Video on-demand (VOD) is a form of video media distribution that allows users to consume TV and movie content whenever they choose, instead of having to watch shows at a scheduled broadcast time. During the 20th century, the major form of media distribution was broadcast in the form of over-the-air programming. The development of the Internet and IPTV technology in the late 20th century resulted in a significant switch in content consumption habits with VOD coming to televisions and personal computers.^[1] Unlike broadcast TV, video on demand previously required each user to have an internet connection with considerable bandwidth to access the content effectively. However since the Digital Cinema Initiative^[2] was launched in 2002 by Disney, Paramount, Sony Pictures Entertainment, Universal and Warner Bros. Studios, the JPEG2000 codec was developed alongside the Fraunhofer Institute^[3] for the distribution of movies via Digital Cinema Packages. Subsequently, this technology has filtered down from feature film production into broadcast television which has necessitated substantially less bandwidth for VOD applications.

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 a portable media player for viewing later. The majority of cable and telephone company-based television providers offer:

Internet television is an increasingly popular form of video on demand. VOD can also be accessed via desktop client applications such as the Apple iCloud online content store or through Smart TV apps such as Amazon Prime Video.

Some airlines offer VOD as in-flight entertainment to passengers through individually controlled video screens embedded in setbacks or armrests, or offered via portable media players. Some VOD 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, such as YouTube, use an advertising-funded model, where access to most content is provided at no charge; some premium content requires a subscription.

Downloading and streaming VOD 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 rolled out their own versions of VOD 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 live streaming services as well. The recent launches of apps from cable companies are attempts to compete with Subscription Video on Demand (SVOD) services, since they lack having live news, sports, etc.^[4] Streaming video servers can also serve a wider community via a WAN, in which case 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).

VOD services first appeared in the early 1990s. Up until then, it was not thought possible that a television programme could be squeezed into the limited telecommunication bandwidth of a copper telephone cable to provide a VOD service of acceptable quality, as the required bandwidth of a digital television signal was around 200 Mbps, which was 2,000 times greater than the bandwidth of a speech signal over a copper telephone wire. VOD services were only made possible as a result of two major technological developments: discrete cosine transform (DCT) video compression and asymmetric digital subscriber line (ADSL) data transmission.^[5] DCT is a lossy compression technique that was first proposed by Nasir Ahmed in 1972,^[6] and was later adapted into a motion-compensated DCT algorithm for video coding standards such as the H.26x formats from 1988 onwards and the MPEG formats from 1991 onwards.^[7][8] Motion-compensated DCT video compression significantly reduced the amount of bandwidth required for a television signal, while at the same time ADSL increased the bandwidth of data that could be sent over a copper telephone wire. ADSL increased the bandwidth of a telephone line from around 100 kbps to 2 Mbps, while DCT compression reduced the required bandwidth of a television signal from around 200 Mbps down to 2 Mpps. The combination of DCT and ADSL technologies made it possible to practically implement VOD services at around 2 Mbps bandwidth in the 1990s.^[5]

A VOD service was proposed as early as 1986 in Japan, where there were plans to develop an "Integrated Network System" service. However, it was not possible to practically implement such a VOD service until the adoption of DCT and ADSL technologies made it possible in the early 1990s.^[5]

The first VOD systems used tapes as the real-time 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.^[9]

In the US, the 1982 anti-trust break-up of AT&T resulted in several smaller telephone companies nicknamed the 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 US West—to implement VOD systems.^[10] 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 a video server code-named Tiger Shark. Concurrently Digital Equipment Corporation was developing a scalable video server (configured from small to large for a range of video streams). Bell Atlantic selected IBM and in 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 patent to register a proprietary 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 1994–1995 US West went on to file for a further patent concerning the provision of VOD at several cities: 330,000 subscribers in Denver, 290,000 in Minneapolis, and 140,000 in Portland.

In early 1994, British Telecommunications (BT) introduced a trial VOD service in the United Kingdom. It used the DCT-based MPEG-1 and MPEG-2 video compression standards, along with ADSL technology.^[5]

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.^{[11][12][13][14]}

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 a DEC Alpha–based computer for its VOD servers, allowing it to support more than a million users.^[15] 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.^[16] The servers connected to networks of increasing size to eventually support video stream delivery to entire cities.

In the UK, from September 1994, a VOD service formed a major part of the Cambridge Digital Interactive Television Trial^[17] in England. This provided video and data to 250 homes and several 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.^[18] 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.^[19][20] In 2001, Enron and Blockbuster Inc. attempted to create a 20-year deal to stream movies on demand over Enron's fiber-optic network.^[21] However, the heavily promoted deal fell through, with Enron's share prices dropping following the announcement.^[21]

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 several trials, Home Choice followed in 1999 but was restricted to London. After attracting 40,000 customers, they were bought by Tiscali in 2006 which was, 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 Online Movies Box movie rental service.

The BBC, ITV and Channel 4 planned to launch a joint platform provisionally called Kangaroo in 2008.^[22] This was abandoned in 2009 following complaints, which were investigated by the Competition Commission. In that same year, the assets of the now defunct Kangaroo project were acquired by Arqiva,^[23] who used the technology behind Kangaroo to launch the SeeSaw service in February 2010.^[24] A year later, however, SeeSaw was shut down due to a lack of funding.^[25]

VOD services are now available in all parts of the United States, which has the highest global take-up rate of VOD.^[26] In 2010, 80% of American Internet users had watched video online,^[27] and 42% of mobile users who downloaded video preferred apps to a normal browser.^[28] Streaming VOD systems are available on desktop and mobile platforms from cable providers (in tandem with cable modem technology). They use the large downstream bandwidth present on their cable systems to deliver movies and television shows to end-users. These viewers 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 VOD 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 common in expensive hotels.

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.^[29] At the January 2010, Consumer Electronics 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 that National Association of Broadcasters President Gordon H. Smith said would provide a superior picture to that of cable or satellite, at a lower cost.^[30]

Developing VOD requires extensive negotiations to identify a financial model that would serve both content creators and cable providers while providing desirable content for viewers at an acceptable price point. Key factors identified for determining the economic viability of the VOD model include VOD movie buy rates and setting Hollywood and cable operator revenue splits.^[31] 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 the content that was already provided in the linear traditional broadcasting distribution. These on-demand packages sometimes include extras and bonus footage in addition to the regular content.

Peer-to-peer (P2P) file-sharing software allows for the distribution of content without the linear costs associated with centralized streaming media. These innovations proved that it was technically possible to offer the consumer potentially every film ever made, and the popularity and ease of use of such services may have motivated the rise of centralized video-on-demand services. Some services such as Spotify^[32] use peer-to-peer distribution to better scale their platforms. Netflix is considering switching to a P2P model^[33] to cope with net neutrality problems from downstream providers.

Transactional video on demand (TVOD) is a distribution method by which customers pay for each piece of video-on-demand content.^[34] For example, a customer would pay a fee for each 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 the Internet; and download to rent (DTR), by which customers can access the content for a limited time upon renting.^[34][35] Examples of TVOD services include Apple iTunes online store and 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, days, weeks, months, years or even decades 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 Prime Video, TVPlayer and 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.^[36] Hulu has invested its time in creating documentaries for its platform, while Amazon has acquired films from notable producers such as Spike Lee.^[36] Because the SVOD services' large following, Netflix made an appearance at the 2017 Cannes Film Festival. Many took offense to this, stating that movies not presented in theaters should be omitted from qualifying from winning the Palme d'Or.^[36] SVOD services have been 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."^[37]

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 the 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 continue to provide NVOD due to a lack of broadband Internet access for their rural customer bases. Before the rise of video on demand, the cable pay-per-view provider In Demand provided up to 40 channels in 2002, with several films receiving up to four channels on a staggered schedule to provide the NVOD experience for viewers.^[38] As of 2018, most cable pay-per-view channels now number mainly 3-5 and are 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.^[39]

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 is used by several 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. That way, if the consumer requests one of these films, it is already loaded on their 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.^[40]

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 a significant amount of bandwidth and that can deliver more than video e.g. digital versions of magazines and interactive applications.

Advertising video on demand is a VOD model that 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 content without paying subscription fees. Hulu has been one of the major AVOD companies, though the company ended free service in August 2016, which was transferred to Yahoo! View using the existing Hulu infrastructure. Ads still run on the subscription service if the consumer chooses a lesser plan including commercial breaks (though even with Hulu's commercial-free plan, some programs still carry advertising due to programming licensing issues). 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 ties into what is being watched.^[41][42]

Ad-Supported Video on Demand (ASVOD) refers to video services that provide free content supported by advertisements.^[43] Popular services include Vudu, YouTube, PLUTO TV, the ROKU Channel, TUBI, and Crackle.^[44]

Walmart is adding ASVOD original programming to Vudu, and YouTube Originals will be ASVOD by 2020.^[45]