What the Hell Is a vMVPD? The Modern Streaming Market Explained

Unraveling the mystery of the alphabet soup of streaming acronyms: AVOD, SVOD, TVOD and vMVPD

unsplash / Jon Tyson

Over the past decade, a set of acronyms — AVOD, SVOD, TVOD, vMVPD —  have seeped their way into the vocabulary of entertainment reporters, business-minded media folk and a growing number of consumers. You may have noticed them being tossed around in conversations related to streaming or content distribution, but are unsure of their exact meanings.

However, this alphabet soup is not as complex as you might think. In fact, most of the acronyms share a common set of letters, VOD, which stands for video-on-demand. VOD allows viewers to choose from a selection of titles that they can watch at any time from beginning to end (unlike a TV channel which airs a programming block in a specific, linear order).

Here is the complete break down of the terms.

Subscription Video-On-Demand (SVOD)

Probably the most commonly used term is SVOD, which stands for subscription video-on-demand. The “subscription” part of the term just means that a user will need to pay to access the content. A few services that fall under this category include Netflix, Hulu and Amazon Prime.

Typically, SVOD services make their money off of subscription fees — which is one of the reasons why Netflix has been able to operate without running ads. However, this is not always the case. For example, Hulu charges a $5.99 per month fee for its first tier of service, which includes advertising. Customers need to subscribe to the pricier $11.99-per-month option if they want to bypass these ad breaks.

Recap: Are you paying for the service? Yes? Then it’s an SVOD service.

Ad-Supported Video-On-Demand (AVOD)

Ad-supported video-on-demand platforms like YouTube make their money off ads in between their content. As a result, the platforms are free for viewers. As more subscription services emerge on the market, AVOD platforms are becoming a popular option for entertainment seekers who don’t want to pay for yet another service.

A recent study from the Interactive Advertising Bureau found that 73 percent of adults 18 and older who typically watch streaming video say they use ad-supported services. In addition to YouTube, platforms that fall within the AVOD category include The Roku Channel, Tubi, iMDB’s FreeDive, Popcornflix and Crackle.

Recap: Are you paying for the service? No? Do ads run between the content? Yes? Then it’s an AVOD service.

Transactional Video-On-Demand (TVOD)

Unlike SVOD services, which charge a monthly price to access their content, transactional video-on-demand requires viewers to pay for each title they watch. It works much like the now-defunct Blockbuster model where users get a select number of days to watch the title before they have to pay to rent it again. Many TVOD services also allow users to purchase the title for their own digital collections. TVOD services typically offer more recent releases, which is beneficial to rights holders since it yields higher revenues.

In 2018, about 85.5 million people purchased a TV series, according to a study carried out by Statistica. Companies that offer TVOD include Amazon, Walmart’s Vudu, iTunes, Google Play and YouTube Movies. At the start of 2018, Amazon held 17.9 percent of the TVOD market in the United States, iTunes held 7.9 percent, and Google Play held 7.2 percent.

Recap: Are you paying for the individual title? Yes? Then it’s a TVOD.

Virtual Multichannel Video Programming Distributor (vMVPD)

Virtual multichannel video programming distributors (vMVPD) — also referred to as streaming TV services — aggregate live and on-demand TV and deliver the content over the internet in a linear fashion. vMVPD services resemble the familiar layout of cable packages where users can browse a guide or flip through channels that stream programming 24 hours a day. These services are often used by recent cord-cutters who want to keep select channels from their cable packages but at a lower price.

vMVPD services include Sling TV, Hulu Live TV, YouTube TV, DirecTV Now, fuboTV, PlayStation Vue, Viacom’s Pluto TV and Xumo. According to Rich Greenfield of BTIG, paid vMVPD subscribers hit a high of 7.7 million last year.

And that’s expected to grow: vMVPDs gained a combined 2.1 million subscribers over the first nine months of 2018, according to a recent Conviva study, which is starkly correlated with the loss of 2.8 million subscribers for cable and satellite during the same time period.

Recap: Does the digital service offer content in a linear fashion (like days of cable and broadcast)? Yes? Then its a vMVPD.

Hybrid Models

Several streaming services fall into more than one category. For example, while Pluto TV (which claims 12 million monthly active users) and Xumo (5.5 million active users) both offer 100-plus linear channels for livestreaming, they also offer a growing collection of video-on-demand programming.

The Roku Channel, while its primary offering is ad-supported video-on-demand, also includes a small collection of linear channels.