AVOD, SVOD & TVOD: A Simple Explanation

If new to streaming services, one of the first things you’ll need to get used to is the terminology. For example, companies often refer to AVOD, SVOD, and TVOD. Understanding the differences between these different types of streaming services will better help you understand what type of service you are actually signing up for.

Some terms are fairly self-explanatory, although understanding why they are called what they are called can help to understand their purpose. Take “streaming” as an example. Many people already know “streaming” refers to getting video or music over the internet. While that’s correct, what streaming actually means is the continuous flow of data over a connection. When someone watches a movie, the data continuously flows and this keeps the movie playing.

Similar to how streaming is used as a throwaway term, many in the market also often refer to AVOD, SVOD, and TVOD without really explaining what they mean. These are acronyms and, in the most basic sense, refer to how a service generates revenue.

AVOD, SVOD, TVOD: main differences

In this guide we aim to provide a detailed breakdown of what the terms AVOD, SVOD, and TVOD mean. However, if you would prefer a quick overview of the main differences, they can be seen in the table below. It is worth keeping in mind that there are also hybrid models which tend to blur the line between the different types. In other words, not all services are exclusively either AVOD, SVOD, or TVOD.

What’s AVOD streaming?

AVOD is short for “ad-based video on-demand” although it is also often referred to as “advertising video on-demand.” Either way, the emphasis is on ads. If you’ve ever signed up to a streaming service and were forced to sit through ads either before, during, or after, then you’ve signed up to an AVOD service. That’s in principle, anyway, as not all AVOD services are created equal.

Technically, a true AVOD service is not just defined by the use of ads, but also whether there’s a pay structure involved as well. For example, a true AVOD service will be completely reliant on ads and won’t charge the user anything for access. It will be a completely free to watch service with no other charges or fees involved. IMDb TV, Tubi and YouTube are all examples of true AVOD services, as the user just clicks, watches a few ads, then watches the show or movie (possibly with some more ads during) and that’s it.

As mentioned, not all services operate in this way. Some choose to utilize part of the AVOD model, but then combine it with another monetization method. In most cases, these hybrid type of services will combine the use of an AVOD model with the SVOD model.

What’s SVOD streaming?

SVOD stands for “subscription video on-demand.” Unlike the AVOD method, SVOD services are not typically free and instead charge a fee for access. This fee is normally a recurring monthly fee, hence the “subscription” part of the name. While SVODs cost more than AVOD services, they also usually come with unlimited access to all of the content available on the service. In many cases, that also means no ads as well.

In addition, SVODs are also typically richer services with more features and options for the consumer to choose from. Generally, companies tend to pump some of the revenue they generate back into the service to make it even more appealing than before. These additional features are key to maintaining users, and that’s something that matters when a service is expecting a consumer to hand over money every month.

Many consumers are likely to have already encountered an SVOD service as this tends to be the default model for most content providers when they start out. Netflix and Disney+ are both great examples of an SVOD service as you pay to watch, with no ads, and get a ton of extra features as well. Both of these services are also prime examples of a true SVOD service as there’s no other option available other than to subscribe and pay.

Similar to AVOD, not all SVOD services are such purists. Instead, some often opt for a hybrid approach. Again, this usually involves combining the AVOD and SVOD methods.

AVOD and SVOD hybrids

As explained, true AVOD services provide access free of charge, but show commercials as a means to generate revenue. In contrast, true SVOD services charge for access, but that access is unlimited, unrestricted, and uninterrupted. However, one of the more recent trends in streaming is for companies to combine the two approaches together and this is where tiered plans typically come in. These tiers allow consumers to choose the way they are going to be monetized by the service.

A great example of an AVOD and SVOD hybrid is Hulu’s basic subscription. The basic service can either be subscribed to for $6.99 per month or $12.99 per month. Technically, there’s no difference between these basic Hulu tiers as they both offer unlimited access to the same shows and movies. Although there are some differences in terms of premium features, the real difference is the use of ads.

Consumers can opt for the more expensive “No Ads” version and get uninterrupted access to shows and movies, or opt to save money each month by sitting through ads before, during and after. Therefore, the No Ads version is a true SVOD service. In contrast, the cheaper version of basic Hulu relies on the AVOD model, although even then it is not a true AVOD service considering users still have to pay a monthly subscription cost as well. Instead, the cheaper version is a prime example of a service that combines the AVOD and SVOD approaches.

This is also the same method that’s now being used by a number of other popular streaming services. For example, HBO Max and also NBC’s Peacock streaming service. Technically, NBC is looking to hit all of the main tiers as the service offers three subscriber options. The first is an AVOD version which is completely free, thanks to ads. The second is Peacock Premium and this is a SVOD service as it provides ad-free and uninterrupted access for $9.99 per month (or $5 per month if you’re an existing Comcast customer). Then there’s the third Peacock tier which allows users to access Peacock Premium for $5 per month and makes up the price difference through the use of ads. Again, an example of an AVOD and SVOD hybrid.

What’s TVOD streaming?

Lastly, there’s TVOD streaming and this one is a little different to the others. TVOD is short for “transaction video on-demand” and is possibly the easiest one to understand. TVOD is simply a service that you pay to directly access specific content. It is a transaction-based service. Unlike the SVOD model where you subscribe and then choose what you want to watch, or the AVOD model where you choose what you want to watch and then sit through ads, TVOD services let the user pick the exact show or movie and then charge them to watch the individual show or movie.

Any online store, like Google Play Movies, where you can rent shows and movies on their own are going to be a good example of a TVOD service. There’s no unlimited involved, no ads, or anything else. The user just pays, watches, and then either pays again to watch something else or exits the service. That’s the theory, anyway. Just like the AVOD/SVOD hybrid approach, companies who have traditionally focused on the TVOD model are also now starting to offer hybrid services as well.

The most common hybrid approach these services are now using is the combining of the TVOD method with the AVOD method. A good example is Vudu. Right now you can head over to Vudu and just rent a show or movie, watch it without interruption and move on. However, Vudu also now also offers the option to watch a selection of titles for free, albeit “with ads.” This is where the AVOD approach comes in and highlights how Vudu has moved from just offering a TVOD service to also offering an AVOD service.

AVOD, SVOD & TVOD summary

Now we’ve gone through the various types of on-demand streaming services, you may be wondering which type of service is the best? The answer is, it depends. There is no real winner here as they are simply different methods of accessing the same content, and the best for an individual will be whichever suits their budget and needs the most.

For example:

• If willing to pay a higher price, and on a monthly basis, to get unlimited and uninterrupted streaming access to a variety of shows and movies then the SVOD approach is likely the best option.
• If preferring to save as much money as possible and willing to sit through ads, then the AVOD approach is going to be best. For those willing to meet in the middle by paying a smaller amount and sitting through ads, then the AVOD/SVOD hybrid model is going to be the ideal.
• If you don’t plan on watching lots of content each month and would much rather a pay-as-you-go streaming experience, then TVOD services are going to be the right options.

The reality is, most streamers will bounce between the methods described above by going the SVOD route with their favorite services and then complementing them with additional AVOD or AVOD/SVOD hybrid services. That is, as well as topping off their monthly streaming with a TVOD service, as and when needed.