These days, OTT streaming solutions seem to keep ahead of media advancements. The main OTT advantage lies in seamless possibilities, convenience for users, and accessibility. It’s also a reasonable option that many people use.
Did you know that users of this market are set to grow to as much as 2.71 billion people by 2025? That makes the OTT market a dainty bit for people who wish to begin their OTT business.
Today, most of the world uses at least one out of the many OTT platforms, be it Hulu, Amazon Prime, or Netflix. Both content advertisers and marketers are now starting to understand the untapped potential of such audiences. They are leveraging them to advertise their content online and build more than one streaming platform income option.
All Models of OTT Monetization
You will find many OTT revenue models to choose from—so much that first-time dabblers are left very confused. Here are the top models of OTT monetization.
● AVOD
Advertising Video on Demand or AVOD is a freemium model. That means access to the content is free for the viewers. The advertiser pays for placement on the OTT service to reach their target audience.
Hence, a series of advertisements, commercials, and sponsored content with free content is a great option for the AVOD model. You can add pre-roll, mid-roll, or post-roll methods of displaying ads. Some of the best platforms using this model include Instagram, Vimeo, Facebook, and YouTube.
● SVOD
Subscription Video on Demand or OTT SVOD is the most popular and highly sought OTT service provider. The viewer can access the platform at a specific fee by opting to SVOD. That fee may be charged on a daily, weekly, monthly, or yearly basis.
This OTT monetization model also offers an unlimited viewing experience to its users. They can view any content on the platform until their subscription lasts. Remember that this model has been widely recognized and got popularized by Netflix.
The platform opted for this model for marketing syndicating content through their site. These days, Netflix provides its original content together with syndicating content. Other platforms using this model include Hulu and Amazon Prime.
● TVOD
Transactional Video on Demand or TVOD is a model where viewers pay for access to the particular content. It’s suited for the viewers who like an ad-free experience and don’t like access to the whole library of video content.
This model is perfect for extended content such as special videos or some sporting events. These days, YouTube is providing a zero-ads-free experience at a particular subscription fee.
Are you interested in this model? The best platforms using this model are Amazon’s Rent, Sky Box Office, and Apple iTunes.
● Hybrid
This model is a combination of any two of the models described above. For example, a viewer subscribes to a platform for free and gets access to a library of free videos. Like the AVOD model, the content might be scattered with ads, but some videos on the platform might be accessed after a subscription.
That subscription fee might be charged as an SVOD model or pay-per-view. The OTT platform provides a huge library of free videos that are composed of syndicating content. Nonetheless, its premium syndicating and original content are accessible only after payment. YouTube uses this type of OTT model.
Other platforms such as Disney+ are combining SVOD with TVOD. The platform costs about $7 per month but provides TVOD access to new films like Mulan. Another example is Hulu, mixing SVOD and AVOD. Low-level subscribers pay a small cost to watch their programs with ad interruptions. Meanwhile, high-level subscribers pay more but get to watch with zero ads.
How to Choose Suitable Monetization Model for New OTT Business Platform
How do you know if a monetization model is an ideal fit for your new OTT business platform? Before diving in, ask yourself these questions first:
- Do you have the passion for designing and creating engaging content that educates, informs, and entertains your target audience?
- Is your content sought-after or unique enough that people would be eager to pay for access?
If your answer to these questions is yes, then a subscription model is worth a try.
Factors to Consider When Changing Monetization Model for Existing OTT Business Platform
Here are a few things you need to consider if you like to change the monetization model of your current OTT business:
√ Business Strategy
Remember that your business strategy and goals will determine which revenue model you pick. For others, a regular, sustained revenue for subscription works better. Meanwhile, others prefer to provide pay-per-view models to engage users who will most likely invest in their products or services.
√ Target Audience
Your target audience will also demand what monetization model you pick. Regular watchers might be tapped into through subscription models, while unstable target groups can be roped in through pay-per-view systems.
√ Content Offered
Ultimately, the type of content you provide to your audience will greatly impact the monetization model that works best for your OTT platform. Subscription models work well for standard content, while the pay-per-view model service offers exclusive or one-off video content.
Your business should determine your overarching content topic and genre before you narrow in on a revenue model.
Final Thoughts
Whatever OTT monetization model you pick is up to you and the platform you use. Make sure you consider not just your business strategy but your target group, content offerings, and technical possibilities as well.
Not all monetization models fit all content or business types. In today’s day and age, your business should have the freedom to pick the best model for your business goals and needs. It will help if you personalize the monetization model based on your unique business goals and requirements.
Don’t hesitate to take professional consultation if you are looking to start an OTT business and struggling to choose the best monetization model that fits your needs.
We hope this guide has been informative and educational. So, are you ready to pick the best OTT monetization model for your business?
