Subscription System (SVOD/SLIVE)
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Subscription Model vs. Transactional Sales Model. What's better for ConnectedTV?

Transactional Sales Model

Since OTT / ConnectedTV Platforms are not set up to “download” videos to the customer’s devices, but to stream in real-time from servers, transactional sales is always a pay-per-view or rental (a viewing permission with expiration) on OTT platforms. Most ConnectedTV devices, such as Roku, FireTV or AndroidTV do not even have a hard drive which could store downloaded video files. Instead everything has to be streamed from servers every time. Amazon Prime, iTunes and other video rental stores have built TVOD (or transactional sales stores for streaming videos), but have invested millions into building them.

While it is possible to build video rental stores and connect them to OTT / ConnectedTV apps, such as your Roku, FireTV and AndroidTV apps, it may not be feasible and cost-effective for anything less than 1000+ video assets for sale in the store + a significant marketing budget to generate the needed revenues to recover the initial investments.

That said, once your video rental store on the website is live, it may be worth looking at the possibility for your website developer to write the needed APIs in order to connect your website’s video rental store (with its customer accounts and database which stores the purchased assets) with your TV Apps. We will be more than happy to help consult you on that and give you a quote on integration costs with the TV Apps. 

In the meantime, it may be interested to take another look at the advantages of recurring revenue (Subscription Models). 

 

Subscription Models

The reason for why subscription models have become so popular and successful is simply that they have advantages for both publishers/producers and viewers/subscribers. Subscribers receive access to more content without having to make multiple purchases, they feel part of a community, and often prefer to pay a smaller fee monthly, than a larger fee one time (or every time they are asked to buy the next season). 

At the same time Publishers/Producers receive recurring, reliable revenue - even from subscribers who may forget about their subscription, not have time to use it much (thus using no bandwidth), but still keep on paying every month. We all know this from our own lives. It is what makes the subscription model so interesting to Publishers. Due to the accumulation effect, recurring subscription revenue grows over time continuously and recurring revenue in general is the most valuable factor in this line of business.