6+ Best OTT Video Monetization Models To Consider in 2024

OTT or over-the-top video streaming has immensely taken a huge shift from the traditional view mode of entertainment via its technology upgrade that has taken the world by storm. It’s true that the coronavirus outbreak has hurt many major industries, while opportunities for streamlines like media and entertainment industry hiked success in plenty.  In reality, OTT monetization platforms have been ruling the M&E industry with its flexible model.

These platforms include apps for watching videos, taking online classes, even attending religious ceremonies and more. 

It sounds to be much lucrative, as the business model allows cable channels and other content providers to stream their videos online without the need to pay a cut in revenue share. This is more largely contributes to the new way of watching entertainment which has become popular with consumers looking for cheaper alternatives. 

Also it increases its capacity with easier access to streaming services that has become increasingly essential for brands to find ways to monetize audience’s OTT viewing habits. 

Did you know that global OTT market size which was valued at $121.61 Billion in 2019, is actually projected to upscale $1,039.03 Billion by 2027 reaching at a CAGR of 29.4% from 2020 to 2027.  

However, there is still a tug of war going on between OTT and traditional TV operators in countries like India. But, over the years all thanks to portable streaming devices such as ; and streaming players such as Roku, Chromecast comparatively video content consumption has seen a huge uptake. 

Considering the current trend of cord-cutting is likely to grow largely, the popularity of streaming video services is booming.. And it’s expected that OTT will prosper even furthermore. It shapes a perfect environment for publishers to take advantage of this scenario. 

Moreover, content providers are finding innovative ways to include ads or monetize their content in numerous ways to reap maximum profit scale.  

In this article we will describe the characteristics of OTT and go into detail about each monetization strategy utilised to deliver OTT content.

Top 6+ OTT Monetization Models That Works Best For Your Business

A business’s revenue model largely depends on type of content you’re investing on. How and what to really choose as your OTT business revenue strategy depends on your audience’s viewing preferences. 

1. AVOD 

What is AVOD? Advertising Video On Demand

Advertising is a common form of monetizing streaming videos where you can create content to be viewed with flexible options — either for free or insert some ads. Increase your revenue share by minting income from advertisers. 

Advantages and Disadvantages of AVOD

• Ads are quite powerful and advertisers pay a huge sum of money for streaming their ads on your unified on top video monetization platforms. 
• Also, you can have the liberty to choose your pricing that’s dependent on type of content that’s chosen for the ad along with platform’s popularity. 
• However, VOD ads are shorter in length and are found to be less premium that those on traditional TV. 

When is the AVOD Monetization Model Suitable?

Traditional TV streaming is ad-supported and is combined with the subscription model. It assists in monetization of video streaming services where users can skip or watch videos intermixed with commercials without buying subscriptions. 

• Examples

Youtube, Facebook Watch, Pluto TV, are a few examples of AVOD providers 

2. SVOD

What Is SVOD? Subscription Video On Demand

This is the most common revenue model which many online video streaming businesses rely upon. Users are required to pay a fixed subscription fee per month and access a variety of streaming content available on SVOD business model. They can either pause and play, fast forward, rewind or stop to record the streaming at their comfort zone. 

Advantages And Disadvantages Of SVOD 

• They provide unlimited access to ardent collection of video libraries in an affordable price per month or yearly subscription. 
• Moreover, SVOD binds the platform users to a short-term contract and provides the freedom to cancel their subscription whenever they like to. 
• Since subscription video on demand is autorenewable, at any point of time viewers can easily opt-in or opt-out. 
• However, if the user is able to watch all content offered in the package, the bandwidth costs for your business might lead to overall losses.  

When Is The SVOD Monetization Model Suitable?

Subscription models are the best choice for monetizing OTT services with a huge variety of entertainment video content such as Pay TV streaming, movies, TV series, etc to engage their audience on a long term basis tied to a subscription fee. 

• Examples

Consider Netflix, Disney+, Hulu, Apple TV+ and HBO Max which are few instances of SVOD service providers. 

3. TVOD

What Is TVOD?

TVOD stands for Transactional Video On Demand Like the name suggests for TVOD, usually user makes a payment for a particular chose of content or a combination of videos. This can be in the form of facilitating payments for a movie or series combination. This is also one of the best way to monetize video content. TVOD transactions can occur as either short-term rental or purchase it with a long-term license. 

Advantages And Disadvantages Of TVOD

• Buying lets them own particular piece of content and allows it to be kept with themselves either on platform or downloadable to personal devices. Whereas renting lets consumers to use a piece of content only for a particular stipulated period of time. 
• TVOD services will preferably try max to retain its customers by offering special discounts and attractive pricing on a selected piece of content. And then viewers get to skim the latest releases and get benefited with hot buzz offered in the market. 
• Having said that, it doesn’t offer solutions for consumers who want to readily access a wide range of content. 
• Also it may not sound a stable source of revenue as TVOD platform will beed to constantly attract new consumers. 
• On top of that, its impossible to implement free trial opportunities to attract viewers. 

When Is The TVOD Monetization Model Suitable?

Pay per view also works with special events and live streaming, where viewers tend to purchase a particular streaming to view and broadcaster stream the same event to all those who have paid for the event at a particular time slot. 

• Examples 

Consider Prime Video and Apple Music. This works well for longer content, like movies or athletic events, and it encourages customer purchase by providing an alluring price in relation to the content acquired.

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4. Hybrid

AVOD, TVOD, SVOD: The Hybrid Model

The hybrid model provides an umbrella of combined streaming monetization models with two or three of them. For instance, a live streaming platform might have a chance to utilise TVOD model for viewers who are interested to watch a specific live stream, like cricket match. 

But at the same time there is a possibility of having repeat viewers who want to access the entire season without having to pay for each live stream. 

Advantages And Disadvantages Of Hybrid Models

• However, some of the biggest upsides of combining these set of video monetization models inform us with attractive content that’s available for wider audience with different financial interests and potentialities 
• Also, as a result higher revenue potential is reached with the wider user base which opens up for additional revenue streams. 
• On the other hand, the optimization of revenue streams allows to maximize income in much more difficult way wile utilizing a hybrid model. Moreover, while implementing hybrid model, it might be too complicated for smaller platforms or startups to flourish. 

When Is The Hybrid VOD Monetization Model Suitable?

Come what may, the hybridization of video monetization models allow content owners to experience the best of every world. Similarly, a platform can be combined with connected TV advertising for free-accessible content along with subscription-based pricing tiers for viewers who are looking out for more content paired with fewer ads.  

• Examples 

Youtube follows AVOD×SVOD model, Disney+ provides SVOD×TVOD model 

5. PVOD

What Is PVOD? Premium Video On Demand

The premium video on demand or PVOD is a variation of TVOD where end-users can pay for accessing content much sooner than others. For instance, premium movies are released on PVOD first and later subscribers get access via SVOD or TVOD packages. 

They can view the release of content months before it becomes widely available, at a higher ticket price, of course, just like with movie premieres.

Advantages And Disadvantages Of PVOD

The world’s biggest studios rapidly discovered in it an efficient digital alternative to release their films because theatres were shuttered and viewers were stranded at home. 

For new movie releases, let’s take for an instance, subscription-based video services use it as a hook to attract and keep users engaged.

When Is The PVOD Monetization Model Suitable?

Apparently, a workable premium video on demand model gives an usher & offers the best look back on future trends to consider if the traditional rules of video streaming are to be permanently reconstructed.

• Examples

Mulan from Disney is a great example of a PVOD release. Due to the COVID-19 pandemic, it had to miss the theatres and received its first release as a PVOD.

6. Coupons & Promotions

What is Coupons & Promotions model? 

Over the top coupon advertising uses discounts and coupon codes, much like any other video streaming business, to get in and keep customers sticking to the platform. 

Advantages And Disadvantages

Coupons raise brand awareness whether or not they are used. Even though buyers simply utilize the discount to sign up for your OTT streaming service, getting them to engage with your content can result in an upsell. 

To gauge the effectiveness of your promotions, keep track of the quantity of coupons that were used with various codes.

One of the demerits of coupons and promotions can be relatable with seasonal increase of profitability. Also, not everyone might be interested in timely offers and promotions since consumers might not like to wait to arrive in coupons to watch their desired content. 

When Is This Monetization Model Suitable?

You can assess the success of your coupon campaign based on the plan and generate ideas for improved performance if you have focused various coupons on various plans.

Next, we will look into..

Which Type Model To Choose For Your OTT Streaming Business?

1. Type Of Content

You should utilise a subscription-based model if your content is regularly published and you want to develop a devoted audience. Online classes and courses are a couple of instances of content that can be made money off from AVOD. A transaction-based approach will, however, function better if your content is merely enjoyable and a “one-time event,” as it derives from TVOD.

2. Audience

Analyze the number of people who follow you and their purchasing patterns. As an example, adopting an SVOD model may result in fewer followers, but they will be more devoted, whereas using an OTT AVOD service suggests reaching a larger audience because the success of revenue depends on ad views.

3. Strategy

If you’re just starting out, it’s best to experiment with ad-based videos to see how your content will do and how popular it is. You can start using paywalls if your video library is extensive and you are confident that your target audience would pay for it.

Conclusion:

Every OTT provider has an opportunity as a result of the significant tectonic shift in global consumer consumption patterns, regardless of their industry, size, or budget. As SVOD, AVOD, and TVOD, coupons and promotion monetization models are likely to keep evolving, more strategies should be expected to be evolved. 

Content producers must begin with one monetization strategy that satisfies their commercial objectives before introducing additional strategies over time. It gives you the ability to monitor crucial factors like customer experience and creates several fruitful options for audience participation.

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