchange where users provide their data in return for a more tailored viewing experience.

By collecting user data, FAST platforms can offer more personalized content, increasing viewer engagement and potentially higher advertising CPMs (cost per mille). This strategy improves the user experience and enhances the platform's ability to generate revenue through targeted advertising, making it a win-win for both the service provider and the audience.

Tiered pricing model

Offering different service levels at various prices, the tiered pricing models caters to a wide range of consumer needs and budgets. For example, a basic tier might provide standard-definition streaming on one device, while higher tiers could offer features like high-definition streaming, access to exclusive content and multi-device streaming. This model allows platforms to accommodate budget-conscious viewers and those seeking premium features, enhancing overall market appeal and revenue potential.

These pricing strategies are instrumental in differentiating a streaming service in the crowded OTT market. By effectively employing these incentives, platforms can expand their user base and maximize their revenue potential through increased subscriptions and viewer loyalty.

Netflix implements this model exceptionally well with three video plans starting as low as $5.99 per month (with ads). Depending on the plan, users can gain access to higher-quality video (including 4K ultra high definition) and family-friendly features, such as the ability to stream on up to four devices simultaneously. 

Monetization market trends

The OTT market is evolving rapidly, marked by significant growth in various segments. Understanding these trends is essential for content providers and platforms aiming to stay competitive and capitalize on emerging opportunities.

The subscription video-on-demand (SVOD) market has seen remarkable growth, with revenue more than tripling between 2017 and 2022, from $25 billion to $99 billion. This surge is propelled by consumers' increasing preference for on-demand content and the proliferation of diverse streaming platforms. The SVOD market is set to continue its upward trajectory, with forecasts predicting revenue to exceed $124 billion by 2028. This growth indicates a sustained consumer appetite for subscription-based content access, making SVOD a cornerstone of the OTT market.

The free ad-supported streaming TV (FAST) and advertising video on demand (AVOD) markets are expanding rapidly. The global ad revenue of FAST services is projected to grow threefold to $18 billion by 2028. This increase is a testament to the growing acceptance and popularity of ad-supported models, offering free content to viewers.

Similarly, the AVOD market is experiencing significant growth, with worldwide revenue expected to reach $67.40 billion by 2028. The number of AVOD users is also rising, projected to reach 3.6 billion by 2028. This growth underscores the effectiveness of ad-supported models in attracting a broad audience and generating substantial revenue through digital advertising.

The transactional video-on-demand (TVOD) market maintains its relevance and popularity. The projected worldwide market volume for TVOD is $13.24 billion by 2028. The United States is expected to be the highest revenue generator in the TVOD market, emphasizing the continued consumer demand for on-demand, premium content. The TVOD market benefits from its flexibility, allowing users to access specific content on a pay-per-view basis, which is especially attractive for exclusive or high-value content. 

The emergence of HVOD

The HVOD market is emerging as a formidable force in 2024, showcasing the industry's adaptation to the evolving demands of viewers. In 2023, Netflix and Disney embraced the HVOD trend and in 2024, Prime Video and TelevisaUnivision joined, highlighting a clear movement toward hybridization. This model's growth is driven by its ability to combine subscription fees, ad revenue and free ad-supported content, offering a comprehensive revenue stream that caters to a diverse consumer base. As platforms navigate market saturation and subscription fatigue, HVOD stands out as a strategic solution that balances growth with the need for sustainable revenue models, offering flexibility, enhanced content accessibility and a response to dynamic market shifts.

These market trends highlight the dynamic nature of the OTT industry. Platforms that can adapt to these trends and offer a mix of SVOD, AVOD, FAST, TVOD and HVOD services are well-positioned to succeed in this evolving landscape.

Choose the best monetization model 

In the rapidly evolving landscape of the OTT market, the time for action is now. The trends in SVOD, AVOD, FAST and TVOD markets point towards a future rich with opportunities for innovative content delivery and monetization strategies. As consumer behaviors shift and technology advances, there has never been a more opportune moment to launch or expand your streaming service.

To thrive in this competitive environment, embracing a hybrid model that integrates various content delivery systems is crucial. Whether it's subscription-based services, ad-supported platforms, transactional models or a combination, the key to success lies in offering diverse and flexible viewing experiences that resonate with your audience.

At Harmonic, we're at the forefront of OTT video solutions, equipping you with the tools to navigate this complex market. Our VOS®360 Media SaaS platform stands as a testament to our commitment to quality, enabling you to deliver streaming content with unparalleled ease and excellence.

With VOS360 Ad, our innovative, cloud-based server-side ad insertion (SSAI) SaaS, we offer a targeted addressable advertising solution capable of scaling to millions of concurrent viewers. Whether it's for live sports streaming, linear, VOD, FAST, IPTV or low-latency live applications, VOS360 Ad SaaS provides best-in-class ad delivery, ensuring that your content reaches the right audience at the right time.

Now is the time to make your mark in the digital entertainment industry. Contact us today for expert guidance and support in launching or enhancing your streaming service. Let us help you turn these market trends into opportunities for growth and success.


How can I determine the best monetization model for my streaming service?

Understanding your target audience, content type and business goals is critical. Consider a hybrid model that combines various strategies like SVOD, AVOD or TVOD to cater to diverse viewer preferences.

What are the advantages of using a hybrid (HVOD) model?

HVOD offers flexibility, allowing you to reach a wider audience by combining subscription models, ad-supported content and pay-per-view options, enhancing user choice and revenue potential.

Can AVOD be part of a subscription service?

Yes, AVOD has evolved to include ad-supported tiers within subscription services, offering a more affordable option to viewers while increasing the Average Revenue Per User (ARPU).

What is the significance of ARPU in streaming services?

ARPU measures the profitability of each subscriber over time. It's a crucial metric for assessing the financial health of your streaming service and guiding strategic decisions.

How can Harmonic's video products enhance my streaming service?

Harmonic provides advanced streaming solutions that ensure high-quality content delivery, optimal user experience and the flexibility to adapt to various monetization models, making it easier to navigate the OTT market.

Allan Nicholson is Head of Advertising Solutions at Harmonic. He provides business development and strategic direction for the company’s SaaS platform with a focus on advertising technologies. Allan joined Harmonic after 24 years in video services, running product, architecture and complex cross-platform digital ad ecosystem teams.

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