Television VOD systems either stream content through a set-top box, a computer or other device, allowing viewing in real time, or download it to a device such as a computer, digital video recorder (also called a personal video recorder) or portable media player for viewing at any time. The majority of cable– and telco-based television providers offer both VOD streaming, including pay-per-view and free content, whereby a user buys or selects a movieor television program and it begins to play on the television set almost instantaneously, or downloading to a DVR rented from the provider, or downloaded onto a PC, for viewing in the future. Internet television, using the Internet, is an increasingly popular form of video on demand.
Some airlines offer AVOD as in-flight entertainment to passengers through individually controlled video screens embedded in seatbacks or armrests or offered via portable media players. Airline AVOD systems offer passengers the opportunity to select specific stored video or audio content and play it on demand including pause, fast forward, and rewind.
Other forms of video on demand also include "subscription video on demand" (SVOD), which includes services such as Netflix that require users to pay a monthly fee to access a bundled set of content. Another subset of video on demand is "advertising video on demand" (another kind of AVOD), which includes services such as Hulu or Sony's Crackle. This AVOD is often free for users, and the platforms rely on selling advertisements as a main revenue stream.
Developing VOD required extensive negotiations to identify a financial model that would serve both content creators and cable providers while providing desirable content for viewers. Key factors identified for determining the economic viability of the VOD model included VOD movie buy rates, Hollywood and cable operator revenue splits.
Cable providers offered VOD as part of digital subscription packages, which by 2005, primarily allowed cable subscribers to only access an on-demand version of content that was already provided in linear distribution. Included in these packages were "extras" and "bonus footage" rather than full episodes of television shows.
Download and streaming video on demand systems provide the user with a large subset of VCR functionality including pause, fast forward, fast rewind, slow forward, slow rewind, jump to previous/future frame etc. These functions are called 'trick modes'. For disk-based streaming systems which store and stream programs from hard disk drive, trick modes require additional processing and storage on the part of the server, because separate files for fast forward and rewind must be stored. Memory-based VOD streaming systems have the advantage of being able to perform trick modes directly from RAM, which requires no additional storage or CPU cycles on the part of the processor.
It is possible to put video servers on LANs, in which case they can provide very rapid response to users. Streaming video servers can also serve a wider community via a WAN, in which case the responsiveness may be reduced. Download VOD services are practical to homes equipped with cable modems or DSL connections. Servers for traditional cable and telco VOD services are usually placed at the cable head-end serving a particular market as well as cable hubs in larger markets. In the telco world, they are placed in either the central office, or a newly created location called a Video Head-End Office (VHO).
From September 1994, a VOD service formed a major part of the Cambridge Digital Interactive Television Trial in England. This provided video and data to 250 homes and a number of schools connected to the Cambridge Cable network (later part of NTL, nowVirgin Media). The MPEG-1 encoded video was streamed over an ATM network from an ICL media server to set top boxes designed by Acorn Online Media. The trial commenced at a speed of 2 Mbit/s to the home, subsequently increased to 25 Mbit/s. The content was provided by the BBC and Anglia Television. Although a technical success, difficulty in sourcing content was a major issue, and the project closed in 1996.
In 1998, Kingston Communications became the first UK company to launch a fully commercial VOD service and the first to integrate broadcast TV and Internet access through a single set-top box using IP delivery over ADSL. By 2001, Kingston Interactive TV had attracted 15,000 subscribers. After a number of trials, HomeChoice followed in 1999, but were restricted to London. After attracting 40,000 customers, they were bought by Tiscali in 2006 who were in turn bought by Talk Talk in 2009. Cable TV providers Telewest andNTL (now Virgin Media) launched their VOD services in the United Kingdom in 2005, competing with the leading traditional pay TV distributor BSkyB. BSkyB responded by launching Sky by broadband, later renamed Sky Anytime on PC. The service went live on 2 January 2006. Sky Anytime on PC uses a legal peer-to-peer approach, based on Kontiki technology, to provide very high capacity multi-point downloads of the video content. Instead of the video content all being downloaded from Sky's servers, the content comes from multiple users of the system who have already downloaded the same content. Other UK TV broadcasters have implemented their own versions of the same technology, such as the BBC's iPlayer, which launched on 25 December 2007, and Channel 4's 4oD (4 On Demand) which launched in late 2006. Another example of online video publishers using legal peer-to-peer technology is based on Giraffic technology which was launched in early 2011 with large Online Video-on-Demand publishers such as US based VEOH and UK based Craze's OnlineMoviesBox movie rental service. The BBC, ITV and Channel 4 planned to launch a joint platform provisionally called Kangaroo in 2008. This was abandoned in 2009 following complaints investigated by the Competition Commission. That same year, the assets of the defunct Kangaroo project were bought by Arqiva, who used the technology behind Kangaroo to launch the SeeSaw service in February 2010. A year later, however, SeeSaw was shut down from lack of funding.
VOD services are now available in all parts of the United States, which has the highest global take-up rate of VOD. In 2010, 80% of American Internet users had watched video online, and 42% of mobile users who downloaded video preferred apps to a normal browser. Streaming VOD systems are available on desktop and mobile platforms from cable providers (in tandem with cable modem technology) who use the large downstream bandwidth present on cable systems to deliver movies and television shows to end users, who can typically pause, fast-forward, and rewind VOD movies due to the low latency and random-access nature of cable technology. The large distribution of a single signal makes streaming VOD impractical for most satellite TV systems. Both EchoStar/Dish Network and DirecTV offer video on demand programming to PVR-owning subscribers of their satellite TV service. Once the programs have been downloaded onto a user's PVR, he or she can watch, play, pause, and seek at their convenience. VOD is also quite common in more expensive hotels. VOD systems that store and provide a user interface for content downloaded directly from the Internet are widely available.
According to the European Audiovisual Observatory, 142 paying VOD services were operational in Europe at the end of 2006. The number increased to 650 by 2009.
At the January 2010 Consumer Electronic Show in Las Vegas, Sezmi CEO Buno Pati and president Phil Wiser showed a set-top box with a one-terabyte hard drive which could be used for video on demand services previously offered through cable TV or broadband. A movie, for example, could be sent out once using a broadcast signal, rather than numerous times over cable or fiber-optic lines, and this would not involve the expense of adding many miles of lines. Sezmi planned to lease broadcast spectrum to offer a subscription service which National Association of Broadcasters president Gordon H. Smith said would provide a superior picture to that of cable or satellite, at a lower cost.
Although video on demand generally refers to delivery mechanisms operating in accordance with applicable laws, the motivation for the development of video on demand services can be traced back to peer-to-peer networking and the development of file sharingsoftware. These innovations proved that it was technically possible to offer the consumer potentially every film ever made, in a way that does not burden the original provider without the linear costs associated with centralised streaming media.
Many legal services such as Spotify use peer to peer distribution to better scale their platforms with the likes of Netflix considering doing so to cope with net neutrality problems from downstream providers.
Torrenting is a popular alternative to legal streaming with 6% of global internet traffic involved in file sharing applications.
Subscription video on demand (SVOD) is a service offered by pay systems, which charges their subscribers a monthly fee for accessing unlimited programs.
Near video on demand (NVOD) is a pay-per-view consumer video technique used by multi-channel broadcasters using high-bandwidth distribution mechanisms such as satellite and cable television. Multiple copies of a program are broadcast at short time intervals (typically 10–20 minutes) providing convenience for viewers, who can watch the program without needing to tune in at a scheduled point in time. This form is bandwidth intensive and is generally provided only by large operators with a great deal of redundant capacity and has been reduced in popularity as video on demand is implemented. Pay-per-view provider In Demand provided up to 40 channels in 2002, with several films receiving up to four channels on the staggered schedule to provide the NVOD experience; however the service now provides only six channels of content, with In Demand sports PPV using the other channels.
Push video on demand is a technique used by a number of broadcasters on systems that lack connectivity to provide true video on demand or by broadcasters who want to optimize their video streaming infrastructure by pre-loading the most popular contents to the consumer device. A push VOD system uses a personal video recorder (PVR) to store a selection of content, often transmitted in spare capacity overnight or all day long at low bandwidth. Users can watch the downloaded content at the time they desire, immediately and without any buffering issue. As content occupies space on the PVR hard drive, downloaded content is usually deleted after a week to make way for newer programs. The limited space on a PVR hard drive means that the selection of programs is usually restricted to most popular content. A new generation of Push VOD solution recently appeared on the market which, by using efficient error correction mechanisms, can free significant amount of bandwidth and that can deliver more than video e.g. magazines, interactive applications.
Catch up TV (or Replay TV) is VOD in which TV shows are available for a period of days after the original television broadcast. Services provided by incumbent broadcasting agents use this terminology when offering typically time limited on VOD options on schedules aligned with their main transmissions.