Author Archives: Milan Gupta

Top TVOD platforms generate high revenue per user

TVOD – Build a Transactional Video on Demand Platform

Transactional Video on Demand (TVOD) model can be used for elearning and entertainment videos. TVOD model enables you to make maximum money from videos.

There are many questions video creators have in mind when starting a video on demand website. The biggest one of them is:

What would be the best business model for my video website?

We have previously discussed the Subscription VOD model in detail. In this blog we’ll be shining light on its complement, the Transactional Video on Demand model. In doing so, we answer the following questions related to TVOD:

In 2016, US Domestic consumers spent over $2 Billion purchasing films from Electronic Sell-Through platforms such as iTunes and Amazon Video. A large cut of this revenue figure goes to the original content creators. In live sports, Pay-Per-View buys generated $400+ mn revenue for the August 2017 megafight between Floyd Mayweather and Conor McGregor. Surely, TVOD works for entertainment content.
The exhibition fight between Mayweather and McGregor generated $400+mn in Pay-Per-View buys, validating the TVOD model
The TVOD model works well for elearning VOD platforms just as well. In 2016-17, the K12 and competitive exam prep startup Byju’s generated $40 mn revenues. Byju’s, which offers year-long courses along the TVOD model has received total funding of $244 mn. Coursera, valued at $800 million, has emerged as the top elearning VOD platform largely on the basis of their course specializations which until recently followed the TVOD model.

Surely, when done right, TVOD can bring immense riches for video creators.

TVOD is amazingly good for making money

The major business model for video creators are TVOD (Transaction VOD), SVOD (Subscription VOD) and Advertising VOD (AVOD). Of these the TVOD model has the potential to generate the most money from a given video.

Case in point the Fight of the Century boxing bout between Floyd Mayweather and Manny Pacquiao. The mega-fight had 4.6 million users buying Pay Per View rights at $89.95 ($99.95 for HD). The exhibition boxing fight between Mayweather and Conor McGregor had approximately 4.4 million PPV buys at the price of $99.95.

In the Electronic Sell-Through (EST) market iTunes is the largest TVOD platform. iTunes presents various options for users to catch their favorite film. Users can rent a film for $4.99, or purchase it for unlimited viewing at a higher price ($9.99 or more, which can vary for different titles). SVOD platform Netflix on the other hand charges users around $10 for full catalog access.  TVOD models ability to generate fantastic revenue becomes clear when you consider that iTunes generates the same revenue from a user renting 2 films in a month as Netflix does for monthly access to its entire catalog.
In TVOD revenue per film is the highest
Amazon Video offers a hybrid TVOD-SVOD model. Amazon provides its SVOD service as part of its Prime membership. We’ll discuss the reason why some titles are sold separately along TVOD model later in the blog.

Among education websites, Udemy is a TVOD platform. Built as a marketplace with little content moderation, Udemy offers lifetime access to courses at a fixed price. As of December 2016 the platform had over 14 million students, and the highest earning instructor had exceeded $2.8 mn in total earnings.

Defining Transactional Video on Demand (TVOD)

In Transactional Video on Demand users are expected to pay one-time for access to video content. The nature of this access can vary –

  • Users get access to the video for a fixed period of time on the website/ app
  • Users get access to the video indefinitely on the website/ app
  • Users may also be able to download the video for offline viewing (protected by DRM so that users can only access it through authorized apps)

The absence of a recurring payment is the key difference between Transaction Video on Demand and Subscription Video on Demand.
TVOD - Defining attributes
Even when purchasing films through Electronic Sell-Through platforms, users do not actually “own” the film. Instead they license the film from the platform, a license that can be revoked by the rights holders. This has caused controversy when iTunes and Amazon video users have found movies disappearing from their libraries.

TVOD business model can be implemented as:

  1. Pay per view for live sports
  2. Fixed-period access to education content
  3. For electronic sell-through via iTunes, Google Play Movies or Amazon Video

When is Transactional Video on Demand the right model for you

TVOD model works best for highly differentiated and compelling content. This is because customers are willing to pay a premium for videos that offer unique value.

Consider the animation film Despicable Me. The $600mn+ grossing superhit film was released in 2010. The film spawned two sequels, ‘Despicable Me 2’ and ‘Despicable Me 3’, and a prequel named after the stars of the series, the ‘Minions’.

Despicable Me 2 and Minions are available on Netflix’s SVOD platform. Despicable Me 3, released in 2017, would likely makes it way to SVOD by 2018 as well. So why then is Despicable Me only available on TVOD?

A 7-year-old film occasionally broadcast on cable TV, Despicable Me has only a small potential audience that has not seen the film. The film has achieved a cult status in popular culture. There is likely to be a significant subset of fans who would like to own the film for repeat viewings. Universal Studios, the distributors of the film would have calculated that revenue from the title earned through the EST option would be higher than the licensing revenue from SVOD platforms.
Film studios offer Despicable Me only on TVOD because of the higher revenues per user generated in the model

Transactional VOD business model is ideal when you have a small potential audience that are willing to pay a higher price for your videos.

Indeed, offering highly differentiated content is a pre-requisite for a successful TVOD platform. Prospective users should know the value that your video content will offer them. The marketing for your eLearning TVOD platform should be focused on how your platform uniquely enables learners to achieve their objectives.

Elearning TVOD

Education VOD platforms can succeed with TVOD model when they can demonstrate to potential learners the value addition to them. This value addition could be scoring higher in a competitive examination or learning new skills for a new job/ promotion.

TVOD is widely popular for skill-upgradation courses. Analytics Guru Jeff Saur for instance sells lifetime access to his Beginner to Advance Google Analytics course for $497. With his analytics course Jeff promises that learners can complete Google Analytics certification within a month of starting. A clear achievable target that your viewers can achieve should be the focus of your elearning TVOD platform.
Jeff Sauer's Advanced Google Analytics Course uses the TVOD model

For elearning TVOD platforms, there is necessarily a timeline in which online content is accessed. You should create a structure that learners can follow to achieve their objectives.You should also incorporate additional elements beyond just the videos.Quizzes and Assignments are important so that learners are able to test themselves and ensure that they are absorbing their knowledge. On the SVOD platforms such as Great Courses and Lynda are essentially a buffet of video content with no evaluation element.

Entertainment TVOD

You can build an entertainment transactional video on demand platform by offering highly rated films not offered on SVOD platforms.

Hollywood Studios are also assessing a variant of TVOD, called the Premium Video on Demand. In this model, newly released films would be offered on Video on Demand within weeks of theatre release, at a higher price than when they are eventually released on Blu-Ray.

Whereas Google Play Movies and Apple iTunes are content aggregators, film distributors are also entering the VOD market through their own Transactional VOD platform. The UltraViolet Rights Management system enables users to purchase films from different platforms. This enables users to centrally store proof-of-purchase. In a highly fragmented VOD market, a centralized database for users to save the licenses of films they have purchased is very useful.
With UltraViolet, users can purchase films from participating TVOD platforms and centrally manage licenses on the UV platform

Implementing a Transaction Video on Demand model

Electronic Sell-Through – Download to Own vs Download to Rent

iTunes has both renting and buying options. There are restrictions involved in renting a film – you have 30 days in which you can start watching a film, and once started, you have 48 hours to finish watching the film. You can watch the film as often as you like, until it expires after 48 hours of starting. You cannot stream it simultaneously on different devices, or download it on more than one device at a time.

In the purchase option, users have license to download and stream the film on any owned device. Purchase options for films cost on average $9.99, with some variations depending on the title.

In TVOD your users license your content

Major TVOD platforms such as iTunes and Amazon Prime Video have faced controversy when they had to pull films from the libraries of users who had purchased the titles. Licenses for films can change hands between distributors, at which point the rights holder may pull it from the TVOD platform.

Users buying digital content – whether books, music or films, only buy a restricted license to that content. On the other hand when users purchase hard copies of books or Blu-Ray discs they own that content (subject to copyright restrictions).

When selling online content, a Digital Rights Management system is necessary to implement user licenses. DRMs enforce restrictions such as preventing users from making illegal copies and sharing and allowing access for a fixed period of time only.
DRM systems manage user licenses in TVOD platforms, ensuring only authorized viewers watch the video

Implementing TVOD for eLearning videos

For eLearning videos you should offer fixed-period access access to students. For example, if you provide videos for IAS exams, the fixed period cycle for users could be 11 months over which learners prepare for the exam. You may alternatively offer lifetime access as well, in which case you would need to regularly update your content in line with changes in the field.

Distinctions between TVOD and SVOD model

Customer Perception of Value tends to be Higher for SVOD platforms

For SVOD platforms, users pay a low amount per month in return for unlimited access for a month. This seems a good deal on the surface, and users are likely to continue the recurring payments. In TVOD model on the other hand there is a usually high one-time fee for access to content.

Consider an online course that you would complete in 6 months. The online platform may charge you $10 per month subscription, or it may charge a one-time fee of $50. Assume that in either cases it would take you 6 months to complete the course. Users are more likely to opt for the subscription because of the lower upfront fees. However the net fees is actually higher for SVOD than for TVOD. This paradox is the reason why educational VOD platforms such as Udacity and Coursera, which have been looking to scale up, have transitioned towards the SVOD model.
Customer Perception of Value tends to be higher for SVOD content than for TVOD content

Customer Retention is a major challenge in TVOD

In SVOD business model you retain your customers over a period of time. Users get habituated to paying a fixed monthly fee in the SVOD model.

In the case of TVOD, users deliberate before every transaction. Customer retention is a major challenge in TVOD. TVOD platforms require a greater marketing effort, both to retain existing customers and to get newer ones.
Customer retention is a major challenge in TVOD

TVOD is best suited for new VOD platforms

In TVOD the revenue generated per user is high, which makes up for the lack of scale when starting out. Coursera adopted the TVOD model in its growth stage.

Coursera evolve into a Subscription Video on Demand platform in 2016, as it chased better scale. Subscription VOD platforms are suited for large number of users. The lower ticket size in SVOD is compensated by the larger number of users.

Video content owners opt for TVOD largely when the expected audience size is low, but the audience are willing to pay a premium for the content.
TVOD model is the right choice for new VOD platforms

Royalty calculations are straightforward for TVOD platforms

Most elearning SVOD platforms pay video course creators a a portion of their revenue proportionate to the number of viewers to their videos. This involves complex calculations, and the platform has to take into account different metrics such as number of learners who enroll into a course, number of learners who complete a course, and net number of viewers. Royalties paid to course creators tend to be quite low in comparison to the overall revenue of the SVOD platform.

Royalties are much higher in the TVOD model. The video creator gets a larger percentage of transaction revenue. In the case of Udemy, video creators and Udemy each receive 50% of every course purchased organically on the platform.
In TVOD video royalties are much higher than for SVOD

Marketing Your Transaction Video on Demand business

In SVOD payments are recurring, and offer a stable revenue base. However, that is not the case for TVOD platforms. You cannot take repeat transactions for your TVOD platform for granted. An elearning VOD platform has done its job when users complete the course. Students will be unlikely to pay a second time to complete the same course. For EST platforms, returning users do the same cost/benefit analysis at the point of each purchase.

As a result, TVOD platforms suffer from lower user retention and fewer repeat transactions. This translates to low revenue stability.

You should use the right marketing channels for continuous growth. Social Media and Email marketing are the best channels to attract new users to your TVOD platform. Social Media enables you to target audience on the basis of their interests. It also utilizes network effects, so you can easily multiply your reach across your potential audience.
Social Media and email marketing are the best channels for promoting your TVOD platform

When you market an online video course you should highlight the measurable improvements that the course offers. This could include higher test scores or better chances of climbing up the career ladder. You can also include testimonials from successful learners to highlight the value of your course.
Checklist for promoting online video course on TVOD model

Effective Paywall is more important for Transaction Video on Demand

One-time costs are high for TVOD content. This makes potential users seek means to access the video content for free, thereby increasing likelihood of content piracy. It is much more likely that users will download video content, and share it with friends, either to help them save costs for the one-time access fee, or to split the one-time fees.

In subscription VOD there is an ongoing relationship between the user and the platform. Users are likely to continue on the platform out of loyalty. Indeed the rise of SVOD platforms has significantly contributed to decline of piracy of films.

Apple applies a DRM to movies downloaded via iTunes, preventing users from sharing the video content.

VdoCipher offers a DRM solution to implement a paywall for your TVOD content. VdoCipher’s secure video hosting protects your video content from downloader plugins.
VdoCipher secure video streaming is perfect for TVOD

Check out our full list of features to see how you can use VdoCipher for business.

Hollywood’s Premium Video on Demand Model

Streaming video has opened the floodgates to home entertainment. With inexpensive subscriptions to Netflix, Amazon Prime and niche subscription video on demand platforms, you now have access to limitless content within a few clicks. Underlying technological shifts have led a ginormous rise in subscription video on demand platforms. These same shifts have also contributed to an equally dramatic collapse in DVD sales.

DVD sales are declining and being beaten by Subscription Video on Demand

DVD revenues have, since their launch in early 2000s, dominated the home entertainment market. At their peak in 2006, DVD sales dwarfed box office receipts. The $16.5 billion in DVD sales towered over $9.6 billion in theatre revenues.

However, in the intervening decade, the rise of SVOD platforms has contributed to a decline in DVD sales. In 2016 revenues from streaming services ($6.2 billion) edged out DVD sales ($5.5 billion) for the first time ever.

Movie studios hand has been forced by piracy. The most pirated episode of Game of Thrones has been downloaded 13 million times. While subscription video on demand services are also afflicted by piracy, the bigger brunt has been faced by movie studios.

This is because streaming services offer an inexpensive alternative for most users who would otherwise be lost to piracy. This weakens the position for movie studios when it comes to licensing content to streaming video on demand platforms.

Growth in the home entertainment industry has primarily been in the subscription video on demand space, dominated by Netflix and Hulu. Subscription video on demand platforms offer seemingly unlimited choice to consumers, with the express intent to lock-in viewers to their platform.

Amidst the rapid shift towards subscription video on demand services, movie studios are looking for a new source of revenue. And now they just might have found one.

Premium Video on Demand

Whispers of a Premium Video on Demand model have been heard around Hollywood ever since streaming video became a possibility. What has changed over the last year has been theatre chains’ willingness to consider this model.

This new revenue model entails release of film through video on demand before the film is made available on DVD, Blu-ray or Streaming services. The time of release is critical. This is because films are proposed to be released on Premium Video on Demand within a few days of theatre release.

This is the thinking: The first two weeks of a film’s theatre release is when a large percentage of revenue is generated at the box office. Beyond this period,  the initial novelty fades. The movie however is still in the mind of the general movie-going population. Premium Video on demand is intended to capture the segment of potential audience that would like to watch the movie at the comfort of their homes, and who otherwise might not go to the theatre to catch the film.

Needless to say, when considering the pricing and timing of the Premium Video on Demand release, maximum care needs to be taken so as to not cannibalize theatre revenues, and yet earn strong revenues. Movie studios are considering time windows of 10-45 days from the date of theatre release to release new films on premium video on demand.

In all likelihood, movie studios are likely to build their own platform to use for Premium Video on Demand. Costs of building and promoting a premium video on demand platform are low when compared to the losses from sharing revenue with an aggregator like Netflix. Movie studios can quite conveniently use VdoCipher’s secure video streaming to host videos on their premium video on demand platforms.

What is the Hollywood Release Window?

In Hollywood the release window is the period after the release of the film when the film is solely available on theatres. This period of 90-120 days before the film is released on DVD or subscription services is considered sacrosanct by the theatre chains. Theatre owners indeed have reason to consider this period sacred. They fear that attempts to shorten this window would cause theatre-goers to skip the cinema halls altogether and wait out a short period to catch the newest release.

On the other hand, studios are aware that different movies have different reception at the box office. Some films see extended runs in theatres for over 3 months whereas many end up disappearing within a month. The challenge is to apply a one-size-fits-all premium video on demand model in the film industry. This is because with films it is only about a week after release that a film’s fate becomes clear.

Risks in launching Premium Video on Demand for Studios

The studios are aware of the dangers of trying to fix something that is not broken. Risks in the premium video on demand model are evident – Premium VOD may cannibalize theatre revenues, confuse users, and may even lead to further decline in the culture of audience going to cinema to watch films.

Watching films in cinema halls is a different experience from watching at home. Besides the physical experience of watching the film in theatres, there is also the aspect of pop-culture relevance of films. Popular films gain an audience because people watch a film and recommend it to their peers. This peer pressure contributes to a large percentage of people going to theatres.

Netflix has already disrupted the film industry with its model of releasing films on the VOD platform on Day 1 itself. Starting a Premium VOD option may just about be the final nail in the coffin for movie theatres.

Just as studios are wary of pulling audience away from movie theatres, they are aware that overall changes in home entertainment means that viewers now experience films differently than before. Developing a premium video on demand platform would mean that movie studios are better equipped to fight off Netflix and Subscription VOD websites.

Ideal release window and price point for Premium video on demand

The debate currently is about the time window between theatre release and release on Premium Video on Demand. A related problem is that of price. It is over these two points that the major studios differ.

Studios, Advertising and Pricing

Warner Bros has proposed a $50 fee for a Premium Video on Demand release 17 days
Fox is considering $30, and making films accessible after a 30-45 day period of theatrical release
Fox and Warner Bros. have displayed flexibility in this, with Warner Bros. also interested in the pricing and timeline of Fox’s proposal.
Universal wants to see Premium video on demand release date in under 20 days. Their proposition is $40 after 10 days.
Disney is seeing a golden 2017 (Beauty and the Beast, and Pirates of the Carribean both generating handsome profits). Disney films are often seen as sure bets at the box office. Their films are eminently suited for the theatre experience, for which reason it is extremely unlikely to undermine its bottomline by agreeing to Premium Video on Demand.

Major Hollywood studios are actively considering a Premium Video on Demand model

The studios cannot collaborate together to achieve a Premium VOD model because of anti-trust laws, and are likely to enter into agreements directly with theatre chains.

Advertising and Public memory: Upto and during the weeks of a film’s release released, there is extensive promotion and publicity for movies. If the film being released through video on demand shortly (between 10 to 30 days) of the theatre release, it is much more likely to be in public memory. On the other hand if this period is extended to beyond 45 days a separate promotional campaign would be required to release on premium video on demand, which may not be as effective either. The risk is that by Day 45 the movie would have receded sufficiently from public consciousness that responses will be tepid.

Pricing also becomes relevant in this regard. The lower the price the higher are people likely to want to watch films at home only and avoid theatres. To placate theatre owners, studios may price premium video on demand films for as much as $50.

Theatre Owners and Film-makers on Premium Video on Demand

Exhibitors are quite clearly against Premium Video on Demand, and they seek reassurance that there will be no further changes in the release window over the next 5 to 10 years.

Film-makers are divided when it comes to Premium VOD. Many such as Steven Spielberg and Peter Jackson back the concept of Premium Video on demand (supporting Screening Room). On the other hand many filmmakers such as auteur Christopher Nolan stress the significance of theatre for film, and would not want to be involved in anything to jeopardize that.

Subscription Video on Demand Platforms

Netflix has of course circumvented the entire theatre release model. This has found the video on demand platform facing some resistance – Cannes Film Festival now requires that to be able to compete for the Palme d’or movies need to have theatrical releases. 

Netflix released Okja directly on its video platform

Amazon Studios on the other hand reaffirmed their committment to theatrical release of films that they produce. The studio produced Oscar winner Manchester by the Sea, which enjoyed an extended theatre run.

Other Players in Premium Video on Demand – Prisma and Screening Room

Prima is a high-security home entertainment system that enables users to watch films at their homes at the same time as theatre releases. It is prohibitively expensive, and the anti-piracy restrictions means that folks are unlikely to want to capture films using this technique. Prima costs $35,000 for installation and $500 for each time you want to watch a film. The service offers movies from Film Studios Univeral, Lionsgate and Paramount, and is in talks with Warner Bros., Disney and Sony.

Prima Security features include background check, restrictions on size of home theatre hall and minimum size of theatre screen, besides fingerprint authentication at each time of video playback. This is one that the likes of Brad Pitt and Woody Allen are likely to have at their homes.

Sean Parker cofounded Screening Room, which intends to introduce direct online release of films at the same time as theatre release.Sean Parker is notorious for disrupting the music industry with Napster. Under its plan, viewers can rent movies the same day as theatre release for $50.

Screening Room faces considerable opposition from studios and exhibitors.The company claims that it can generate $8.5 billion revenue annually for the film industry. Movie studios however disagree, and believe the potential returns are not very sufficient. 

Under its proposal, of the $50 rental fee, 20% would go to the movie’s distributor, participating theatre chains would get upto $20 from the fee. Screening Room has not gained much traction, largely because of its outsider status in Hollywood and because of its aggressive same-day release model.

It is likely that Premium Video on Demand will take in the near future. VdoCipher’s full-stack DRM is eminently suited for releasing films online simultaneously with theatre release. Online businesses also often require features over and beyond video security. VdoCipher fulfills all major requirements for enterprise video hosting. The complete set of features that VdoCipher offers for enterprise video hosting may be found here.

Top Video entertainment platforms have adopted the SVOD model

SVOD – Build a Subscription Video on Demand Platform

Why Subscription Video on Demand (SVOD platform) is the big deal

I cannot get tired of quoting this stat – Netflix accounts for over 35% of peak internet traffic in North America. At any time every third internet user is streaming videos on the VOD platform.

When a single VOD platform offers such variety as Black Mirror, BoJack Horseman and House of Cards, how else would you spend your time?
SVOD giant Netflix have reached 100mn+ subscribers internationally
Indeed Netflix dominates as an SVOD platform because of their fantastic library of popular and critically acclaimed TV shows and movies. In Subscription Video on Demand users pay a periodic (most often monthly) fee, in return for which they get access to unlimited content on the VOD platform. SVOD model is best suited for websites that have a large library of video content, and that can attract large number of viewers.

Indeed, subscription video on demand platforms are havens for internet users looking to spend their down-time on entertainment videos. Many Subscription VOD platforms have followed Netflix’s lead. Amazon Prime Video, Hotstar and Hulu are amongst the biggest SVOD platforms in entertainment.

SVOD platforms are also incredibly good at making money. In 2016 SVOD platforms in the US generated $6.2 Billion revenue, compared to $2 Billion generated by Electronic Sell-Through platforms such as iTunes and Google Play Movies.

E-Learning Video providers have also adopted the SVOD model. Udacity, Coursera and Pluralsight have achieved sustained growth in revenue and a stable user base by implementing the Subscription VOD model.
Elearning VOD platforms have adopted SVOD model
In this blog I detail why there is immense potential for growth in SVOD market, and how you should get started with your VOD platform.

Will Video on Demand replace Television

Video on Demand platforms have grown exponentially in size over the last 10 years. Cable television, for a long time the default medium for family entertainment, is now facing an existential threat because of all-you-can-watch SVOD platforms.

Consider the figures from a global Nielsen survey on the popularity of video on demand platforms.

26% global users are subscribed to at least one Video on Demand platform

Nielsen’s followup to the study however revealed an interesting insight. Even though users express the intent to cancel cable, they rarely go through with cutting the cord. The sheer variety of content that a Television connection offers – Movies & Series, News, Sports, Infotainment and Kids Entertainment – can barely be matched by a single Video on Demand platform. Netflix for example has ruled itself out of acquiring sports content. The company believes in focusing on its niche of feature-films and television. 

Potential for a vast ecosystem of VOD Platforms

Much needs to change for Video on Demand platforms to successfully replace television. An ecosystem of platforms, which would offer both general entertainment and niche content, needs to emerge.

YouTube is the biggest video on demand platform. Viewers on YouTube clock over 1 billion hours of videos viewed, every day. This, as YouTube is keen to point out, comes to to over 100,000 years worth of videos viewed, every single day.

YouTube’s revenue model is Advertising video on demand (AVOD). The platform generated $9 billion revenue in 2015. Inspite of the huge audience and revenues that it generates revenues earned by artists is very low. YouTube’s content-creator split means that YouTube takes 45% of ad-generated revenues from every channel. Video creators also have to sign up with Multi-channel Networks to handle the monetization aspect effectively. This in turn sees their split from video come even further down to 38 percent.

Besides this, per ad revenues are often very low – the high is at about $20 per 1000 views. And that is when users watch through a full ad.

As a result, revenues generated by many video creators are barely sufficient to recoup the investment in video. Many artists now opt to start their own video on demand platforms to better monetize their creative output. Case in point, Popular YouTube personality Casey Neistat took a break from vlogging on YouTube to start his own venture with CNN.

Explanation of business models for video on demand platform

Opportunities for better monetization of content are now available for video creators. The true size of the video on demand ecosystem can probably be estimated by the number of YouTube channels with over a million subscribers (somewhere around 2000)

Subscription Video on Demand – The Whys and Hows


The time is perfect for you as a video creator to start your own Video on Demand Platform. Revenues per subscriber on your own video platform are much much higher than revenue per subscriber to your YouTube channel.

Subscription costs in SVOD tend to be quite low compared to the aggregated costs of cable membership. This means that users can easily opt for multiple subscriptions to VOD platforms, without burning a hole in their pocket. SVOD is a much more sustainable model for VOD platforms, from both customer’s and video creator’s perspective.

Subscription Video on Demand model is ideal when you:

  • Are confident about building a loyal audience, and
  • Have a sufficiently large library that users can watch when convenient.
SVOD platforms are successful when they combine large range of viewing options with building viewer loyalty

SVOD platforms are successful when they combine large range of viewing options with building viewer loyalty

Examples of niche video on demand platforms include:

  • Indieflix, which is a platform for independent short films
  • Noggin, Nickelodeon’s video subscription app for preschoolers.
  • Panna Cooking – Video Recipes from master chefs

Costs of Content licensing in Subscription Video on Demand

If you are a content aggregator, you can choose to acquire different kinds of video content, and offer a combined subscription to your video package. A large library of content that would appeal to your subscribers is ideal for the SVOD model.

On the other hand you can offer a select range of premium content.  Transactional video on demand model, used among others by Apple iTunes, makes more sense for premium content. Examples of premium content would be movies being released through streaming video close to their theatre release. Hollywood studios are actively considering a Premium Video on Demand model, offering films to users at high price points within weeks of theatre release.

Determining the costs and potential revenue from adding video content is a key problem to solve. You would need to assess the value that it adds to your video library. Quantifying this value is the main challenge for video aggregators in the SVOD model.

User Management

User management is the most critical element to a subscription video on demand. It is at this stage you should ask yourself what features you wish to incorporate as part of the subscriber membership experience.

For example, do you want users to have access to all the content on your website at once? The answer depends on how you want your users to experience your SVOD platform.

You can implement Multi-tiered Memberships – Suppose you have somehow bagged the streaming rights to HBO’s Game of Thrones. You can sell a subscription to users who want to watch the show as it is released, and another (pricier) subscription to users who wish to catch-up with episodes of previous seasons.

With your own subscription video on demand platform you can customize user’s experience. You also have flexibility over pricing, meaning that you can effectively monetize from budget customers as well as from customers seeking a superior experience.

Netflix has a tiered pricing model, starting at $7.99 in the US. By upgrading to the $9.99 subscription users can simultaneously watch Netflix on two screens, and for $11.99 subscription can access it on 4 screens. Most new video on demand platforms implement a variant of a freemium model, with free content available to attract new users, and then tiered pricing options. 

Netflix offer tiered memberships to their SVOD platform

Sell Multiple Memberships

You can also sell multiple memberships for piecemeal video content. Suppose you’ve managed to wrest House of Cards away from Netflix, and want to sell separate subscriptions to both House of Cards and Game of Thrones. You can do so, if it makes sense to sell separate subscriptions. While there is likely to be considerable audience overlap for the two TV series, selling multiple subscriptions makes sense when you believe that different kinds of users require exclusively one kind of content. Online education platforms generally adopt multiple memberships, based on the subject that students wish to learn.

Managing User Access

Ultimately any good user management system succeeds on the basis of how well it manages user access. Adding user restrictions, such as the ability to download videos, watching simultaneously on different screens, and managing total user watch time can be highly important. You may also wish to implement a dripped content strategy, wherein your videos may become accessible to users only after a set period. You can for example release a new episode of a video series for new viewers. This makes eminent sense for online video courses and for newly released television shows.

A detailed comparison and statistical study of SVOD with TVOD is here.

Use WordPress for Subscription Video on Demand Platform

WordPress, with its fantastic ecosystem of plugins and themes offers a large variety of membership plugins. Popular WordPress membership plugins MemberPress, WooCommerce Memberships and Restrict Content Pro provide most of these user management features that you may wish to incorporate to your website. Each of these plugins has a unique feature set, and whether it is the best for your Subscription video on demand model depends on the feature set you are looking to incorporate to your website. WordPress guru Chris Lema has done a great analysis here of the features you should look for in a membership plugin.

Secure Video Hosting with VdoCipher

While TV is a major competitor to VOD platforms, video piracy poses a bigger, existential threat. Our statistical study shows that 1 in 5 of the internet population uses a video downloader tool. Your customers, who should help you bring in new customers through word-of-mouth, can just as well share their user password or download the content directly.

If your users share passwords among themselves, the number of people that they share it with would be the audience lost to your VOD platform. So if every 4th user shares it with 4 other friends, there is 1 lost subscriber to every paying subscriber. By combating piracy you can double your income from your SVOD platform. Losses from online sharing of videos are much higher. 

VdoCipher’s secure video streaming offers a full-stack DRM, helping you battle piracy effectively. Security features include –

  • Server side encryption in Amazon S3 making sure your files are secure in the cloud
  • Encrypted video streaming ensures that files remain secure throughout the streaming process
  • Player authentication using OTP – User’s video player is authenticated at the time of playback, meaning non-authenticated users cannot log in, and the video cannot be shared on any unauthorized website
  • Dynamic watermarking – Text/image overlay over the video, deterring pirates from using screen capture software

Use VdoCipher for your video on demand platform
Online businesses also often require features over and beyond video security. VdoCipher fulfills all major requirements for enterprise video hosting. The complete set of features that VdoCipher offers for enterprise video hosting may be found here.
Check out our analysis of the TVOD – Transactional Video on Demand model to evaluate the right business model.

The Netflix revolution – Part 1: History of Netflix

Here at VdoCipher we are in awe of how over its history Netflix has consistently innovated in streaming video. Over the history of Netflix, the company has maintained a content catalogue which would be delivered at first via mail. When the technology infrastructure became available Netflix pioneered video technology, which revolutionised home-based video entertainment. The technical decisions that Netflix takes often serve as guides for VdoCipher’s course of action, while the long-term vision that the company has executed in its two decades has helped it standout from competition. Netflix offers a fantastic glimpse into how long-term strategy and decision-making ensured the company crested the wave of vastly increased internet connectivity in recent years.


  1. Introduction
  2. Netflix’s Subscription-based Business Model
  3. Competition with Blockbuster
  4. Netflix launches Streaming Video on Demand
  5. Partnership with Hardware Platforms
  6. Shift to the cloud
  7. First Major Content Licensing Deal
  8. Netflix and the Culture of Binge Watching
  9. Original Programming
  10. Separating DVD and Streaming Video
  11. Domestic Growth in US and International Expansion
  12. Conclusion: From Dot Com Bubble to Baring its FANGs

In this first edition of our multi-part blog series on the streaming video giant, we take you back to how Netflix has evolved over the two decades of its existence. Netflix started as a personalized web-based movie recommendation and rental system, transforming over the years into a streaming video giant. The management’s commitment to digital content has enabled Netflix to emerge as the biggest name in the streaming video industry, and more importantly, to stay at the top of its game as it expands globally and seeks to capture increasing audiences internationally.

Founded in 1998 by Reed Hastings and Marc Randolph, the story of Netflix’s founding must be situated amidst the dot com bubble. This was a time when online businesses would sell consumer goods directly via their dot com domains. Amidst the excitement around internet-enabled delivery of services and goods, companies like, WebVan and offering to sell goods directly to consumers raised funding from venture capital firms. However owing to flawed business models which meant losses at each sale, these companies burned cash from the outset.The dot com bubble crashed in due time.

Netflix's DVD-on-mail plus Streaming Video subscribers in the period 2000-2011

In September 1999 Reed Hastings implemented a subscription-based business model. Netflix, although unprofitable until the mid-2000s, survived the dot com bubble. The company offered DVDs via US Postal Service, and had put up their catalogue online. Relying on US Postal Service’s delivery meant that Netflix could focus on their core offerings of a curated and personalized catalogue.

Netflix’s unique offering was its web-based catalogue of films. Instead of having storefronts, the primary means by which customers could access the catalogue was online. This meant that every user in every part of the country could have access to the full library that Netflix possessed, rather than being limited to the titles the nearest stores carried. This also meant that users could shop around for the films they wanted to watch in the leisure of their homes.

Netflix streaming video helped boost their subscription growth

Netflix’s Subscription-based Business Model

The company at the time struggled with two fundamental problems in their business model. One was that because the DVD was sent via mail, it would take anything between one day to 4 days for the shipment to reach the subscriber. Even though people were likely to try Netflix, conversion to repeat rentals was low. Secondly, people would far more inclined to rent out the latest releases. For the company to break even on the cost of purchasing a DVD to rent-out, they would have to generate 15-20 rentals for each DVD.

Two of the most important elements of Netflix’s business model emerged out of their responses to the problems. The company shifted to a recurring-revenue model – the subscription model – which improved second-time movie rental rates considerable. Customers were locked in to the platform, and were therefore much more likely to try rentals again. The company also created a queue, one in which users would select the movies they would like to watch next. This speeded up the process for subscribers to receive another DVD once they returned their first one. This also eliminated the point of late fees charges – the motivation for returning DVDs was to get another DVD to watch by mail. Netflix business model of subscriptions was a response to the problem of retaining customers. Secondly, to enable maximum utilization of their DVD content catalogue, the company created their movie recommendation system. Through Cinematch Netflix would recommend shows for their subscribers to watch. The point for this was to alleviate pressure for DVD rentals away from new releases, to a more uniform renting out of their content library. This solution has over the years become considerably sophisticated, and drives how customers experience Netflix and how the company makes decisions when acquiring new content.

Netflix’s response to these problems was reflective of how the management was focused on building a sustainable business model, as opposed to growing up too fast. Instead of focusing on building a huge content library the company instead optimized their DVD-on-mail solution for their existing library. This business decision was what helped the company survive the crash that followed the dot com bubble.

Barry McCarthy, CFO of Netflix from inception till 2010, spoke to the Unofficial Stanford Blog on Reed Hasting’s idea of the subscriber-based model in an industry where video rentals were centered around retail stores:

“It was Reed’s insight that the subscription model would resonate with consumers in a compelling way. He re-engineered the Web site and software to support a subscription model…we began to grow exponentially overnight. In 1998, I think the business did $1 million in revenue. In 1999, we did $5 million, then $35 million and then $75 million and $150 million and then almost $300 million…We were I think five years to $500 million and another three years to a $1 billion, all because of the subscription model.”

Netlfix’s business model of subscriptions was strengthened in February 2000 when Netflix started their Unlimited Movie Rental programme. This ‘All-You-Can-Watch’ subscription model, at a fee of $19.95 per month, offered customers unlimited movie rentals in a month, receiving upto 4 DVDs at a time. With a view towards maintain subscriber goodwill and loyalty, the company eliminated all per-movie, shipping and late-fee charges. Netflix, under the direction of technical head Neil Hunt, had by then also implemented their content recommendation system – Cinematch.

Netflix’s content curation was headed by Ted Sarandos, Chief Content Officer. Sarandos joined in 2000, and had prior experience in movie and television distribution. He has managed Netflix’s content offerings over the years, initially curating and providing inputs for the movie recommendation system, and is now a major cog in the wheel of the to the company’s original content – Netflix Originals – initiative.

Competition with Blockbuster

Netflix’s business model and vision in the movie-rental industry was considerably different from that of their chief competitior – Blockbuster. The chief of retail video rental chain Blockbuster, John Antioco, on the other hand believed that video rental was a much more spontaneous process, and that receiving copies in-store and watching immediately was prefered by customers over waiting for days for the DVD on mail.

Amidst this new rental programme, Netflix was losing money. Reed Hastings met with Blockbuster CEO John Antioco in Dallas, proposing to sell a 49% stake in Netflix to Blockbuster for $50 million and in exchange for running Blockbuster’s brand online –, while complementing Blockbuster’s offline DVD rental business. However Blockbuster passed on the deal, believing that Netflix, which was not profitable at the time, did not add value to their own business. It was this inability to see the long-term view, which Netflix was committed to, that led to the contrasting fortunes the two companies faced.

Netflix presented a considerable disruption to the business model of retail video rental chains. DVDs would be sent through the US Postal Service. Unlike Blockbuster for which late-fee was often a significant portion of its revenues, Netflix completely eliminated the late fee, with the incentive for returning for the customer being access to another DVD. Netflix’s products key differences were their lack of stores, instead mailing DVDs ordered online, and secondly not charging late fees. It was Blockbuster’s inability to compete with Netflix on these two counts that ensured that the upstart beat the established company in the home-entertainment ecosystem.

Netflix offered their initial public offering (IPO) on March 24, 2002, bringing in $82.5 million. At the time the company was not profitable, making a loss of $4 million on $30.5 million of revenues. This was, however, an improvement over the previous years figures of loss of $38.6 million on revenues of $75.9 million.

Its battle with Blockbuster was the first big win in the history of Netflix

In 2004 Blockbuster finally entered into the online DVD rental space. They also removed their late fees charges. However these two changes increased costs and reduced revenues, leading to activist shareholders led by Carl Icahn pressuring the CEO against the strategy. Blockbuster’s online initiative lost momentum and the late-fees was reinstated.

Blockbuster’s growth came and market dominance came about in a period when 80% of the company’s shares were held by Viacom. In 2004 Blockbuster decided to make an outlay of $200 million on Blockbuster online, and waived their late-fees charges which would have led to revenue decline of about $200 more. However Viacom exited the company when this strategy was adopted, believing the new path as not being aligned to its own vision. The challenge that the market dominating company was facing was being unable to reinvent its business model in the face of technological shifts. The agile startup Netflix on the other hand continued its growth, achieving growths in both revenues and subscribers, until finally in the 2010s the company expanded exponentially as streaming video technologies matured. John Antioco and executives at Blockbuster on the other hand faced resistance from the new shareholders after Viacom’s exit, who pressured the board to reinstate the late fees and drive down investment in the online business. It was the late entry to the online business, as well as the inability to get the backing of shareholders to implement a top-gear strategy for online video, that ultimately led to Blockbuster’s failure in the face of technological shifts.

Netflix launches Video on Demand

Netflix put further pressure on competition when they announced the launch of their streaming service in January 2007, as Watch Now. At the time the streaming service was expected to be of use only for power users with broadband internet connections, which were not all that common at the time. Users were required to have a 1 mbps internet connection to be able to stream movies, with a 3mbps connection required for streaming DVD-quality films. Subscribers under the $17.99 plan had access to 18 hours of streaming content. Video delivery was through a special browser applet that subscribers would have to install. By 2008 however Netflix had given access to unlimited video streaming for subscribers to its biggest plan .

“We named our company Netflix in 1998 because we believed Internet-based movie rental represented the future, first as a means of improving service and selection, and then as a means of movie delivery,” CEO Reed Hastings said at the time, “While mainstream consumer adoption of online movie watching will take a number of years due to content and technology hurdles, the time is right for Netflix to take the first step.”

About 1,000 titles were available for streaming online, as opposed to 70,000 that Netflix offered in its DVD mail-to-order business. Although digital delivery was part of Reed Hastings’ strategy from inception, at the time of its launch the streaming service was provided as an add-on to the DVD subscriptions business. The primary motivation at the time was to slow down user churn. Q4 2006 results showed a net margin of 4.9%, with a net income of $12.7 million on $255 million of revenues. Although it needed to improve its margins, the company had also been seeing subscriber churn of more than 4% each quarter.

Helped by the launch of streaming video, 2007 was the first time that Netflix generated upwards of $1 Billion in revenue. Over that year the company’s subscriber base grew 18%, revenues were up by 21% and net income was up by 36%, compared to the 2006 figures. The rise in revenue offset the increased costs from the online video initiative and strong competition helping the company generate higher profits.

Netflix’s approach to starting its streaming video service was a gradual process. Launched in January 2007, the company did not roll out its services for all its users at once, instead gradually scaling up the service offerings, completing it for all customers in June 2007. In hindsight, seeing Netflix’s experimentation with its video delivery infrastructure in terms of optimizing for the cloud, this slow and steady approach definitely makes a lot more sense than offering a full fledged streaming service and then dealing with downtime and error rates. Prioritizing building a robust technical infrastructure has helped Netflix keep their first-mover advantage. Oftentimes the first-mover advantage is squandered by technology companies who have to make way for businesses that solve the problem more efficiently. Netflix, however, by relying on a solid content and technical team, has managed to keep its competitive advantage since the launch of its streaming video service.

Partnership with Hardware Platforms

As the company started work towards building a streaming video solution, they also started to develop solutions for streaming video through hardware platforms. In 2004/05 the company was considering working with contract manufacturers on DVD disc drives with a video processor, which could download video content over the internet, and then stream it on TV. This model was similar to TiVo, which enabled TV owners to record TV shows on a disc. This was however shelved as competition with Blockbuster intensified and Netflix had to put resources into engaging in a pricing war with the market leader.

In 2008 Netflix began work on a device for streaming videos. Netflix started work on developing a video player to connect to television, through which streaming video can be played over the internet. However Reed Hastings was concerned that potential partnerships with consumer electronic platforms would be negatively impacted by having their own platform. Roku was subsequently spun out as a separate company.  For much of its history Netflix has had to face questions from cable TV providers whose content it would license, movie studios for movie licensing, as it presented a competition to their respective business models. Being perceived as a threat by the device manufacturers with which it was seeking to partner in the early stages of its streaming video business would hardly have severely limited its growth options. For this reason Netflix decided to spin out the Netflix Player team as a separate company.  

Netflix subsequently partnered with Microsoft for developing a streaming video app for their gaming console. They also later worked with Sony Playstation, developing

Shortly after the launch of Roku, Netflix announced partnership with Microsoft. As part of the partnership Netflix developed a native app for the game console Microsoft XBox 360. This gave access to XBox Live Gold Members access to Netflix on their television via their game console. For Netflix it meant that the market of 12 million XBox Live members was opened up, whereas for Microsoft could market their XBox for the million Netflix subscribers. The deal required Netflix to maintain the streaming video technology exclusively to XBox for an year. Subsequent to that Netflix would develop a Blu-ray disk based streaming video solution for Sony’s Playstation. The company would later go on to generalize the software platform they developed for DVD players to enable Netflix integration via Software Development Kits (SDKs). This also meant that as Smart TVs emerged and prevalence of streaming video over the internet developed over the years, Netflix was essentially prepared and could offer easy integrations.

Shift to the Cloud

In August 2008 Netflix experienced a major database corruption, and could not ship out their DVDs for three days. This was the stimulus which led to Netflix opting to host their business logic on the cloud. This cloud migration would take place for the main part in the period of 2010-2011, and would only be completed in 2015, when the company finally setup its billing infrastructure, the most sensitive part of its business operation, on the cloud. The complete shift to the cloud was a pathbreaker in the tech industry. Netflix has over the years built a highly robust cloud infrastructure, which has enabled the company to scale up seamlessly as it has seen exponential growth and as it has expanded to 190+ countries.

First Major Content Licensing Deal

In 2008 Netflix agreed a deal with Cable TV channel Starz to broadcast their content library for $30 million annually. Starz’s library of 2500 movies and TV shows, including movies Disney and Sony Pictures, became available for streaming on Netflix. The deal was a hugely important step in the history of Netflix, as its streaming video service could now offer a wide range of quality content to their video streaming subscribers. Starz on the other hand, probably expecting the streaming video industry to remain a niche segment, did not expect the deal to cannibalize their own PayTV offerings.

In 2011 Starz stopped its content licensing deal with Netflix, even after Netflix offers $300 million for licensing Starz’s library. Starz CEO went on record saying that he considered the deal a terrible mistake for Starz.

Netflix and the Culture of Binge Watching

Netflix soon started entering into content licensing deals with television studios. For television studios the income from Netflix’s streaming videos supplemented other geographical licensing deals. Television studios only make episodes of previous seasons available, in the belief that showing the episodes from the last aired/ currently airing season would through online video streaming services would lead to them losing users from the cable platforms, who were the primary monetization channel for television studios. Netflix would later turn this monetization scheme on its head when they started licensing original content, becoming a major revenue channel for television studios in their own right.

As more people began tuning into Netflix, content providers found that Netflix helped build audiences for their shows. Cable networks making past seasons and episodes of their television series available on Netflix enabled content discovery. Customers discovering quality cable content on Netflix helped would later tune into the currently airing episodes of the series. This helped boost ratings for television shows such as Breaking Bad and Mad Men, both produced by AMC. Ratings for Season 5 of Breaking Bad were more than double those of Season 1, and many times the ratings of Season 1, largely helped by the audience that Netflix generated for AMC. Netflix helped users catch up to currently broadcasting series, and enabled networks to focus on creating quality content with the knowledge that even a small initial following would convert soon enough to larger audiences.

Shortly before the final season of Breaking Bad aired, the shows’s creator Vince Gilligan reiterated his belief that Netflix helped generate an audience for the show: “Under the old paradigm – using the old technology of simply having first runs and then reruns on networks – I don’t know that we would’ve reached the critical mass that we reached.”

A major point in the history of Netflix was when it inaugurated the culture of binge-watching, and boosted ratings for shows such as Breaking Bad

For television studios, apart from the first run of the series on television, revenues are generated from syndicating TV series to other networks after the end of the season or the series. In this environment Netflix comes in as an added source of revenue for TV studios, besides, as seen in the case of Breaking Bad and Mad Men, Netflix has also enabled broader audiences for quality content through what is labelled as “catch-up TV”.

Original Programming

In 2011, initiating their strategy to differentiate themselves from other services, Netflix started outlaying budget for original programming, with their first original series House of Cards premiering in 2013. Netflix Originals became a critical component of the Netflix Business Model. The original content initiative would enable the company to become less dependent on movie and television studios, giving it leverage over its supply chain of content providers, while helping build a loyal audience. Netflix’s original initiatives would be copied by other OTT providers as well, with companies like Amazon Prime Instant Video and India based Hotstar all investing on originals to broaden their appeal.

Netflix’s decision as to which television shows to license is designed by their content recommendation systems. Their analytics team takes in various factors, including the popularity of the genre, how popular an actor/ director is, and even computing responses to similar content. Because Netflix’s business model does not rely on immediate ticket sales the criteria for a successful series is determined by whether the subscribers on Netflix platform watch the series, and whether the series can inspire a loyal following. The company’s first original license was for House of Cards. The story goes that Netflix ran data on the number of people who rented out the DVD for the UK Television series House of Cards and who watched political dramas such as The West Wing. They likewise computed the numbers who’d shown preference for the films of David Fincher, and who liked Kevin Spacey films. After finding that a significant percentage of their subscribers are likely to watch such a show, Netflix commissioned two seasons of the series, at a total cost of $100 million. This gamble was spearheaded by content head Ted Sarandos, whose reasoning was that the network effects of Netflix would generate sufficient publicity and viewing figures if the show generated even a small loyal following. The idea of creating content for different interest groups, where interest is defined in a much broader and cross-category way, is what drives Netflix’s content strategy. The company entered into a six-film deal with Adam Sandler in 2015. The first film under the deal, The Ridiculuous 8 received generally scathing reviews, and yet Sarandos contends that the film is valuable for Netflix’s subscribers as a large number of people are watching it on their platform. The streaming video provider has definitely seen some failures in recent years – Marco Polo and Get Down being two prominent series that could not achieve a critical mass of followers, and therefore being cancelled. The original content strategy is also important for the company as it expands globally, and as it seeks to penetrate international markets it needs to market content suitable for local tastes.

Spinning out DVD and Online Streaming

In 2011, in a move aimed at generating revenues for further investment into their video catalog, Netflix made major changes to their business model. The company separated memberships for DVD rental and online streaming businesses, getting users to buy different subscriptions. Buying both subscriptions would increase the cost for customer by $6 per month, from $10 for the single membership which included both DVD-on-mail and Streaming video, to $8 each for the two services. Netflix also proposed spinning off the DVD business as a separate entity named Qwikster. As a result of this abrupt price hike, 800,000 left the service, forcing Netflix to partially reverse the decision. Although the price hike remained, Netflix did not spin off the DVD company as a separate entity. Reed Hastings reiterated his belief that the future of home entertainment was in streaming video online, but regretted the communication gap with their customers. Although the move was something of a PR disaster, it was eventually only a blip as the company kicked off its exponential growth. The price rise also helped boost the company’s revenues, putting it in a strong financial position.

Domestic Growth in US and International Expansion

Netflix’s tech innovations have ensured that even though the company contributes to over 30% of peak traffic in North America, its impact on the broader internet infrastructure is minimal. Innovations in video encoding and content delivery have ensured that the company has managed to minimize its footprint, meaning that customers continue to get the best possible experience while not impacting other internet services.

In January 2016 Netflix accounted for 37.1% of traffic in North America’s fixed networks. This share declined to 35.2% in June 2016, which can be attributed to encoding efficiencies that Netflix implemented. Per-title encoding optimization replaced a more general encoding criteria. This ensured that lower bitrates were used for better quality video encoding. For some titles, these optimizations would yield a 20% reduction in bitrates, while achieving a better viewer experience.

The company has innovated in video delivery through the internet by tying up with ISPs to ensure minimal data transfer over the backbone of the internet, so that much of the traffic is routed internally through the ISPs only. Towards this the company’s Open Connect CDN connects through settlement-free peering with most ISPs. The company has also offered to locally cache content at ISPs, through their Open Connect Appliances, which would ensure that streaming traffic would only be local to the ISP. The business logic of customer data and content catalogue would meanwhile be on the company’s cloud services which are installed on Amazon Web Services. Netflix’s cloud operations run out of three different AWS regions – Oregon (US-west-2), North Virginia (US-east-1) and North California (US-west-1), which ensures that the company’s services remain uninterrupted even when entire AWS regions go down. The company has achieved its targetted 99.99% uptime since its move to the AWS cloud.

In January 2016 Netflix launched across the globe. The company’s streaming video service is now accessible in 190 countries, with the only major exception being China, with their cloud solutions scaling up and responding to the demands of global internet requirements.

From Dot Com Bubble to baring FANGs

There has been much internet-enabled transformation in the world that has enabled Netflix’s emergence. The company is a part of the tech industry’s FANGs, an acronym coined by US finance expert Jim Cramer in 2013,  FANGs – Facebook, Amazon, Netflix and Google. Although a relative minnow when compared to FB, Amazon and Google (now Alphabet), the acronym reaffirms how Netflix has over the two decades of its history captured a significant mindshare amongst the internet populaiton.

These tech companies have gained the most as the internet has taken an increasingly more significant role in our lives. Mobile phones have made internet access ubiquitous, meaning that for the youngest generations internet now informs global culture much more than other media. Technological behemoths such as Google and Amazon have enabled technical infrastructure in the form of Platform-as-a-service (PaaS) that anybody can use. By abstracting away the technological complexities and leaving more capabilities in the hands of software developers, these companies have enabled the development of technological infrastructure to develop consumer-facing products. This history of Netflix would have been considerably different were it not for the maturing technical infrastructure and internet popularity.

Amidst a decline in market sentiments around tech companies in 2016, Netflix was one of the very few companies to have a steady stock. This signifies the confidence that investors have over the revenue-model of Netflix. Throughout the history of Netflix the company has been a step ahead of market trends – their decisions towards online catalogue of films, then offering an unlimited movie subscription model, then inaugurating streaming video, and finally creating their niche by investing in original content have contributed to the dominant position the company finds themselves in. In the early 2010s, at a point when its technology no longer served as an effective enough competitive advantage, Netflix took on the incumbent cable television industry by investing in high-quality content. As it reaches saturation in the US market, Netflix needs to expand internationally. Finding the right content formula for international audiences is the challenge facing Netflix.

Premier League is Battling Online Video Piracy

Online Video Piracy is Posing an Existential Threat to Premier League

Online video piracy is increasingly becoming an existential threat for the English Premier League. The Premier League is widely branded as the best league in the world ( often to the dismay of purists who prefer the more technical Bundesliga or the superstar La Liga). The popularity and scale of the Premier League is rising with the wave of record high broadcasting revenues.

The reliance on broadcasting revenues however means that the league needs to ensure that viewers remain on the authorized broadcasting networks, and not opt for illegal video streams. Online video piracy takes away substantial revenue from the broadcasters. This causes reduction in profit margins, making the broadcast deals much less valuable.

The English Premier League was created in 1992, when the clubs in the top tier of English Football broke away from the Football League. The motivation for the creation of the PL was the lucrative opportunity of negotiating an exclusive broadcast deal.

The value of the broadcast deals has skyrocketed over the past few years. From the initial £304 mn for five years of exclusive rights (1992-97) that BSkyB paid, Premier League’s current television deal is worth £5.136bn for three years (2016-19).

Premier League's ever lucrative broadcast deals are being threatened by online video piracy

The money from the ever increasing deals has created a huge inflationary bubble in the Premier League. The result has largely been huge increase in player salaries and transfer prices. This has seen top world-class football talent being attracted by the Premier League’s largesse.

With the broadcasting deal for the period 2019-22 to be negotiated soon after the start of the 2017-18 season, the Premier League is under increasing pressure to combat online video piracy. Ensuring that the broadcaster’s revenue model, which is based on exclusivity, remains profitable is a high priority for the Premier League.

In this blog I seek to explain the business model of the media empire that is the Premier League. The profitability of this model is coming under increasing threat by the online video piracy tools – namely Kodi boxes and online video streaming sites.

History of Premier League Broadcasting deals

In 1992 Premier League shifted to paid satellite television network Sky Sports, after years of the First Division being shown on free to air games. The kickoff time for games was still 3PM, and live broadcast was not allowed. However delayed broadcasts signified that viewers could still watch their team from home without paying for the subscription.

After a bidding process between ITV Sports and BSkyB, with the alleged help of insider information, BSkyB came out victors. Sky bid £304million for a five year contract (although it eventually paid only £191million). This exclusive broadcast deal meant that football viewers would have to buy a Sky Sports subscription with their satellite tv network. This was unprecedented, as previously the live telecasts were available on free-to-air terrestrial networks. In bidding for the broadcast rights to the Premier League BSkyB bet the existence and growth of their TV network on the Premier League. The reasoning was that First Division football had a captive audience of devoted followers, who would pay up the steep subscription costs to be able to watch live football. This gamble paid off, as the company went from losses of £47 million in 1992 to profits before tax of £62 million the following year.

This subscription based revenue model definitely helped News Corporation expand their media and broadcasting empire. Sky TV earned profits before tax of £1.26bn in the period 2012-13.

These profit margins are however under pressure as the costs of acquiring the Premier League TV rights increase with each broadcast deal, and users begin to drop off the expensive services by relying on online video piracy. This pressure on both the costs and on the revenues means that the broadcasters face an existential threat from online video piracy.

Currently Sky Sports and BT Sports have the rights to show Premier League in the United Kingdom, while BBC has the rights to show only the highlights programme, Match of the Day , hosted by the charismatic Gary Lineker.

For the 2016-17 deal, of the £5.136bn payable to PL, Sky paid £4.176bn for 126 matches per season, whereas BT sports paid £960 mn for 42 matches per season. Sky also has first option on match picks for the weekend games, a majority of the second picks, and a large number of third picks as well.

Profitability of Sky Sports has declined due to online video piracy

Sky Sports and BT Sports try to recover these costs through their subscription packages, and from advertising. The revenue model for football depends much more on subscription than on advertising, because of the way the game is played and broadcast. Unlike in cricket where broadcasters have the opportunity to show ads after every 6-ball over, in live football streaming the broadcasters only have the half-time interval in which to show ads. Broadcasters do have opportunities to include ads on the screen during the game, as a footer or side ad, but the loss of value of user experience means that this source of advertising is used only in a limited manner.

Their two main sources of income are from viewers at home, and from their more lucrative Clubs and Pubs Packages, which are used to license pubs showing their games on matchdays. There is however substantial loss of revenue because of online video piracy in both these revenue chains. It is to combat revenue losses through unauthorized channels that the Premier League is aggressively pushing for measures against illegal video streaming and online video piracy channels. PL has taken different approaches for home viewers and for Pubs respectively.

Costs of subscription and the PL revenue model

To understand why users are resorting to online video piracy, it is important to understand the costs that viewers at home and pub owners incur for broadcasting Premier League games.

Currently the cheapest option for home viewers of the Sky Sports package is £36.50/month. The cheapest HD option would cost £58/month. It is in response to the high charges for this is the viewers at home are instead switching to online video piracy websites that offer football content at low prices or for free.

Sky uses the rateable value of pubs to determine pricing for Sky subscription for pubs. The rateable value in the UK is the value associated with a commercial building, based primarily on its size and location, besides other factors such as outdoor space and food and drink availability. These rates are, for a barkeeper interviewed by Hull Daily Mail, in the range of $1,000 per month for Sky and $400 per month for a BT Sports subscription.

The Sky Package for pubs covers 126 Premier League games and England home cricket matches. Additional rates are charged for F1 racing packs. These high costs for the Pub package add a major budgetary constraint for pub owners. With their backs to the wall amid rising costs and competition from other pubs, many pub owners opt to stream Premier League content routed through set-top boxes loaded with software (Kodi boxes) that stream games from illegal video streaming servers. This online video piracy problem is exacerbated by the high costs and by the ready availability of pre-loaded Kodi boxes that stream content through set-top boxes and through the internet.

Structural Changes to Viewership Patterns

The Sky Sports deal in 1992 marked a major structural change in sports viewership. Users had to lock-in to the Sky Sports ecosystem to be able to follow the national English sport of football. Over the previous 25 years however, there has been another major technological disruptor to how users watch sports – the internet.

Video streaming over the internet has become more prevalent, what with an extensive network of Content Delivery Networks and the ability to setup streaming servers in offshore locations where anti-piracy measures are made futile.

During the 2014 World Cup there were a total of 30million viewing hours of football streamed on ESPN in USA. In the same world cup there were a total of 20million page views of illegal streaming sites globally. While not exactly comparable – the American market forms a small subsection of the global football market, this reveals that illegal viewers of live sports events are numerically significant and represent loss of revenue equivalent to a major sports-following nation.

There were over 20 million views of World Cup 2014 through illegal video streaming sites. Online video piracy of this scale is roughly comparable to viewership figures of United States.

People have started to view online content through other avenues as well now. FIgures of 18-49 year olds has declined since the age of the internet

The Guardian reported in October 2016 that viewership figures have been down for the Champions League, and posed the question: Are these changes a blip or a trend? In other words is the reason for the lower viewership figures incidental factors relevant to a limited period of time, or instead actual effects of a structural change in viewership patterns. There is no conclusive answer yet, but it is undeniable that internet sources of following the match are changing the way football followers experience the sport.

It is not just the online pirated streams that are competitors to TV viewership – social networks provide an active community discussing match events real time. Major newspapers the guardian and telegraph provide a live blog covering the sports games. While not a direct substitute for the live video, live blogs definitely make the absence of live video much less acute for non-subscribers, diminishing incentives for subscribing.

Vines and GIF highlights are also used in these social networks to share highlights of the game. The ubiquity of the camera, internet and video-clip creating software means that very often vines are online within seconds of a highlight of the match – say a goal or a red card. This is a very disaggregated way of sharing content, and creates another headache for Premier League broadcasters, who have clearly been unwilling to go after end viewers.

Use of Kodi Boxes and Software for Online Video Piracy

In response to the high costs for subscription to Sky and to BT, many homeowners opt to setup Kodi Set-top boxes.

Since the major source of revenue for Sky comes from pubs that subscribe to the the Club and Pubs membership package, a number of these pubs now stream directly from non-British EU broadcasters, through set-top boxes. Set-top boxes preloaded with channels with much lower subscriptions are used to stream live games.  

Pre-loaded Kodi Boxes are used for online video piracy through computers and set-top boxes

Kodi itself is a free software application. It is an open-source media player that can integrate with different OS (Windows, Linux and Mac) and different platforms (Smart TVs, Set-top boxes and mobile phones). Because it can be installed on any device – computers, smartphones and on Set-Top boxes, unlicensed add-ons can be bundled with Kodi boxes that could give users free access to paid content. It is this act of bundling illegal add-ons that is illegal, and which the Premier League is trying to actively combat. With the latest ruling, ISPs can block access to entire online servers found to be illegally streaming premier league games. This creates a significant disincentive to pirates looking to stream the matches for profit.

Premier League can now get the servers that are used to broadcast video streams over Kodi Boxes blocked. Previously Premier League could only target and block individual stream sources, which users can shift to other sources. Now by being given the ability to target the computer servers means a major boost in the fight to block online piracy.

in February 2017, authorities conducted raids across North-west England, arresting individuals selling illegal Kodi boxes to bars and pubs.

Amazon recently banned sale of pre-loaded Kodi boxes on their platform in a major step forward towards combating online video piracy.

Litigation Against Pubs televising Premier League Games using EU subscription

The Premier League has conducted an aggressive litigation campaign against pubs streaming games through Kodi Boxes. These litigations have yielded both success and setbacks for the Premier League.

Karen Murphy of Portsmouth succeeded in her lawsuit against the Premier League,where the court ruled that the Premier League’s enforcement of only British subscriptions was anti-trust, and violated EU’s requirements of non-exclusivity. The Karen Murphy case was ruled upon in October 2011. The landlord of the Red and White pub in Portsmouth showed live Premier League games using a subscription (costing £800 per year) for Nova, which held the PL rights for Greece, as against Sky which cost £700 per month. The European Court of Justice ruled that Premier League cannot enforce exclusive access to broadcasters as such a system was contrary to EU law.

Karen Murphy of Portsmouth used Nova Sports, streamed from Greece, instead of Sky Sports. This is a form of online video piracy that is now made illegal on the basis of copyright infringement.

Since then the Premier League has developed another mechanism of enforcing the exclusive broadcast networks through a legal technicality – enforcement of copyright law. This is because Premier League’s logo (ordinarily shown throughout the match) and Premier League’s anthem (shown at the start of the match) are copyright material, and that showing this material without the Premier League’s consent is infringement of copyright. These logos, which are visible as a watermark outlay on the screen, and on player jerseys throughout the game (acting as a real dynamic watermark) mean that it is impossible for clubs to show the game in real time without obscuring the logo (and protecting themselves from litigation).

Cannot target users for fear of public backlash and because of EU ruling

Although the Premier League and the broadcasters have aggressively targeted pubs that show illegal streams through non-British (and cheaper) subscriptions, and through Kodi boxes, they have not yet started aggressively acting against end users. The reasons for this are two-fold

  1. EU Judgement – A landmark EU judgement in 2014 from the Court of Justice of the European Union ruled that viewing copyrighted material without explicitly downloading content is not piracy, and does not cause any breaking of piracy laws. This is because the cached files are temporary, and only transient and incidental to technology use. The relevant section of the judgement rules:
  2. Article 5 of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the copies on the user’s computer screen and the copies in the internet ‘cache’ of that computer’s hard disk, made by an end-user in the course of viewing a website, satisfy the conditions that those copies must be temporary, that they must be transient or incidental in nature and that they must constitute an integral and essential part of a technological process, as well as the conditions laid down in Article 5(5) of that directive, and that they may therefore be made without the authorisation of the copyright holders.

  3. Customer Backlash – Going against end viewers using online video piracy would be disastrous from a public relations perspective. With users already having options of alternate media streams, any action against end users (as opposed to intermediaries such as pub owners or Kodi box sellers) is likely to cause outrage and lead to litigation against the monopoly of television rights. Already pub owners streaming from other EU based broadcasters can legally stream from those broadcasters, undercutting Premier league broadcasters in England only. For a key customer facing organization, invoking the customer’s displeasure is definitely strategic hara-kiri and would do nothing to combat the actual challenge of online video piracy.


Ultimately revenues from subscription are critical for the maintenance of the premier league bubble. With clubs tied down to 4-5 year wage costs, the Premier League needs to maintain the same price evaluation for the next broadcast deal, which will be announced in the 2017-18 financial period, for the period starting 2019. That streaming premier League be profitable for broadcasters is the bottomline that the Premier League needs to ensure, whether by enforcing strict litigation against pirates, or by offering a bigger content package to end-users and making their services more affordable.

Free LMS plugins for online course

The Definitive Guide to Free LMS Plugins for WordPress

Are you overwhelmed by the vast range of paid and free LMS plugins available on WordPress? You’ve just started with creating your online course, and do not quite know which LMS plugin – paid or free – to get started with.

Free LMS Plugins are Ideal to Create Your First Online Course

When you are a first time online course creator you are much more likely to want to test your content with a free LMS plugin. Whether it is to cut costs or to simply test the viability of your content in the form of a course, free LMS plugins offer a great opportunity to get started with selling your online course. Whatever the hype around the Senseis and LearnDashs of the world, oftentimes a simple free LMS plugin could do a good enough job of hosting your online course.

The LMS have either a paid pro version, or if not then paid integration to other wordpress plugins.  Because this post is about setting up your website through free tools, I will only be discussing the features that the free LMS and the free integrations offer.

LifterLMS (Paid Pro Version)

LifterLMS has a wizard to guide new users on using the LMS. If you are new to the WordPress ecosystem, a user wizard can be extremely helpful in helping you navigate the tools you’re going to be using. A user wizard signifies that the developers are careful enough about user experience.

Free LMS Plugin - LifterLMS

Beyond the welcome page the LMS wizard tells you about the custom pages that the LMS adds. These include a course catalog, a single archive page for all your courses, a membership catalog wherein all your memberships are listed, a checkout page for integration with a payment gateway, and a student dashboard for students to manage their profiles.

Once you get past the wizard, the LMS welcomes you with a ready-made course on building a Learning Management system with this free LMS plugin. I mean what is a better way to guide your users than through a course built on your LMS plugin. Obvious, right, but LifterLMS are the only ones who have had the ingenuity to come up with the obvious.
The free LMS plugin LifterLMS has a wizard to guide you through the course creation process.

Each Course is broken down into multiple sections, each of which in its place hosts lessons. Within the main page you can manage the entire course structure, manage students and enrollments, and define content access according to membership roles.

Lifter LMS offers everything you can reasonably expect from a free plugin. If you are short on time, LifterLMS is definitely the plugin to help you ease through the learning curve that operating an LMS requires.

Namaste! LMS

Where LifterLMS tops in usability and ease-of-use, Namaste! LMS comes out top in the features department. The interface of this free LMS plugin is pretty straightforward, and does not require much effort. The plugin button on the admin menu directs you to the course, lesson and assignments pages. There is a ‘To Do’ button for administrators to manage pending student enrollments, lesson completion and homework assignment solution approval.

Free LMS Plugin Namaste! LMS

Course Certificates can be created from the same drop down menu. The vast majority of customizations are enabled through the options page. This LMS creates multiple user roles, and lets you decide which student roles are allowed access to content. So for example you may wish to restrict access to content to only enrolled students, in which case this is the plugin for you. Likewise there are WordPress roles for who is allowed to administrate the LMS.

Namaste! LMS creates its own custom post type – the Namaste_Courses. It is however great to find that users can edit this. So if you’ve previously tried other LMS, you can carry on with this plugin quite conveniently by changing the course type to the course type used by the previous LMS used.

I was a little disappointed not to find the option to make quizzes. Namaste! LMS does however support the free Watu plugin, using which you can create quizzes. Both Namaste! LMS and Watu come with Pro versions – the Watu Pro plugin allows creating of question banks and randomizing quizzes. However, for most requirements the integration of the free Namaste! LMS and Watu plugins works out fine for course requirements.

All in all the Namaste! LMS plugin packs a great number of features. There is also a vast number of shortcodes to customize your course pages, all of which makes this one of the most feature-packed free LMS.

CoursePress by WPMUDev 

CoursePress by WPMU DEV offers a free LMS with free integration to eCommerce tool MarketPress. Using MarketPress you can package your course as a product and sell it on the MarketPress platform.

Free LMS Plugin CoursePress

CoursePress is a no-frills LMS plugin. With this free LMS plugin you have  options to create the course, add units and to manage users in one tab. Their seven step course creation process also allows you to manage course details, instructors, classes and enrollments, besides generating certificates on course completion. All these settings are accessible from one page, which does make the process of customizing the course seem convenient.

WordPress Admin Panel for free LMS plugin CoursePress

The User Interface that comes with CoursePress is comfortable, and gets the job done for most requirements. The MarketPress integration however feels a bit bloated – the pages for you to configure the sale prices, discounts seem feature rich, but seem glitchy when you try to implement it.

All in all, CoursePress comes out as a basic plugin to create your course. It provides a basic interface for creating your course. Although most functionality is bare-boned, it can be integrated with any WordPress themes to give a good look to your online course.

LearnPress by ThimPress

All LMS plugins create a new post type. For example CoursePress creates the “Course” post type. If most LMS use the “Course” post type for their courses, the same course can be edited using any of the supporting LMS. While this increases interoperability, this does have the possibility of muddying up content when the LMS plugins are not completely compatible. LearnPress does things right here, as the course category created here is “LP_Course”.

Free LMS plugin LearnPress

The LearnPress interface takes a little getting used to. Using this free LMS plugin you have the option to create courses, lessons and pages directly. It is better to create the course, lesson and quizzes separately, and to then assign quizzes to lessons and lessons to courses. You’ll have a much easier time that way. This is because although course creation, lesson creation and quiz creation happens on different pages, all of them are brought together in the main course page.

LearnPress does not support question banks – you can only use a question once in a quiz, and the quiz only once in a course.

Outside of the Course-Lesson-Quiz structure, LearnPress does not quite offer administrators and instructors much options to communicate with learners. Free integrations to BuddyPress and bbPress are available to enable the creation of a social network and forum around your course. For online course creators looking to sell the course for a one-time-payment, to try a Udemy style-model, LearnPress works out pretty much ok.



This is a barebones plugin, and it does not have a pro-version. It enables course, lesson and quiz creation. Quiz only allows for multi-choice or single-choice answers. StudyPress is a free LMS plugin that barely offers any features beyond the mandatory course pages necessary. The few customizations that this LMS offers are adding a ratings page at the end of the course and integration with buddypress.

Free LMS plugin StudyPress

Payment Gateway Options to Sell Online Course

Setting up a payment gateway is essential to sell online courses successfully. You need to setup a solution so that you can receive payments from across the globe. The bottomline to the success of your online video course is your ability to monetize your content. From our conversations with E-Learning video course creators, it is this process of setting up a payment gateway that counts as one of the most stressful aspects of selling online courses.

In this blog we lay out how a payment gateway works, what options to consider when opting for a payment gateway to your site, and what how to actually apply for it.

The Parties to a Financial Transaction

There are essentially four parties to an online financial transaction:

  • The merchant
  • The customer
  • The acquiring bank whose services the merchant uses
  • The issuing bank whose credit card the customer uses

Parties to payment gateway and payment processing to sell online course

Payment Process

The workflow in the payment process works like this:

  1. Payment Gateway receives the card details securely from the customer
  2. Payment Gateway forwards the transaction information to the card agency
  3. Card agency then forwards the request to the Issuing bank
  4. Issuing bank verifies validity of transaction for credit/ debit card (checking card details, balance, expiry dates), and responds with approve/ deny response
  5. The approve/deny response is forwarded by the payment gateway to the merchant website
  6. The merchant then fulfills the order. The issuing bank clears the order only when the transaction is fulfilled
  7. Acquiring bank communicates with the credit card issuer to settle accounts
  8. Credit card issuer makes payment to acquiring bank
  9. Acquiring bank deposits funds to merchant’s approved account

Flow of information in payment processing - payment gateway for e-learning video sellers

Integrating a Payment Gateway to your Page: Options

  1. Hosting payment process on your site: To make the customer experience smoother the merchant hosts the credit card details on their own servers, and transfers it to the payment gateway/ processor which communicates with the relevant financial institutions. You would need to implement security mechanisms to ensure that card details are secure.
  2. iFrame of Payment Gateway on Website – In this method of integration a frame of the payment gateway is included on your website, through which you can then integrate a payment gateway directly to the website. The customer remains on your website, but the data is added to the payment gateway directly, minimizing your data liabilities.
  3. Payment form on another site – This is the simplest process, in which the user is directed to the payment gateway site to enter the card details. The customer is redirected to the merchant’s website after the transaction is completed.
  4. Hosted Tokenization – The customer adds card data on the merchant’s website, but this data is sent directly to the servers of the payment gateways. The merchant website only records a unique token of the transaction, so that merchant website is not liable to possessing the confidential data.

Difference between Payment Gateway, Payment Processor and Merchant Account

Payment Gateway

A payment gateway acts as intermediary between your website and the payment processor, helping to securely transfer information. Payment gateways have to be compliant to PCI-DSS standards (Payment Card Industry Data Security Standard), to ensure that details of your financial transactions are secure.

The payment gateway’s main role is to securely transfer transaction details to the payment processor. Whereas payment gateway’s responsibility is to provide a user interface and communication channel between customer and merchant, it is the payment processor which deals with the various financial institutions to validate the transactions.

Payment Processors and Merchant Accounts

The boundary lines between payment gateway and payment processor are often blurred, and most vendors function as both. Payment Gateways in India combine with banks to provide the payment processor and merchant account services. It is the payment processor which handles transaction data, and communicates with the banks. The bank handles the merchant account activities.

The stage of merchant account creation requires a lot of paperwork efforts. Banks are averse to accept merchants with high-risk business models. For this reason they will ask you for explanations of your business model. The requirements for a merchant account are:

  • Functional website
  • Company identity proof
  • Promoter’s identity proof
  • Company address proof
  • Business model presentation

For an example of merchant requirements, online payment processor ZaakPay provides the details for availing their ZaakPay merchant services.

International Payment Processors

PayPal, Stripe, Authorize.Net and Payline are the most popular international payment processors. WooCommerce offers integration with all of these payment processors. Their unique offerings are

  • PayPal is one of the most widely trusted payment processors. PayPal charges a monthly fees for Pro and Advanced Users. Its ease-of-use and customer support and service sets it apart from competition.

Use PayPal as payment gateway to sell online course

  • Stripe offers an international payment gateway plus processor service similar to PayPal. Through its APIs developers can integrate the payment gateway to their website for free. Its rates are also overall cheaper than PayPal.

Use Stripe as Payment Gateway to sell online course

Merchant Maverick here gives a very detailed explanation on how to choose a payment processor.

Indian Payment Gateways

The most popular indian payment gateways are:

  • PayUBiz – Offers variety of customizations for medium-to-large businesses. One of the mosted trusted brands, their merchant on-boarding process is fast, and the user experience is their highest priority
  • EBS – The first Indian Payment gateway to be PCI-DSS compliant
  • CCAvenue – CCAvenue is one of the longest-serving payment gateways, and is widely trusted and considered reliable. Customer trust is a very important quality in the payment processor industry.
  • InstaMojo – Instamojo offers the cheapest option amongst payment gateway. There are no installation costs, and it is recommended mostly for small-to-medium businesses offering physical goods. Their transaction discount rate is 1.9% for physical goods sale and 5% for digital goods. Their integrations leave much to be desired however, as the service does not offer support for retail payment processors.
  • RazorPay – This option offers netbanking, all cards, and wallets. This is one of the fastest growing payment gateway services.

E-Learning Video Production – Selecting a Camera

One of the first step to executing an E-Learning video production is to select a suitable camera. With the multitude of cameras available in the market and the diverse range of features they offer, it is very easy to get confused. In this blog I explore various features and functionalities that different kinds of cameras offer. In this analysis I discuss DSLRs, Camcorders, WebCams and Digital Cameras. Each of these cameras come at different prices, and whether they are right for you depends on what features and functionalities you are looking for. I’ll begin with a discussion of the technical concepts necessary to understand the specs that cameras offer. An understanding of these concepts will help you navigate much of the jargon that goes around regarding cameras for E-Learning Video Production.

Price of the camera often becomes the driving filter when selecting a camera for E-Learning video production. Along with the camera type I have added the price range to expect for the camera.

Camera Features

  1. Lens Quality
  2. Light Sensitivity of Image Sensor
  3. Aperture Size
  4. Camera Shutter Speed
  5. Size of Image Sensor
  6. Resolution
  7. Depth of Field
  8. Autofocus
  9. Monitor Screen
  10. Frames Per Second

Different Cameras

  1. DSLRS
  2. Camcorders
  3. WebCams
  4. Digital Cameras

10 features in a camera for E-Learning Video Production

Quality of image is determined by:

1. Lens Quality

There are three qualities of lenses to consider: Range of focal Length, Material (Glass/Plastic), and angle of capture and Optical Zoom.

Optical Zoom is defined, for cameras with variable focal lengths as the ratio of maximum focal length to the minimum focal length. Basically a high focal length corresponds to higher magnification and narrower angle of view, whereas low focal length is used by wide angle lenses at lower magnifications. Wide Angle Lens have a range between 35 to 24mm focal length, covering angular range of between 64 Degree to 84 Degree.

What kind of focal length to use for your E-Learning Video Production depends on the camera positioning. If your camera is placed at the opposite end of a big classroom you would need a large focal length lens – high optical zoom cameras would come in handy here. On the other hand if the camera is placed close to the teacher, then a wide-angle lens with low focal length is appropriate, to take in the entirety of the blackboard. High optical zoom gives you much more options about where to place the camera to get the desired look.

Wide angle lenses tend to magnify the distance between the foreground and the background. This is not very desirable for E-Learning Videos. For this reason it is recommended that you record your E-Learning videos at high optical zoom.

It is important to note that digital zoom is different from optical zoom, and in fact only causes blurring of the video in exchange for a narrower final image.

2. Light Sensitivity of Image Sensor

The light entering through the lens and the aperture is captured and processed by the image sensor. ISO is a measure of how sensitive the image sensor is to the incoming light. A high ISO number means high sensitivity, meaning that a low exposure time is required for shooting the picture. A high ISO is not always desirable, as it adds noise to the image.

ISO numbers range from 64 to 12800 (with multiples of 2 beginning from 100, as in 100, 200, 400…) A light sensor with ISO 400 has twice the light sensitivity of ISO 200. Along with the aperture size and camera shutter speed, light sensitivity determines that a photo is properly exposed.

3. Aperture Size

Light enters the sensor through the aperture. The greater the aperture size the more light is allowed. High ISO sensors can work with small aperture sizes as well. The f-number is a ratio of the focal length to the aperture size – the lower the f-number the higher the aperture size.

4. Camera Shutter Speed

The camera shutter speed determines the time of exposure of the image sensor. A greater shutter speed means less exposure of sensor to light. High ISO sensors can work with faster shutter speeds.

5. Size of Image Sensor

The size of the image sensor determines how much light is used to form an image. Full Frame Image Sensor size is 35mm, and is used in high-end DSLRs. A higher image sensor requires a high focal length lens, making the camera + lens setup bulky. Most DSLRs and high-end digital cameras use the APS sensor size, in which the size of the image sensor is around 24 X 18mm. APS is less than half the size of the 35mm image sensor, for which reason it is cheaper to manufacture, and considerably less bulky. Most smartphone cameras on the other hand have much smaller image sensors. Along with the Megapixel resolution, the image sensor size determines the quality of images.

Comparison of sensor size for cameras

6. Resolution

This Number of pixels that the image sensor captures. For point and shoot smartphone cameras the number of megapixels is marketed as the most important aspect of the camera required to produce a quality image. However, if the image sensor is small, then higher resolutions means that the image is very noisy.

7. Depth of field

This is the depth of the object that the camera can capture clearly. A shallow Depth of Field means that the subject is in high focus, and stands out from the background. High Depth of Field on the other hand means that a large area of the image is in focus, and for this reason it is great for landscape shooting. is directly proportional to the distance of camera from object. DOF is inversely proportional to size of aperture. DOF is inversely proportional to focal length. For E-Learning videos a shallow depth of field is desirable.

8. Autofocus 

This is the number of points on the viewfinder of the camera that the camera can focus on. The more the number of autofocus points the better is the ability of the camera to focus on a desired object to get an image.

Read more on Autofocus here:

9. Monitor Screen

Although a secondary feature, a large monitor screen helps you get a better sense of the video being taken, allowing you to edit settings in real time to get the desired image.

10. Frames Per Second

FPS is the number of frames included in one second of video. Basically, the maths works as follows:

  • The greater the framerate the more continuous does the video feel, and therefore a better resolution is achieved
  • Greater framerate means greater video file size, causing demands on bandwidth
  • Framerate works ideally when the screen refresh rate is proportional to frame rate. US and Canada receive 60Hz power supply. For this reason 30FPS is naturally better for video streaming in these countries. In Europe, India and much of the rest of the world power frequency is 50Hz, for which reason 25fps is ideal in these countries.

Different FPS

  • 15fps – This was the frame rate used by early films
  • 24fps – This is the framerate used by the movie industry. This number was a compromise to strike a balance between minimizing cost of using film while retaining the continuity necessary for the video.
  • 25fps – European and Indian video – It is possible to convert 30fps video to 25fps video
  • 30fps – still some jerky motion, but mostly optimal
  • 60fps – very little jerkiness, but higher frames per second means greater video file size, requiring greater bandwidth

A frame rate in the range of 25-30 fps is optimal for E-Learning video productions, ensuring the quality of video and also not causing the file size to be too big.

Further reading – Video Frame Rates, Steve’s Digicam

Cameras for E-Learning Video Production

DSLRs – Price Range $400-500

DSLR for E-Learning Video Production

Digital Single-Reflex Cameras use a combination of mirrors and lenses to shoot high quality photos and videos. Along with the highest range of quality features, DSLR offers a great ability to control the image. To get the best results for your E-Learning video production from a DSLR, you really need know your camera so that you can control individual settings manually.

An important thing to note is that videos are shot on DSLRs in the RAW format. This makes them very big in size – for example you will need a 32GB card to just shoot 15 minutes of video.

Image sensor in a DSLR is bigger than in point and shoot cameras or camcorders – meaning that even if a camcorder and a DSLR have the same number of megapixels, there would still be a great deal of noise in the camcorder. This is because in smaller sensor the adjacent pixels can communicate, causing noise.

With DSLR you have much greater options to change the depth of field as per your wishes

For E-Learning videos a shallow depth of field is desirable, as the main focus is on the speaker and the blackboard/ whiteboard.

Among lenses, the 70-200mm lens is one of the most popular DSLR lenses. Wide angle lens (24-35mm) are on the other hand used for landscape photography. To cover entire width of the whiteboard from a short distance it may be more desirable.

Most Popular DSLRs

Nikon D5200 24.1MP Digital SLR Camera (Black) – $510

  • This camera boasts an ISO range from ISO 100 to ISO 6400
  • 18-55mm and 18-140mm lens are available with this DSLR
  • 24.1 MP optical sensor resolution

Canon EOS 700D 18MP Digital SLR Camera (Black) – $390

  • Optical Sensor Resolution – 18MP
  • CMOS Optical Sensor Technology
  • 9-point AutoFocus system

Camcorders – Price Range – $150-200

Camcorder is ideal for E-Learning video production

Camcorders are designed specifically for video shooting. Most camcorders support containers such as MPEG-4 and the codec H.264, meaning that you do not need to spend time and computing power encoding the video to a usable format. Sony uses the XAVC format, which supports the H.264 codec. Video editing is a very processor-intensive process, and shooting on a camcorder makes the video editing much more convenient. Some of the key qualities of a good camcorder are:

  • Zoom Lenses – for example optical zooms of 30X can be expected from good camcorders. Glass lens have much better quality than plastic lens.
  • Image stabilization – Because they are designed for video shooting, the processor and lens system can be designed to enhance image stabilization. Additionally face detection features can be incorporated in the software for the camera, enabling ability to better focus the camera. Optical Image Stabilization is better as lenses adjust to movements to steady the image, whereas Electronic Image Stabilization uses algorithms that may degrade picture quality.
  • CMOS Sensors – Most camcorders currently use the CMOS sensor. For example Canon uses EXMOR R sensor, which is about half the size of the APS-C used in DSLRs. The image sensors used by camcorders are much bigger than sensors in the camera phones.

A useful guide to all camcorder features can be found on Lifewire

Some of the most popular camcorders are:

Sony HD Video Recording HDRCX405 Handycam Camcorder

  • 30X Optical Zoom
  • 26.88mm wide angle lens
  • Uses Sony’s XAVC video format supporting H.264 codec
  • Maximum Bitrate: 50Mbps, Frame Rate: 60p
  • Image stabilization
  • Exmor CMOS sensor

Panasonic HC-VX981K Ultra HD Camcorder with Wi-Fi Twin Camera and 4K Photo Features (Black)

  • 20X Optical Zoom
  • Leica Decoma Lens
  • 5-axis Hybrid Optical Image Stabilization
  • 4K Shooting

WebCams – $60-100

Webcam for E-Learning video production

Webcams are a cheap option, and besides being of use for your E-Learning video production, can also be used for conference calls. Some selling points of webcams include a high megapixel resolution, Auto Focus, glass lens, ability to control brightness exposure, and face tracking. 

Lifewire has a good guide on webcam features to look out for. 

Microsoft Q2F-00013 USB 2.0 LifeCam Webcam

  • 1080p HD sensor
  • Glass element lens
  • Auto focus
  • Wide angle lens

Logitech C920 HD Pro Webcam (Black)

  • 1080p HD sensor
  • Glass element lens
  • H.264 video compression
  • Face tracking and motion detection using logitech software for windows

Digital Cameras – $80-100

Digital Camera for E-Learning Video Production

Digital cameras are, along with webcams, the cheapest option for your E-Learning video production. Good high-end digital cameras such as Nikon Coolpix have image sensors much bigger than those of lower end cameras, and are almost comparable to camcorders. In comparison to camcorders, digital cameras may have a smaller range of optical zoom, meaning that your options regarding camera placement for your E-Learning video production are quite limited. On the other hand the image quality, given an optimal camera placement, is comparable to camcorders. When working on a budget, a quality digital camera is a good idea given that you have an understanding of its limitations.

Recommended Cameras:

Sony DSCW800/B 20.1 MP Digital Camera (Black)

Nikon Coolpix S2800 20.1 MP Digital Camera


Secure Hosting for Flipped Classroom Videos

Secure Video Hosting for Flipped Classroom

The model of flipped learning has the potential to revolutionize classroom teaching. In this methodology learners are assigned videos to watch before a class. By delivering basic instructions through a flipped classroom video, students are much more informed about the subject before class begins. This makes for a much more engaging classroom discussion, ensuring that the passive learning in the traditional classroom is now replaced by a much more active model of learning.

In this blog post, I seek to explain factors you should consider when hosting Flipped Classroom videos. Designing flipped classroom videos is not straightforward. Prior to flipping you need to map out how you are going to be using your video resources, and how the videos would inform your classroom. You would also need to develop a system to ensure that teachers and parents are able to monitor how students follow the video lessons. Tracking how learners interact with the videos is important in making sure that learning from your flipped classroom videos is effective. A custom secure video hosting solution would enable you to tailor your videos and the technical platform for maximum learner engagement.

Free Resources to Use

There are a large number of free videos that teachers can recommend to students for viewing in Flipped Learning. Some of the most popular resources are and MIT OpenCourseWare. There are a large number of channels on YouTube offering quality videos for education.

Creating Your Own Flipped Classroom Videos – Security

You may wish to create your content for students to watch as part of flipped classroom videos. These videos may be of previous classes, or they may be specially made for the flipped classroom. There are many reasons to consider video security seriously when hosting your flipped classroom video content

    • Information security – When making flipped classroom videos, you need to protect details of learners participating in courses, or special details that you may mention in the course. For videos classes made for a specific audience the information security concern is very much relevant
    • Protection of Intellectual Property
    • Controlling access – You may wish to control access to only the students enrolled in a particular class.
    • Protecting Privacy – You can get students to make videos as part of Project-Based Learning. This encourages an entrepreneurial spirit, as such a project would require them to work collectively and collaboratively through the different stages of video creation. It is necessary to protect the privacy of students making the video.

Stages of security in Secure video hosting

Different parts of secure video hosting for flipped classroom video

Different parts of secure video hosting unpacked

  • Video Storage in Cloud – If the file is not encrypted, anybody with a publicly shareable URL to the file on the cloud can download without requiring authorized access.
  • Encrypted Transmission – Ensuring that while streaming the videos cannot be downloaded and viewed by unauthorized entities, such as during man-in-the-middle attacks.
  • Authentication & Whitelisting – The authentication process involves a key being exchanged between the streaming server and the video player (on the viewer’s computer). This key is used by the video player to decrypt the encrypted stream. Private key transfer is necessary to ensure that only learners logged into your system can access the content. Backend Authentication is one implementation of private key transfer
  • Watermarking – The final stage of video delivery is video playback on the video player. Any analog screen recorder can record this stream, and there is no effective way for a DRM (Digital Rights Management) technology to stop this. Viewer Specific Watermarking is a strong deterrent to screen recording videos, as viewers would be deterred from sharing content that has their IP address or contact details on it.

There are numerous paid solutions in the market currently offering security for education providers. When evaluating DRMs for hosting your videos you should consider the above factors, and how the features offered by Online Video Platforms (OVPs) succeed in providing a complete solution. For example RTMP streaming is used by many companies for securing content, RTMP does not involve local storage of video data, and can be encrypted. However the process of backend authentication iUse Learner Analytics in Flipped Classroom Videos not completely secure, as toolkits such as RTMPDump can be used to give access to third-party applications. Here is a guide to implement variety of secure video hosting technologies for your site/app.

Learner Analytics

Research done by T.Lucke et al is inconclusive about how effective flipped classroom method is in contributing to better performance. Flipped classroom videos need to be assisted by developing learner analytics, to better understand the effectiveness of the technique and what further steps may be taken for more effective and engaging learning.

Interactive Video – In-video quiz and surveys

You can add video quizzes to learn how students engage with video. Results from student performance in the quizzes will be a good indication of how effective the videos are in communicating concepts to learners. Participating in quizzes in the flipped classroom video also contributes to knowledge retention. Students who have an understanding of a concept before class would engage more in the classroom, making for active classroom learning. Besides, teachers can incorporate surveys in the video, for feedback from students and also feedback from school administrators. Interactivity features can be implemented by adding an HTML5 pages within the video – most OVP (Online Video Platform) s can offer this functionality.

Use In-video Quiz for effective learning using Flipped Classroom Video

Use In-video Quiz for effective learning using Flipped Classroom Video

Tracking Offline Learning Using Tin Can API

In Project-Based Learning students engage in activities outside the classroom. It is important to be able to track student learning outside of classroom. The emerging paradigm of Tin Can API links up a learning record store (LRS), in which students are able to record their activity. The syntax in which an activity is represented is:

Person A Did Activity

Noun – Person A (Name of student)

Verb – Did (or any verb, such as watched in case of video, or read for lecture)

Activity – Details of video, or text

Analytics on students watching videos can be measured by integrating video player with Tin Can API.

Support for Secure Hosting for Your Flipped Classroom Videos

For custom video hosting solutions, support services are very important in ensuring smooth transition to using video hosting and in integrating with current IT systems. It is important to evaluate the support services that your OVP offers.

Louis Deslauriers et al published findings from 850 Physics Undergrads at University of British Columbia, in which learners in the traditional classroom technology had an average score of 41%, whereas learners in the flipped classroom program had an average score of 74%. Videos are becoming increasingly important in aiding classroom teaching, and it is very important that you get your flipped classroom videos right!

Streaming Video Hosting to Improve Market Reach

Streaming video hosting is a great way for you to communicate with your clients. Videos offer a way to increase the interactivity of your content, besides helping you develop a personal connection with your customers. Authentically presenting yourself and your product to the customer helps develop customer trust. Customer trust is one of the most important elements of ensuring customer retention.

When should you consider Streaming Video Hosting?

For starters, you should try to understand how effective the combination of visual, audio and narrative is in delivering your message. Does a video send across a better message qualitatively than just text? You can also explore whether if the combination of static visuals and texts in infographics can communicate your message. Understanding the value addition that video offers will help you use videos more effectively. You can then put a much more directed effort towards creating your videos. You can start with storyboarding to conceptualize how the visual, audio and narrative elements of your video come together. When used strategically, Streaming video hosting offers a great way to add value to your message.

Streaming Video Hosting for Storytelling increases engagement with users

Streaming Video Hosting for Storytelling increases user engagement

How to Increase the Interactivity of your Streaming Videos?

You can embed tests and in-video quizzes to increase the interactivity of your course streaming video content. Embedding scripts in your streaming videos can enable you to enhance your message. You can include e-mail capture forms within the video, through which videos can complement your e-mail marketing campaigns.

When considering what content to create through video, a suggestion is to create content that directly answers your audience questions. Try to get audience feedback, and use it to directly answer Frequently-asked questions through videos. When you directly answer audience queries through video it helps you build a better connection with the audience, helping you build customer trust with your brand.

How-to videos are one of the most effective uses of streaming video medium. These videos can be used to explain complex concepts to your audiences. You can use features such as screencasting and whiteboard animation to create great how-to videos.

Streaming video hosting allows for great interactivity

Increase the interactivity of your streaming video content

Factors to consider when deciding which streaming video hosting provider is right for you

  • The first criteria is to understand how the Online Video Platform help you communicate your brand values. How well does the streaming video hosting option reach your customers? YouTube is currently the most popular video hosting site. However, there are many negatives to using YouTube. Because YouTube’s first priority is to keep viewers on its own platform, for which reason it can make other videos available to your viewers. There are considerable distractions to watching videos on YouTube, which can dilute your brand message. For this reason most professional streaming video providers look for custom solutions. VdoCipher offers completely secure and private video hosting, which ensures that you can communicate directly with your audiences.
  • Security – Considering the costs that go towards great videos, opting for security in video hosting is very important. Whether you create content for marketing or for paying subscribers, you would want full control over who can access your control. With VdoCipher’s DRM technology you have full security for your video content, right from the point of streaming video hosting to the time of viewer playback.
  • Customizability – Does the video player allow customization? This comprises of integrating video player theme with your website. VdoCipher offers integrating of custom player skins, to match your website theme.
VdoCipher feature set for Streaming video hosting

VdoCipher feature set for Streaming video hosting

Which Streaming Video Hosting Provider has maximum reach?

  • Content Delivery Networks (CDNs) are networks of storage points, which cache your video content. Video caching locations enable fast delivery of streaming video for all geographical locations. VdoCipher uses Amazon AWS + Akamai CDNs, ensuring that both localized and global populations are served.
  • Devices – Does your video player optimize encoding for mobiles and for desktop. VdoCipher encodes separately for mobile and desktop streaming video, ensuring smooth and seamless experience across both.

How to get Actionable Insights from Streaming Videos?

Streaming video hosting for actionable insights

Get actionable insights from streaming video hosting

Streaming video analytics help you to understand viewer response to your video content. You can learn which videos are more viewed, and also what is the most effective length of videos to maximize customer engagement. Actionable insights from video analytics will help you fine-tune your video message, and to target it more effectively to your customers.

VdoCipher offers streaming video hosting for the case of video on demand. We have a wide range of clients interested in streaming video as part of their services. This includes education and corporate training, marketers, and independent creators. As explained, we offer customized solutions, according to the requirements of our clients.

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