Introduction
The streaming industry is booming worldwide — including India. Platforms like Netflix, YouTube, Amazon Prime Video, and Disney+ are generating billions using different monetization models.
But how exactly do they make money?
The answer lies in three main streaming business models:
- AVOD (Advertising Video on Demand)
- SVOD (Subscription Video on Demand)
- TVOD (Transactional Video on Demand)
In this article, we’ll break down AVOD vs SVOD vs TVOD in simple terms, compare them, and help you understand which model is best for your business.
1️⃣ What Is AVOD? (Advertising Video on Demand)
AVOD stands for Advertising Video on Demand.
In this model, users watch content for free, but the platform earns money through advertisements.
How AVOD Works
- Users do not pay anything.
- Ads are shown before, during, or after videos.
- Revenue comes from advertisers.
Examples of AVOD Platforms
- YouTube (Free Version)
- MX Player
- JioCinema (Free Section)
- Tubi
- Pluto TV
Advantages of AVOD
- Free access attracts large audiences.
- Easy to scale with high traffic.
- Lower entry barrier for users.
Disadvantages of AVOD
- Requires massive traffic for high revenue.
- Users may dislike ads.
- Revenue depends on advertiser demand.
Best For:
- News websites
- Entertainment portals
- Viral content platforms
- New streaming startups
2️⃣ What Is SVOD? (Subscription Video on Demand)
SVOD stands for Subscription Video on Demand.
In this model, users pay a monthly or yearly subscription fee to access content.
How SVOD Works
- Users subscribe with recurring payments.
- No ads (or limited ads in some cases).
- Unlimited access to content library.
Examples of SVOD Platforms
- Netflix
- Amazon Prime Video
- Disney+
- SonyLIV Premium
- Zee5 Premium
Advantages of SVOD
- Predictable recurring revenue.
- Higher customer lifetime value.
- Premium brand positioning.
Disadvantages of SVOD
- Requires high-quality exclusive content.
- Harder to attract users without strong brand trust.
- Subscription fatigue among users.
Best For:
- Exclusive web series
- Premium educational courses
- Niche streaming platforms
- Strong brand-based businesses
3️⃣ What Is TVOD? (Transactional Video on Demand)
TVOD stands for Transactional Video on Demand.
In this model, users pay for individual content instead of subscribing.
How TVOD Works
- Pay-per-view system.
- One-time rental or purchase.
- Access for limited time (e.g., 48 hours).
Examples of TVOD Platforms
- Amazon Prime (Movie Rentals)
- Google Play Movies
- Apple TV Rentals
- BookMyShow Stream
Advantages of TVOD
- Users only pay for what they watch.
- High revenue per transaction.
- Great for special events or new releases.
Disadvantages of TVOD
- Revenue is not recurring.
- Users may hesitate to pay per content.
- Requires high-value content.
Best For:
- Movie premieres
- Live events
- Webinars
- Online workshops
- Sports events
AVOD vs SVOD vs TVOD: Quick Comparison
| Feature | AVOD | SVOD | TVOD |
|---|---|---|---|
| User Payment | Free | Monthly/Yearly | Per Content |
| Ads | Yes | No (Mostly) | No |
| Revenue Type | Advertising | Subscription | Pay-per-view |
| Example | YouTube | Netflix | Rent on Prime |
| Revenue Stability | Low-Medium | High | Medium |
Which Streaming Model Is Most Profitable?
There is no single “best” model. It depends on:
Choose AVOD If:
- You are starting a new platform.
- You want to grow traffic fast.
- You plan to monetize with ads.
Choose SVOD If:
- You have exclusive content.
- You want recurring income.
- You have a loyal audience.
Choose TVOD If:
- You host premium events.
- You release high-value content.
- You sell courses or masterclasses.
Hybrid Streaming Model (Most Popular Today)
Many successful platforms combine models:
- YouTube = AVOD + SVOD (YouTube Premium)
- Amazon Prime = SVOD + TVOD
- Disney+ = SVOD + Ads Plan
- JioCinema = Free + Premium
This hybrid approach maximizes revenue and user flexibility.
Future of Streaming Business Models
The future of streaming is moving toward:
- Ad-supported subscription plans
- Tier-based pricing
- Live streaming monetization
- Creator-driven paid content
- Regional OTT platforms
In India especially, AVOD is growing rapidly due to price-sensitive audiences, while SVOD dominates in premium urban markets.
Final Thoughts
Understanding AVOD, SVOD, and TVOD is essential if you plan to:
- Launch a streaming platform
- Start an OTT business
- Monetize video content
- Build a tech + media website
To summarize:
- AVOD = Free + Ads
- SVOD = Subscription-based
- TVOD = Pay-per-view
Each model has its own strengths. The smartest strategy today is often a hybrid approach.
FAQs
What is the difference between AVOD and SVOD?
AVOD is free and supported by ads, while SVOD requires a paid subscription without ads.
Is Netflix AVOD or SVOD?
Netflix primarily uses the SVOD model, but now also offers ad-supported subscription tiers.
Which streaming model is best for startups?
AVOD is usually best for startups because it allows faster user growth without charging users.
Can a platform use all three models?
Yes. Many modern streaming platforms combine AVOD, SVOD, and TVOD for maximum revenue.
