It’s become increasingly clear that media companies must go beyond linear broadcasts to meet viewers’ changing appetites. For the first time in their results, the 2019 edition of Deloitte’s annual Digital media trends survey found that more people have at least one video streaming subscription (69%) than have a traditional pay TV subscription (65%).
In today’s rapidly changing OTT marketplace, content owners need to keep viewers’ attention by understanding their preferences – staying one step ahead of the competition but also deciding on the right monetization model for their business (Advertising (AVOD), Subscriptions (SVOD), and Transactions (TVOD) all covered on many occasions on our blog).
Viewers remain fairly torn regarding which monetization model they prefer. Due to the lack of financial commitment, ad-supported video on demand (AVOD) services remain a popular option and can serve as a powerful acquisition model. AVOD also allows for precise, user-level targeting – making the video inventory attractive to advertisers and lucrative for content owners.
Subscription video on demand (SVOD) viewers are willing to pay for OTT experiences with reduced or no ads – if they find the content offerings valuable and appealing. Pioneered by Netflix and Amazon Prime, subscription video on demand (SVOD) offers a more predictable stream of income for content owners.
While AVOD and SVOD remain the two primary revenue models commonly used by OTT content providers, a few other business models are entering the scene and becoming increasingly popular:
Some OTT services have begun to adopt a hybrid approach— providing both a “freemium” ad-supported service and a premium subscription offering to maximize revenue. This creates a soft transition for converting an audience over to a subscription model. Providers can take this strategy a step further by offering tiered subscription models and gating certain content so that only users who are willing to pay a premium can access it.
Another strategy is to allow users to sign up for or download the service at no cost, but require the purchase of content on a per-title basis through a third-party authentication and payment service. This model is popular for long-form movie content or live pay-per-view content, such as a sporting event.
Also known as Authenticated VOD (AuthVOD), TVE requires users to log in using credentials from another platform, service, cable, or cellular subscription in order to access content. This model is valuable when coordinating with partnerships or managing multiple properties or branded services.
Whether you’re new to the content distribution space or you already have an established subscriber base, consider experimenting with a mix of packages that offer hybrid approaches as an alternative to a traditional subscription plan—allowing users to choose which price plan suits them better.
By choosing the right revenue model for your business, you can develop an effective monetization strategy that will lead to long-term profitability and success. However, capitalizing on this opportunity requires to overcome technical challenges and demand expertise for resolving problems to maximize monetization.
Veeplay helps publishers & broadcasters worldwide create sustainable and scalable business models around ad-supported content over mobile across all platforms with the help of a modular solution that includes a native video player SDKs for iOS & Android, an HTML5 player for the web, and a Server-Side Ad-Insertion platform.
These technologies create a monetization strategy that generates, on average, 25% more revenue for Veeplay’s customers compared to traditional solutions. InPlayer, the world’s leading pay-per-view and subscription solution helps set up and grow recurring revenue for any company that is looking to enable online sales and access management for their video, audio, files, and HTML content.
By teaming up with InPlayer, Veeplay is offering service providers flexibility in their go-to-market approaches with a hybrid monetization model (AVOD, SVOD and TVOD) to set up multi-tiered pricing models for audiences and leverage additional revenues.
Established partners like InPlayer and Veeplay allow you to identify issues, implement new monetization models and have the expertise to help you deliver an effective video monetization strategy with top-quality security and viewing experiences – regardless of connectivity speed, platform, and device.