What Is Video On Demand (VOD)?

Everything you need to know.

Published April 20, 2024
Author Yostream
Share:
video-on-demand (vod)

The Stockholm Syndrome, the 279th episode and the series finale of The Big Bang Theory, aired on May 16, 2019, was watched by 18.52 million worldwide viewers. The American sitcom of 12 Seasons which was aired on CBS, turned astrophysics into a dinner table conversation (obviously with nerd humor!) amassing a huge fan following.

However, other than the quirky antics and intellectual banter of the geeky gang, the world also witnessed an extraordinary winter lasting for way more than just one season. The infinity-esque winter of Game of Thrones eventually started to thaw when Jon Snow returned to Castle Black after stabbing Daenerys and Sansa Stark becoming the King Queen in the North. It was the 73rd episode and the last installment, The Iron Throne, where 19.3 million viewers gathered to bid adieu to a world they’ve lived in and characters they’ve grown to love. The grand finale of GoT which was aired on May 19, 2019, became the most-watched telecast in the history of HBO.

The Era Of Television Broadcasting

The viewer count of both series is impressive but in the end, these numbers take a bow to Lord Rama in reverence. When DD National, the state-owned TV channel of India started rerunning Ramayana during the 2020 coronavirus lockdown in India, no one knew it would shatter all previous records. The episode of April 16, 2020, was viewed by 77 million people setting a world record for the most-watched TV show globally.

Directed by Ramanand Sagar and based on Ramayana (written by Valmiki) and Ramcharitmanas (written by Tulsidas), this TV show was originally aired between 1987 and 1988 at 9.30 am every Sunday on DD National. During that period possessing a television set was not possible for most of the viewers as it was considered an expensive luxury item. From children to old-timers, viewers of different age groups, after identifying the nearest houses of their friends or companions having a TV set, used to reach on time before the show's commencement.

In some areas, due to the lack of transportation, people used to walk several kilometers to watch a cultural phenomenon resonating deeply within themselves. They did everything possible to be present in front of the screen because missing an episode meant being out of the loop.

ramanad-sagar-ramayan

A Simple Explanation Of Video On Demand (VOD)

During the TV broadcasting days, people used to race home to catch their favorite shows feeling major FOMO. However, with the gradual advancement of the Internet and IPTV, viewers were able to enjoy TV shows, films, and other entertaining content according to their convenience and flexibility.

With the arrival of Netflix, Amazon Prime, Apple TV+, Hulu, and similar services, viewers can now select and watch their desired video content whenever they want. Simply put, they don’t have to adhere to rigid broadcast schedules or wait for reruns to catch missed episodes. They can now binge-watch the entire series at their own pace with the facility to pause, rewind, and fast-forward. This technology is called Video on Demand (VOD). It has revolutionized how viewers consume entertainment by giving them more control over what they watch and when they watch it.

Offering unprecedented comfort, VOD services provide a library of content that viewers can access and stream on-demand using internet-connected devices like computers, smartphones, smart TVs, or streaming media players.

vod-facts

A Brief History Of Video On Demand (VOD)

Two crucial technological advancements were instrumental in enabling the establishment of VOD services: MPEG (motion-compensated DCT) video compression and asymmetric digital subscriber line (ADSL) data transmission.

The main objective of MPEG is to create efficient methods for encoding digital audio and video data, allowing for reduced file sizes without significant loss of quality. Some well-known MPEG standards include MPEG-1, which introduced formats like Video CD (VCD), MPEG-2 used in DVD-Video and digital television, MPEG-4 providing efficient compression for multimedia applications, and more recent standards like MPEG-4 Part 10 (H.264/AVC) and MPEG-H for ultra-high-definition video and immersive audio.

ADSL technology allows compressed video pictures and telephone calls to be sent over copper telephone cables at the same time by transmitting the information at different frequencies. Telephone calls are carried at low frequencies as normal, whilst the video data is transmitted at higher frequencies up to about 1 MHz. In addition to video data being sent to the home, provision is made for a return signal from the home allowing the video to be controlled by the viewer (eg. freeze frame, fast forwarding).

mpeg-adsl

In 1992, an American telecommunication company Bell Atlantic (now known as Verizon), partnered with IBM which was then developing a video server (code-named Tiger Shark). In April 1993, their partnership resulted in the first operational deployment of VOD over ADSL in practical environments, delivering 50 simultaneous video streams in Reston, Virginia. This trial allowed customers to access movies on demand using a set-top box.

Using the MPEG compression standards and ADSL technology, a trial VOD service in the United Kingdom was introduced by British Telecommunications (BT). However, it was Kingston Communication that made history in 1998 as the first UK company to roll out a comprehensive Video on Demand (VOD) platform. Not only that, but they were pioneers in combining broadcast television with Internet connectivity via a unified set-top box, all powered by IP delivery over ADSL.

What Are The Different Types Of Video On Demand (VOD) Services?

Focusing on different preferences and needs of users, here are the following types of VOD services:

  1. Transactional Video on Demand (TVOD): TVOD platforms operate on a pay-per-view model, where users pay for each piece of content they access. This can include renting or purchasing movies or TV show episodes individually.
  2. Subscription Video on Demand (SVOD): SVOD subscriptions give users boundless access to a library of content for a fixed monthly or annual cost. Subscribers can stream an unlimited amount of content from the platform during their subscription term.
  3. Advertising-Supported Video on Demand (AVOD): On the free version of YouTube, you can watch movies, listen to songs, and access other video content without paying anything. However, you watch advertisements that play during content playback. This is what AVOD does.
  4. Hybrid Video on Demand (HVOD): Through HVOD, users can access a mix of subscription-based, transaction-based, or ad-supported content on a single platform. This hybrid model caters to diverse viewer needs.

The Arrival Of Netflix And Other OTT Platforms

Following a $40 late fee imposed by a video rental store for returning Apollo 13 past the due date, the customer decides to open his own store. Thus came Netflix into existence. The customer (Reed Hastings) was one of the co-founders with the other being Marc Randolph. Previously, Hastings had co-founded Pure Software, a debugging tool for UNIX software applications, which was acquired by Rational Software in 1997 for $750 million, making it the biggest acquisition in the history of Silicon Valley then. Hastings got the much-needed capital to start Netflix in the same year.

With 30 employees and 925 titles, Netflix was launched as the first DVD rental and sales website. The launch-day traffic resulted in 150 sales other than crashing its server. During the dot-com bubble, the founders decided to sell the company but their offer was turned down saying the asked price ($50 million) was a joke.

They, however, kept struggling and focussed on their DVD rental business before going public on May 23, 2002. By 2005, Netflix was shipping out 1 million DVDs every day with 35,000 films in its inventory. In January 2007, Netflix launched its Video on Demand (VOD) service with 1,000 films available for streaming. By February 2007, Netflix had delivered its billionth DVD, with the milestone being a copy of Babel sent to a customer located in Texas.

Netflix launched its recommendation system Cinematch in 2000, though it continued researching in the area. In 2009, it awarded $1,000,000 to team “BellKor's Pragmatic Chaos” for developing a video-recommendation algorithm that outsmarted Cinematch. In the same year, Netflix’s movie streams outpaced DVD shipments for the first time.

The streaming giant started collaborating with TV networks to extend the lifespan of their shows. For example, in 2010, AMC had considered canceling Breaking Bad after its third season. In the same year, Netflix acquired the rights to this show and did a chemistry better than Mr. White, increasing its viewership exponentially.

House of Cards

With more than 260 million users and available in 45 languages, today Netflix is available in almost every country of the world except China, Crimea, North Korea, Russia, and Syria.

In August 2008, Netflix experienced a major database corruption and it began moving all its data to the Amazon Web Services cloud. After seven years of effort, the cloud migration was eventually completed in January 2016.

On an interesting note, Reed Hastings and Marc Randolph were contacted by Jeff Bezos during the initial Netflix days when the founder of Amazon offered them around $16 million to acquire Netflix. Both denied the offer knowing they were on the brink of something. Much later, on September 7, 2006, Amazon Unbox was launched allowing users to rent or purchase digital movies and TV shows.

In 2008, it was renamed Amazon Video on Demand. Gradually, it became Amazon Instant Video, and later it got its current name - Amazon Prime Video. With more than 200 million users and available in 29 languages across the world except for Mainland China, Cuba, Iran, North Korea, Sudan, Russia, Belarus, Syria, and Vietnam, it generated $40.2 billion in yearly revenue through subscription fees in 2023.

As of 2022, the worldwide OTT market was valued at about $202.5 billion, with forecasts predicting a growth of around $434.5 billion by the end of 2027. It is estimated that by 2029, there will be 6.3 billion global OTT users. It is now clear that OTT platforms have disrupted the traditional TV industry by challenging cable and satellite providers. With a global presence, these platforms provide content access to viewers worldwide, transcending geographical barriers. This fosters the distribution of international content and empowers localization endeavors, such as dubbing and subtitling, to better serve diverse audiences.

Imagine a seamless experience where live events transition into an on-demand library on your favorite live streaming software. Other than creating live stream content and multistreaming to different platforms for maximum audience engagement, some software allows users to stream directly from the browser. They can also leverage it as a trusted platform to discuss movies, TV shows, and other relevant videos through podcasts or candid conversation sessions. They can also make reaction videos to connect with their audience on a personal level.

Explore