Video on demand (VOD): An introductory guide with examples and definitions

Video on demand (VOD) is a common industry term for video content that can be watched whenever the viewer chooses. It is an alternative to live or scheduled video content, which can only be viewed at a certain time. In this article, we’ll introduce video on demand (VOD) streaming and its counterpart, over-the-top (OTT) streaming. We’ll cover the following topics:

• VOD and OTT: What’s the difference and how do they relate?
• Brief history of VOD
• How does VOD streaming work?
• VOD impact by the numbers: Notable statistics
• Popular use cases & examples of VOD streaming
• Considerations when choosing a VOD provider

VOD and OTT: What’s the difference and how do they relate?

Video on demand (VOD) is often mentioned alongside over-the-top (OTT) video. Although related, these terms don’t mean the same thing. OTT refers to video on demand services that are exclusively streamed over the internet, also known as “streaming services.” Some examples include Netflix, Hulu, Amazon Prime Video, and more. This streaming model allows users to access video from anywhere on a variety of devices. Think of it this way—a segment of OTT video is video on demand, but not all video on demand is OTT.

Brief history of VOD

Video on demand (VOD) started with cable TV systems, as cable providers experimented with offering on demand tv shows and movies through their services. According to Britannica, these services were developed as early as the 1990s but weren’t popularized until over ten years later due to equipment and bandwidth costs.

In the early 2000s, sites like YouTube and Netflix started to make waves as the go-to destinations for on demand video content¹. By 2010, on demand video became synonymous with the internet as we know it. On demand video libraries are commonplace across the web for use cases like educational or user-generated content, while streaming services like Amazon Prime, Disney+, and Max provide access to an endless supply of media from our mobile phones, computers, or televisions.

How does VOD streaming work?

Video on demand (VOD) uses adaptive bitrate streaming protocols like HLS or DASH, where the video is broken down into small segments. A content delivery network (CDN) caches these segmented files in the server closest to the user and stores a copy of the content so it can serve the video faster for future viewers. This creates a positive viewing experience for users.

Because VOD uses adaptive bitrate streaming, the video is encoded into multiple versions at different bitrates and resolutions. This means that VOD providers can build players that can adjust to different playback conditions, like low bandwidth.

VOD impact by the numbers: Notable statistics

The video on demand (VOD) market has spiked in recent years. It’s hard to ignore the transformative impact that VOD has had on the media industry and viewer behavior. People expect easy access to video content and they’re willing to pay for that access, creating a highly-competitive landscape for streaming vendors.

Here are some statistics that illustrate the impact of VOD:

• “Americans spend an average of three hours and nine minutes a day streaming digital media.” —Forbes Home and OnePoll, 2024
• “The number of users in the Video on-Demand market is projected to reach 3.4 billion users by 2027.” —Statista, 2024
• “Market share concentration for the Video Streaming Services industry in the US is high, which means the top four companies generate more than 70% of industry revenue.” —IBISWorld, 2024

Popular use cases & examples of VOD streaming

Streaming platforms

Streaming platforms are probably the most used and well-recognized form of VOD. Many users have replaced traditional cable with one or a combination of these platforms. Some of these paid platforms even offer tiered pricing, which allows users to choose how much they want to spend based on whether they are willing to view advertisements.

Examples: Hulu, Netflix, Disney+, YouTube Premium

Fitness applications

Many fitness brands offer both live-streamed and on demand classes. Brands like Peloton have entire libraries of content for users to access at any time, even on their mobile devices or smart TVs.

Examples: Peloton, Nike Training Club, MYX Fitness

Educational content

Everyone can now access educational content through both free and paid platforms. You can learn a new skill, hear a lecture from TEDx events around the world, or even get valuable career advice from celebrities and savants with platforms like MasterClass.

Examples: Coursera, TED, MasterClass, Skillshare

Highlighting events, award shows, and broadcasts

Many broadcast networks offer replays on their websites after live events. Some even use VOD to highlight bonus content. For example, the Tony Awards, which streamed live on traditional television, offers video playlists on YouTube with extras like their “First Impressions Cam,” which features interviews with winners.

Examples: Oscars, Tony Awards, The Olympics

Considerations when choosing a VOD provider

As developers build video into their digital applications and web pages, it’s important to select a video infrastructure that scales and allows for both on demand and live streaming. Here are the top things to consider when choosing a VOD streaming provider:

1. Encoding - Choose a provider with tools that encode videos as viewers watch them, also called just-in-time transcoding. This allows viewers to watch videos right after you upload them.
2. Analytics - You can’t optimize your viewer experience if you can’t measure it. Choose a provider that offers analytics tools to help you track metrics like video quality, rebuffering, or startup time. VOD is a competitive market, so it’s important that you give viewers an optimal experience.
3. Adaptability - Over time, as new devices, browsers, or codecs are released, you will need to make updates to your streaming platform. Choose a provider that automatically updates codecs and renditions so you can avoid constant, manual updates. This is particularly important for applications with thousands—if not millions—of media assets.
4. Ability to transition from live to on demand video - Your provider should allow for both live streaming and VOD content. Once a livestream completes, you should have the ability to immediately turn it into an on demand recording for viewers to either rewatch or discover at a later date—with no additional processing or complex workflows.

Looking for a video on demand provider? Explore on demand video with Mux.