Video-on-demand (VOD ) platforms have become a fixture on both the global and Polish internet. The first services appeared in the early 90s, although for technological reasons they looked completely different from those of today and utilized different solutions. In recent years, video-on-demand platforms have seen a dramatic increase in interest, becoming one of the leading ways of consuming film content.
Advertising in VOD
Video on demand offers a vast amount of content available at any time. VOD services offer premieres and classic films, TV series, sporting events, guides, entertainment programs, political commentary, and hundreds of other types of video content. Petabytes of data, to which viewers dedicate millions of hours of their attention annually, offer a fantastic opportunity for advertisers. Marketers can display engaging video ads before or during a film, or as graphical overlays on the content. This also offers enormous opportunities for increasingly precise ad targeting. We can target our messages to specific groups based on location, demographics, devices used, or – through remarketing – to people who have previously interacted with our brand.
The evolution and growth of VOD services has been relatively slow over the years, primarily due to limitations in broadband access. Streaming high-quality films requires a high-speed and stable internet connection, which has only recently become relatively widespread.
Another reason for the moderately rapid rise in popularity was the dominance of traditional television as a medium, especially in the public consciousness. Of course, television companies have, over the years, also become somewhat familiar with this form of distribution, launching their own online platforms and unifying them with the solutions offered by digital television in its various forms.
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VOD and OTT technology
It's worth making a distinction between VOD and OTT. These services are very similar, but they can differ in the mechanics of content delivery. In short, VOD is simply a service that allows content to be played at a chosen time—most often via the internet, although satellite broadcasts also fit this definition. OTT, on the other hand, requires internet transmission, but doesn't necessarily allow users to press "play" at any time. A live online match stream that only takes place at a specific time will therefore meet the definition of OTT, but it cannot be classified as VOD. The difference between the terms is minimal, and the terms VOD and OTT are usually used synonymously.
VOD – monetization models
First and foremost, VOD encompasses a multitude of distribution models that utilize different monetization schemes. These can be divided into several main categories.
SVOD – Subscription VOD
An option used by Netflix, HBO GO, and Amazon Prime, among others, is SVOD, or subscription-based VOD. In this case, for a monthly fee, you have access to the platform's entire library. Another option within the same model is to set up different subscription levels – this way, the cheapest plan will display ads before movies, while more expensive subscriptions will be ad-free. This option is used by the American service Hulu.
Due to the specific nature of this type of solution, advertising possibilities are very limited - in the classic subscription model, in the absence of ads before or during the video, the only available option seems to be product placement in a given work.
TVOD – Transactional VOD
Another model is TVOD, or transactional VOD. In this model, consumers purchase access to a specific product—a film, live broadcast, or any other digital work. The TVOD model, for example, involves purchasing a pay-per-view (PPV ) broadcast of a boxing event or purchasing a single episode of a TV series from player.pl.
They can be classified into two subgroups:
- DTR (download-to-rent) – temporary access to the file, for example for 24 or 72 hours from the date of the transaction.
- EST (electronic sell-through) – theoretically unlimited access to the file, sometimes with the option of downloading the product to disk.
AVOD – a model based on displaying advertisements
The third option is to provide users with free access to the platform's library. This is called AVOD, or advertising-based video on demand . In this case, initiating playback usually involves a set of ads before and during viewing. We can see this, for example, on Telewizja Polska's VOD service or on the world's largest streaming service, YouTube. Many horizontal portals also use this solution, combining text-based content with video to present a single topic.
VOD ads in this format are usually unskippable by viewers, although this isn't always the case. In the most "aggressive" solutions, the user can't even switch browser tabs and focus on something else while the ads are playing – the ads don't offer the option of playing in the background; they must be displayed in the active tab. This inevitably guarantees high viewership for the ads.
Advertisements can also appear within the video itself, in the form of text and image overlays placed directly on the video. These don't cover the entire screen and can be easily dismissed, though they are certainly noticeable. This option is available on YouTube, for example, as overlay ads.
VOD: mixed model
Many services employ a mixed model, where some content is available free of charge, but only purchasing a premium account limits or completely blocks ad display, adding other features, such as the ability to download a movie to a hard drive and watch it offline. YouTube, for example, uses this combination – as users, we have access to the entire library, but only purchasing YouTube Red disables ads. Another model also exists where an account grants ad-free access to some movies via VOD, but watching others requires an additional fee. There are many options – AVOD, SVOD, and TVOD models can be combined in various configurations.
VOD with advertising – disadvantages
It's undeniable that pre- and mid-roll ads are highly irritating. They're often repetitive and played louder than the underlying video, making content consumption difficult. According to research by Wavemaker, the advertising annoyance rate is 61% for YouTube and 63% for other VOD services, while traditional television has reached 62% and cinema ads 46%. While still lower on average than traditional television, the display time of VOD ads is inexorably approaching television standards. The bittersweet marketing truth, however, is that this doesn't have a particularly negative impact on the effectiveness of advertising efforts.
Other drawbacks stem from potential technical issues on some platforms—for example, when a mandatory ad won't play, preventing you from watching the main video, requiring you to refresh your tab and watch the entire ad package again. Fortunately, such situations are becoming less frequent as platforms continually adapt to new standards.
Ad blocking issues seem problematic from a marketer's perspective. Polish internet users are very keen to use browser plugins that help get rid of ads – including on VOD platforms. At the end of 2017, almost every second Polish internet user over the age of 15 used at least one ad blocker. However, most services handle such situations well, forcing the temporary disabling of a given plugin to allow the video to play. As is often the case in the world of technology, every day is a constant race between advertisers and users.
VOD advertising as an effective marketing tool
However, this does not change the undeniable fact that a well-executed VOD campaign is very effective, offering a low cost per conversion and enormous brand exposure.
In terms of reach, the largest platform enabling advertising on various VOD services is Google Display 360 & Video . It allows advertising to be placed without paying commissions to intermediaries, i.e., media houses. The network includes the largest services in Poland, such as player.pl, vod.pl, tvp.vod.pl, and pilot.wp.pl, and thanks to the Google Display Network, which is part of the D&V360 network, it also includes YouTube.
A brief history of the creation of selected VOD services in Poland:
Summary
The above article covers the following topics:
- Introduction to VOD Advertising
- VOD Monetization Strategies
- Disadvantages of the AVOD (Advertising VOD) model
- VOD Advertising: Measurable Benefits
