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The arrival of the internet has had a profound impact on video and the way we engage with it. The ability to deliver content over both wired and wireless telecoms networks has opened the door for innovative online services like YouTube, Vimeo and Twitch, as well as Netflix, Hulu, Amazon Video, and many others.
But it has also changed the way we view content: the days of selecting a programme from a handful of TV channels, then waiting a week for the next episode, have gone. Nor do we need to wait for our sporting highlights, with the ability to grab internet clips almost as soon as the action has happened.
We can now watch programmes whenever we want, by streaming them ‘live’ or downloading them for time-shifted viewing later on. The catch-all term for this new generation of entertainment is ‘video on demand’ (VOD). We now get our content when we want, not when a broadcaster/content owner decides to deliver it.
Going over the top (OTT)
The other term you might have heard is ‘over the top’ or OTT, which refers to material that’s distributed directly to viewers over the internet. OTT is a subset of VOD, which also includes cable and satellite services.
Discover how Live Connect turns live feeds into instantly monetisable archive, clips and partner-ready content.
The increasing gravitation towards OTT content simultaneously frees us from cables, geographic restrictions and broadcast schedules, and fundamentally changes the way video is sold, produced and consumed.
For the end user it’s all fairly seamless and invisible, but beneath the technology there are a range of business models that control our access to content. The common acronyms used to describe these different business models applied to online services are SVOD, AVOD and TVOD – or subscription video on demand, advertisement-based video on demand, and transactional-based video on demand.
SVOD – subscription video on demand
SVOD is similar to traditional TV packages, allowing users to consume as much content as they desire at a flat rate per month. Major services include Netflix, Disney+, Amazon Prime Video, Max, Apple TV+ and Paramount+, with the global SVOD market now generating roughly $98 billion a year and Netflix alone passing 325 million paid subscribers in Q1 2026.
With SVOD, there is far greater freedom to opt out, as consumers aren’t tied into a long-term contract. This offers greater flexibility to users, and providers of SVOD are continually challenged with retaining consumers, by providing exclusive new content, aggressive pricing schemes – and probably both.
TVOD – transactional video on demand
TVOD is the opposite of subscription video, where consumers purchase content on a pay-per-view basis. There are two sub-categories, known as electronic sell-through (EST), where you pay once to gain permanent access to a piece of content; and download to rent (DTR), where customers access a piece of content for a limited time for a smaller fee.
TVOD services tend to offer more recent releases, providing rights holders with higher revenues and giving consumers timely access to new content. TVOD services typically retain customers by offering attractive price incentives, so they continue to return in the future.
Examples of TVOD services include: Apple’s iTunes, Sky Box Office and Amazon’s video store. Imagen can provide both subscription and pay-per-view models for your hosted video.
AVOD – advertising-based video on demand
Unlike SVOD and TVOD services, AVOD is free to consumers. However, much like broadcast television, consumers need to sit through advertisements. You can see AVOD in action when watching DailyMotion, YouTube and 4OD, where ad revenue is used to offset production and hosting costs.
Premium content owners rarely use AVOD as it generates lower amounts of revenue than SVOD and TVOD. It’s interesting to note that YouTube has started to move its subscription-based Premium content to an ad-based model, with reports that the service was slow to catch on with users.
What about FAST and hybrid models? The 2026 update
Since this guide was first written, two further models have moved from the margins to the mainstream, and any rights holder thinking about monetisation needs them on the radar.
FAST — Free Ad-Supported Streaming TV
FAST sits somewhere between linear television and AVOD. Viewers tune into curated, scheduled "channels" — but delivered over the internet, on smart TVs and connected devices, free at the point of viewing and paid for entirely by advertising.
The category has scaled rapidly: more than 1,610 active FAST channels are now available across the US, UK, Germany and Canada, and 45% of US connected households watch FAST services regularly. For sports rights holders the shift is especially pronounced, sports-led FAST channels grew 105% year-on-year as fans gravitate toward free, ad-funded alternatives to cable.
Best for: rights holders with large libraries, sports federations looking for reach, and broadcasters wanting to extend the long tail of archive content.
BVOD — Broadcaster Video On Demand
BVOD is the catch-up and on-demand arm of traditional broadcasters, think BBC iPlayer, ITVX, Channel 4 and RTÉ Player. It typically blends AVOD economics with public-service or broadcaster-brand content and is often a critical second window for live sport and news.
Best for: broadcasters extending linear value across digital, and rights holders licensing into national broadcaster ecosystems.
Hybrid models — the new default
The cleanest single takeaway from 2025–2026: the industry has moved from "pick a model" to "run several at once." Netflix's ad-supported tier reached 250 million monthly active viewers by May 2026 and now accounts for more than 60% of new sign-ups in ad-available markets. Disney+, Max and Amazon Prime Video have all followed suit.
Hybrid strategies typically combine:
- SVOD + AVOD tiers: a premium ad-free plan and a cheaper ad-supported one
- SVOD + TVOD windows: early-access pay-per-view, then catalogue inclusion
- SVOD + FAST: a paid flagship service plus free, advertiser-funded channels for reach and discovery
- BVOD + FAST: broadcasters using FAST to extend brand and inventory globally
The business question is no longer which model, it's how you orchestrate them across the same content library without compromising rights, governance or audience experience.
Multiple business models
In practice, there are services that operate with multiple business models. Take Amazon Video and Sky for example: audiences pay a fixed subscription per month for access to a library of content, but brand new movie releases and specific sporting events command an additional fee.
With the popularity of OTT content soaring, it’s likely that business models will change as technology and consumption habits continue to evolve.
Crucially, businesses can develop their own VOD delivery systems by using enterprise video platforms. Imagen provides an award-winning cloud-based platform for distributing large volumes of video content, including B2B licensing for high value broadcast clients as well as B2C consumption by a wider audience. To find out more about how Imagen’s media management and distribution solution can unlock the full potential of your video, talk to us.
Frequently asked questions
What is the difference between SVOD and AVOD? SVOD (Subscription Video On Demand) charges viewers a recurring fee for ad-free access to a content library. AVOD (Advertising Video On Demand) is free or low-cost to the viewer and monetised through advertising. Many platforms now offer both as tiers of the same service.
What is FAST TV? FAST stands for Free Ad-Supported Streaming TV. It delivers linear-style, scheduled channels over the internet, free to the viewer and funded by advertising. It now reaches 45% of US connected households.
Is hybrid the future of streaming? The market has effectively answered yes. Most major platforms now run blended models — Netflix's ad tier alone accounts for over 60% of new sign-ups — and rights holders increasingly orchestrate SVOD, AVOD, TVOD and FAST in parallel.
What is BVOD? BVOD (Broadcaster Video On Demand) refers to the on-demand and catch-up services run by traditional broadcasters, such as BBC iPlayer or ITVX. It typically combines AVOD economics with broadcaster-brand content.
Which VOD model is best for sports rights holders? There's no single answer — most rights holders today run a portfolio: premium live and exclusive content via SVOD or pay-per-view, archive and highlights via AVOD or FAST for reach, and selective TVOD windows for high-value events.
