Is TVoD model the way to go in the OTT space?

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The Covid-19 pandemic, whilst detrimental in many ways, brought about a massive boom in the Indian OTT Sector. With people forced to stay indoors, streaming platforms have captured a majority of the consumer base that was previously reliant on external sources of entertainment.

Subscription Video on Demand (SVoD) format dominates the OTT space – as a consumer, one can pay a subscription fee to access all content on a streaming platform, like Netflix or Disney+ Hotstar. This mode has gained massive popularity, both among service providers and consumers; and encompasses the majority of OTT consumption in India. Yes, convenience is the name of the game – a subscription to a platform implies access to movies and shows anytime and anywhere.

It’s understandable why OTT platforms have become so popular, given the aspect of convenience and the fact that access to traditional entertainment sources such as cinema halls remain restricted due to the pandemic. However, recent evolution in this sector has put us on a new path – that of the Transactional Video on Demand (TVoD) format, wherein one needs to make a single payment for access to a single piece of content. Also referred to as pay-per-view, TVoD can be considered analogous to cinemas in the OTT space.

In March 2020, Disney released its highly anticipated live-action remake of its 1998 hit Mulan on Disney+. Mulan was the first movie on the platform to fall under the TVoD approach, as viewers had to pay a $29.99 fee for premiere access. While the film remained behind this paywall for six months, it was eventually made free for all Disney+ subscribers under the SVoD approach in December 2020.

Mulan and Disney+ give us an interesting perspective about the recent rise of TVoD and its coexistence with the now-traditional SVoD format. Disney replicated the same model with Raya and the Last Dragon in March 2021, and will also do so for the upcoming Marvel films Black Widow and The Eternals, both of which are expected to be box office darlings.

Adopting the TVoD for a six-month span before reverting to SVoD enabled Disney to recoup a significant portion of the revenue it lost due to the pandemic, but more importantly, it amplified the popularity of Disney+ as well. In March 2020, Disney reported a 68% increase in Disney+ subscriptions and a 193% increase in viewership following the premiere of Mulan. This translated to an expense-free earning of $35.5 million for the studio, and also paved the way for other studios and platforms to adopt the TVoD approach in the OTT space. Domestic platforms such BookMyShow Stream (Zack Snyder’s Justice League) and Zee5 (Radhe) also experienced immediate success through their pay-per-view offerings, and have also indicated that this model is here to stay for the near future.

However, the rise of TVoD streaming will inevitably result in other casualties. Considering the philosophy behind this approach is essentially importing the experience of watching premieres in cinema halls minus the overheads, it is a natural assumption that the movie theatre industry will take an unfortunate hit as more OTT platforms co-opt the pay-per-view approach. The extent of this hit is something we can only know in time.