Video on demand is a programming system which allows users to select and watch/listen to video or audio content such as movies and TV shows whenever they choose, rather than at a scheduled broadcast time, the method that prevailed with over-the-air programming during the 20th century. IPTV technology is commonly used to bring VOD to televisions and personal computers.
Television VOD systems can stream content through either a set-top box, a computer or other device, allowing viewing in real time, or download it to a device such as a computer, digital video recorder (also called a personal video recorder) or portable media player for viewing at any time. The majority of cable- and telephone company-based television providers offer:
Some airlines offer VOD as in-flight entertainment to passengers through individually controlled video screens embedded in seatback or armrests or offered via portable media players. Some video on demand services, such as Netflix, use a subscription model that requires users to pay a monthly fee to access a bundled set of content, which is mainly movies and TV shows. Other services use an advertising-based model, where access is free.
Downloading and streaming video on demand systems provide the user with all of the features of Portable media players and DVD players. Some VOD systems that store and stream programs from hard disk drives use a memory buffer to allow the user to fast forward and rewind digital videos. It is possible to put video servers on local area networks, in which case they can provide very rapid response to users. Cable companies have reeled out their own versions of video on demand services through apps, allowing for TV access anywhere where there is a device that is internet compatible. In addition to cable services launching apps that offer on demand video, they have combined it with offering live streaming services as well. The recent launches of apps from cable companies usually have the phrases "go" or "watch" are attempts to compete with Subscription Video on Demand (SVOD) services since they lack having live news, sports, etc. Streaming video servers can also serve a wider community via a WAN, in which case the responsiveness may be reduced. Download VOD services are practical to homes equipped with cable modems or DSL connections. Servers for traditional cable and telco VOD services are usually placed at the cable head-end serving a particular market as well as cable hubs in larger markets. In the telco world, they are placed in either the central office, or a newly created location called a Video Head-End Office (VHO).
The first video on demand (VOD) systems used tapes as the realtime source of video streams. GTE started as a trial in 1990 with AT&T providing all components. By 1992 VOD servers were supplying previously encoded digital video from disks and DRAM. 
In the US the 1982 anti-trust break-up of AT&T resulted in a number of smaller telephone companies called Baby Bells. Following this the Cable Communications Policy Act of 1984 prohibited telephone companies from providing video services within their operating regions. In 1993 the National Communication and Information Infrastructure (NII) was proposed and passed by the US House and senate, thus opening the way for the seven Baby Bells Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific Telesis, Southwestern Bell and U S WEST to implement VOD systems. All of these companies and others began holding trials to set up systems for supplying video on demand over telephone and cable lines.
In November 1992 Bell Atlantic announced a VOD trial. IBM was developing video server code-named Tiger Shark. Concurrently Digital Equipment was developing a scalable video server (configured from small to large for a range of video streams). Bell Atlantic selected IBM and April 1993 the system became the first VOD over ADSL to be deployed outside the lab, serving 50 video streams.
In June 1993 US West filed for a system consisting of the Digital Equipment Corporation Interactive Information Server, with Scientific Atlanta providing the network, and 3DO as the set-top box, with video streams and other information to be deployed to 2500 homes. In 1994-5 US West went on to file for VOD at several cities. 330,000 subscribers in Denver, 290,000 in Minneapolis, and 140,000 in Portland.
Many VOD trials were held with various combinations of server, network and set-top. Of these the primary players in the US were the telephone companies, using DEC, Microsoft, Oracle, IBM, Hewlett-Packard, USA Video, nCube, SGI, and other servers. The DEC server system was used in more of these trials than any other.
The DEC VOD server architecture used interactive gateways to set up video streams and other information for delivery from any of a large number of VAX servers, enabling it in 1993 to support more than 100,000 streams with full VCR-like functionality. In 1994 it would upgrade to the DEC Alpha computer for its VOD servers, allowing it to support more than a million users. By 1994 the Oracle scalable VOD system used massively parallel processors to support from 500 to 30,000 users. The SGI system supported 4000 users. The servers connected to networks of increasing size to eventually support video stream delivery to whole cities.
In the UK, from September 1994, a VOD service formed a major part of the Cambridge Digital Interactive Television Trial in England. This provided video and data to 250 homes and a number of schools connected to the Cambridge Cable network (later part of NTL, now Virgin Media). The MPEG-1 encoded video was streamed over an ATM network from an ICL media server to set top boxes designed by Acorn Online Media. The trial commenced at a speed of 2 Mbit/s to the home, subsequently increased to 25 Mbit/s. The content was provided by the BBC and Anglia Television. Although a technical success, difficulty in sourcing content was a major issue, and the project closed in 1996.
In 1997, Enron Corporation had entered the broadband market, constructing and purchasing thousands of miles of fiber optic cables throughout the United States. In 2001, Enron and Blockbuster Inc. attempted to create a 20-year deal to stream movies on demand over Enron's fiber optic network. However, the "heavily promoted" deal fell through, with Enron's shares dropping following the announcement.
In 1998, Kingston Communications became the first UK company to launch a fully commercial VOD service and the first to integrate broadcast TV and Internet access through a single set-top box using IP delivery over ADSL. By 2001, Kingston Interactive TV had attracted 15,000 subscribers. After a number of trials, HomeChoice followed in 1999, but were restricted to London. After attracting 40,000 customers, they were bought by Tiscali in 2006 who were in turn bought by Talk Talk in 2009. Cable TV providers Telewest and NTL (now Virgin Media) launched their VOD services in the United Kingdom in 2005, competing with the leading traditional pay TV distributor BSkyB. BSkyB responded by launching Sky by broadband, later renamed Sky Anytime on PC. The service went live on 2 January 2006. Sky Anytime on PC uses a legal peer-to-peer approach, based on Kontiki technology, to provide very high capacity multi-point downloads of the video content. Instead of the video content all being downloaded from Sky's servers, the content comes from multiple users of the system who have already downloaded the same content. Other UK TV broadcasters have implemented their own versions of the same technology, such as the BBC's iPlayer, which launched on 25 December 2007, and Channel 4's 4oD (4 on Demand) which launched in late 2006. Another example of online video publishers using legal peer-to-peer technology is based on Giraffic technology which was launched in early 2011 with large Online Video-on-Demand publishers such as US based VEOH and UK based Craze's OnlineMoviesBox movie rental service.
The BBC, ITV and Channel 4 planned to launch a joint platform provisionally called Kangaroo in 2008. This was abandoned in 2009 following complaints investigated by the Competition Commission. That same year, the assets[clarification needed] of the defunct Kangaroo project were bought by Arqiva, who used the technology behind Kangaroo to launch the SeeSaw service in February 2010. A year later, however, SeeSaw was shut down from lack of funding.
VOD services are now available in all parts of the United States, which has the highest global take-up rate of VOD. In 2010, 80% of American Internet users had watched video online, and 42% of mobile users who downloaded video preferred apps to a normal browser. Streaming VOD systems are available on desktop and mobile platforms from cable providers (in tandem with cable modem technology) who use the large downstream bandwidth present on cable systems to deliver movies and television shows to end users, who can typically pause, fast-forward, and rewind VOD movies due to the low latency and random-access nature of cable technology. The large distribution of a single signal makes streaming VOD impractical for most satellite television systems. Both EchoStar/Dish Network and DirecTV offer video on demand programming to PVR-owning subscribers of their satellite TV service. In Demand is a cable VOD service that also offers pay-per-view. Once the programs have been downloaded onto a user's PVR, he or she can watch, play, pause, and seek at their convenience. VOD is also quite common in more expensive hotels. VOD systems that store and provide a user interface for content downloaded directly from the Internet are widely available.
According to the European Audiovisual Observatory, 142 paying VOD services were operational in Europe at the end of 2006. The number increased to 650 by 2009. At the January 2010 Consumer Electronic Show in Las Vegas, Sezmi CEO Buno Pati and president Phil Wiser showed a set-top box with a one-terabyte hard drive which could be used for video on demand services previously offered through cable TV or broadband. A movie, for example, could be sent out once using a broadcast signal, rather than numerous times over cable or fiber-optic lines, and this would not involve the expense of adding many miles of lines. Sezmi planned to lease broadcast spectrum to offer a subscription service which National Association of Broadcasters president Gordon H. Smith said would provide a superior picture to that of cable or satellite, at a lower cost.
Developing VOD required extensive negotiations to identify a financial model that would serve both content creators and cable providers while providing desirable content for viewers and an acceptable price point. Key factors identified for determining the economic viability of the VOD model included VOD movie buy rates and setting Hollywood and cable operator revenue splits. Cable providers offered VOD as part of digital subscription packages, which by 2005, primarily allowed cable subscribers to only access an "on-demand" version of content that was already provided in linear traditional broadcasting distribution. These on-demand packages sometimes include "extras" and "bonus footage" in addition to the regular content.
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Although video on demand generally refers to delivery mechanisms operating in accordance with applicable laws, the motivation for the development of video on demand services can be traced back to peer-to-peer (P2P) networking and the development of file sharing software. These innovations proved that it was technically possible to offer the consumer potentially every film ever made, in a way which does not burden the original provider with the linear costs associated with centralised streaming media. Some P2P services offered movies and TV shows without having paid for the rights. Torrenting is a popular alternative to legal streaming with 6% of global internet traffic involved in file sharing applications. Many legal services such as Spotify use peer-to-peer distribution to better "scale" their platforms. Netflix is considering switching to a P2P model to cope with net neutrality problems from downstream providers.
Transactional video on demand (TVOD) is a distribution method by which customers pay for each individual piece of video on demand content. For example, a customer would pay a fee for each individual movie or TV show that they watch. TVOD has two sub-categories: electronic sell-through (EST), by which customers can permanently access a piece of content once purchased via Internet; and download to rent (DTR), by which customers can access the content for a limited time upon renting. Examples of TVOD services include Apple's iTunes online store and Google's Google Play service.
A growing number of TV stations offer "catch-up TV" as a way for viewers to watch TV shows though their VOD service hours or even days after the original television broadcast. This enables viewers to watch a program when they have free time, even if this is not when the program was originally aired. Some studies show that catch up TV is starting to represent a large amount of the views and hours watched, and that users tend to watch catch up TV programs for longer, when compared to live TV (e.g., regular scheduled broadcast TV).
Subscription VOD (SVOD) services use a subscription business model, where subscribers are charged a daily, weekly, monthly, or yearly fee to access unlimited programs. These services include, Now TV, Netflix, Amazon Video, TVPlayer, Hulu Plus. SVOD services have drawn a lot of attention for their role in films. As of June 2017, Netflix is expected to add nearly 40 original movies to its platform. Hulu has invested its time in creating documentaries for its platform, while Amazon has acquired films from notable producers such as Spike Lee. Because of the large following SVOD services have, Netflix made an appearance at the 2017 Cannes Film Festival in France. Many took offense to this, stating that movies not presented in theaters should be omitted from qualifying from winning the Palme d'Or prize. SVOD services can be seen as highly successful, and will continue to grow their audience for it being "a production house, broadcaster, recommendation and hosting service, and pseudo-DVD rental store."
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Near video on demand (NVOD) is a pay-per-view consumer video technique used by multi-channel broadcasters using high-bandwidth distribution mechanisms such as satellite and cable television. Multiple copies of a program are broadcast at short time intervals (typically 10-20 minutes) on linear channels providing convenience for viewers, who can watch the program without needing to tune in at only scheduled point in time. A viewer may only have to wait a few minutes before the next time a movie will be programmed. This form is very bandwidth-intensive and is generally provided only by large operators with a great deal of redundant capacity and has been reduced in popularity as video on demand is implemented.
Only the satellite services Dish Network and DirecTV continue to provide NVOD experiences. These satellite services provide NVOD because many of their customers have no access to the services' broadband VOD services. Before the rise of video on demand, the pay-per-view provider In Demand provided up to 40 channels in 2002, with several films receiving up to four channels on the staggered schedule to provide the NVOD experience for viewers. As of 2018, Cable pay-per-view channels are now mainly used solely for live ring sports events (boxing and professional wrestling) and concerts. In Australia, pay TV broadcaster Foxtel offers NVOD for new release movies.
Push video on demand is so-named because the provider "pushes" the content out to the viewer's set-top box without the viewer having requested the content. This technique used by a number of broadcasters on systems that lack the connectivity and bandwidth to provide true "streaming" video on demand. Push VOD is also used by broadcasters who want to optimize their video streaming infrastructure by pre-loading the most popular contents (e.g., that week's top ten films or shows) to the consumers' set-top device. In this way, the most popular content is already loaded onto a consumer's set-top DVR. That way, if the consumer requests one of these films, it is already loaded on her/his DVR. A push VOD system uses a personal video recorder (PVR) to store a selection of content, often transmitted in spare capacity overnight or all day long at low bandwidth. Users can watch the downloaded content at the time they desire, immediately and without any buffering issues. Push VOD depends on the viewer recording content, so choices can be limited.
As content occupies space on the PVR hard drive, downloaded content is usually deleted after a week to make way for newer programs or movies. The limited space on a PVR hard drive means that the selection of programs is usually restricted to the most popular content. A new generation of Push VOD solution recently appeared on the market which, by using efficient error correction mechanisms, can free significant amount of bandwidth and that can deliver more than video e.g. digital version of magazines and interactive applications.
Advertising video on demand is a VOD model which uses an advertising-based revenue model. This allows companies that advertise on broadcast and cable channels to reach people who watch shows using VOD. As well, this model allows people to watch programs without paying subscription fees. Hulu has been one of the major AVOD companies, though the company ended free service in August 2016. Ads still run on the subscription service. Yahoo View continues to offer a free AVOD model. Advertisers may find that people watching on VOD services do not want the same ads to appear multiple times. Crackle has introduced the concept of a series of ads for the same company that tie in to what is being watched.
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