PVOD, the future of the film industry?

We recently wrote that in the last two years, the adoption of streaming services has skyrocketed dramatically and this has given rise to the emergence of new hybrid monetization models in the main OTTs and a greater willingness of service providers to experiment with these models.

The term PVOD (Premium Video On Demand) refers to the Premium version of TVOD (Transactional Video On Demand) which refers to exclusive content, generally exclusive movies that are only accessed on one platform with an additional payment to the membership. This monetization model began to take hold with the closing of movie theaters at the beginning of the pandemic.

The constant confinements and unconfinements due to the pandemic have significantly affected the film industry. According to Forbes, if in 2019 the industry generated $42.3 billion in sales, in 2020 this only reached $12 billion. A spectacular fall.

Although the film industry had a drop of those globally, digital entertainment grew by 31%. People searched for where to consume content and found it on streaming and OTT services like Netflix, Hulu, Amazon Prime Video, and Disney +, among others.

That is why the main players in the sector are looking for formulas to supplement the income from the sale of movie tickets and stopping delays in film titles in which they have already invested time and money.

One of the most relevant has been Disney +, which implemented 'Premier Access', a type of Premium VOD in which it has launched its latest titles such as 'Mulan', 'Cruella', 'Raya and the Last Dragon', 'Jungle Cruise' and 'Black Widow'. In this way, it takes advantage of the appetite that its 100 million subscribers have for exclusive content that they cannot see directly in theaters.

With ‘Black Widow’ alone, Disney generated $60 million in its opening weekend. A respectable sum, especially if we consider that they do not have to share these profits with the cinemas.

With such figures, the PVOD model becomes a viable option for large studios. Above all, taking into account that not all the public wants to return to theaters due to the pandemic and another percentage simply prefer to enjoy the contents in the comfort of their home.

Will we soon see a massive adoption of the PVOD by other studies? That remains to be seen in the coming months. For now, Disney CEO Bob Chapek says, “Whether or not [Premium Access] becomes a big part of our strategy going forward is really going to be up to consumers. You know, they vote with their pocketbooks. They are going to tell us how they want to watch movies and we are going to be responsive to the consumer.”

Disney+ is not the only platform that has experimented with premieres on its platform. HBO Max already did it with ‘Wonder Woman 1984’, premiering it in their service the same day as in theaters.

Universal took another route with its film 'Trolls: World Tour', since not having its own service, it made the film available for rent in other services such as the iTunes Store on the same day of release and obtained spectacular revenues, with more than $100 million dollars by rent.

At the moment, we only have to wait and see if the studios choose to go back to a more traditional model or the film industry will adapt and have premieres to PVOD the same day as cinema.

What is clear is that advances in streaming technology allow the safe distribution of live and on demand content in the highest quality, ensuring the best user experience. This together with the right monetization model in OTT is the key to a good project. If it is OTT and streaming, Mediastream has the experience, so do not hesitate to contact us.