18 October, 2021

OTT Monetization: Choosing The Best OTT Revenue Models in 2021

By now, most of the general audience has accepted this new trend of entertainment, over-the-top services, which happens to be a great advantage for everyone!

In other words, our target market can make unlimited choices depending upon the feasibility of the viewing experience all covered under one roof!

Whether it’s sporting events, Q&As, friendly catch-ups or product launches, most of the potential customers get tailor-made content bundles via eminent content providers or video publishers in the form of cost-effective entertainment.

As a result, the user demand is at its highest peak as they are able to seek absolute comfort in watching & maintaining its continuity through the means of resourceful internet technology.

Did you know video streaming will account for 82% of the world’s internet traffic, where videos would steadily gain momentum over crowd favorites such as blogs and articles?

Indeed, this cord-cutting trend is here to reside and make the best out of the popular OTT industry achieving greater ROI.

What is OTT and What Are the Benefits of Shifting to OTT Platforms?

Over the top (OTT) content platforms stream videos through the internet and onto smart TVs, phones and other streaming devices. OTT platforms account for a large slice of the pie, both in viewership and market share.

One of the major benefits of the OTT platform is the multiple monetization models available to content marketers and video publishers across industries. OTT services make it much easier to segment audiences using viewership demographics and have a massive volume of people using their services.

Majority of the world is on at least one OTT platform, be it Netflix, Amazon Prime or Hulu. Both content marketers and advertisers are now beginning to understand the untapped potential of these audiences, and are leveraging them to market their content online and develop more than one streaming platform revenue option.

Which OTT Monetization Model Works Best for Your Business?

There are a plethora of OTT revenue models to choose from– so much so that first-time dabblers are often left very confused. There are three factors to consider when selecting the right monetization model:

  • Content Offered

The type of content you offer to your viewers will have a bearing on the revenue model that works best. Subscription models work well for regular content, while pay-per-view monetization model serve one-off or exclusive video content. Businesses must identify their overarching content genre and topic before narrowing in on a revenue model.

  • Target Group

Your target audience will also demand what model you choose. Regular watchers might be tapped into through subscription models while shifting target audiences can be roped in through pay-per-view systems.

  • Business Strategy

Finally, your business strategy and aims will define which revenue model you choose. For some, a regular sustained revenue for subscriptions works better; yet others prefer to offer pay-per-view models to engage those most likely to invest in their service or product.

What are the Popular OTT Revenue Models?

1. AVOD

What is AVOD? It means Ad-based Video On Demand. In this service type, the video content is free to consumers in exchange for strategically placed advertisements. Ad revenue is used to account for production and distribution costs.

Examples: YouTube and Hulu

The benefits of video on demand that is ad-based are:
  • User Acquisition

Since video content is free, AVOD models are more likely to garner a large viewership. The logic is that watching a few minutes’ worth of advertisements is a small price to pay for unlimited free content.

  • Easy Revenue Distribution

There are a variety of OTT video monetization platform options available to AVOD enthusiasts. Pre-roll ads play before the selected video content is paid, while midroll ads pause the video at strategic points to display ads. In-video ads pop up on the screen during the video and can be closed by the viewer.

2. TVOD

TVOD, or Transactional Video on Demand, allows users to buy content on a pay-per-view basis. Users are charged per video, rather than gaining access to an entire catalog.

Examples: iTunes, Google Play

The benefits of TVOD are:
  • Generates Higher Income

Regardless of the length of the video, income is generated because users pay for each video rather than an entire catalog or series.

  • Creates a Niche Range of Videos

TVOD models allow distributors to connect with their audience and offer then video content that they can directly engage with. This creates both a niche range of video and a well-segmented audience.

  • Profitable as a Platform

If there is soaring demand for a particular video category, TVOD models might well be the most profitable of platform designs.

3. SVOD

Subscription Video on Demand models currently churn out the highest revenues, making it the best monetization model for OTT by far. It builds recurring revenue off something that was only built or shot once, by charging periodical subscription feel.

The benefits for users is that a small fee gives them access to an entire catalog of films they can watch as many times as they want.

Examples: Netflix, Amazon Prime
The benefits of SVOD are:
  • High Retention

Since users can access premium content at any time simply by paying a monthly fee, they’re more likely to stick around and use the platform often. 

  • Recurring Charging Models

Subscriptions are deducted automatically once the charging model is set up, so users don’t have to insert their card details each time and businesses don’t have to follow up. 

  • Revenues Can be Diversified

Alongside SVOD, businesses can also offer pay-per-view or ad-based VOD in top ott platforms for video monetization purposes. This diversifies the monetization for VOD streaming services and broadens the potential market, allowing all kinds of people to access premium content through an option that suits them.

Want to know more about the best hand-pick revenue model for thriving streaming success?

4. Coupons & Promotions

Coupons & Promotions are one of the most enticing revenue-building models! Here you can ensure to broaden your viewer base with intrinsic ideated discounts on particular products with coupon codes. You can now pitch your branding strategy responses by providing high-valuable promotional coupons on your best VOD assets and yield high returns.

Examples: Amazon and Netflix

Benefits Of Coupons & Promotions Are:
  • Make it User-Friendly

As platform owners you can make things easier for your customers to access unlimited coupons for your varied video marketing campaigns. Especially on festive occasions you can plan seasonal offers that can be generated for one or many users at a go!

  • Provide unexpected options

Plan your promotional discount strategies in such a way that can keep your customers eye-glued constantly! This can be implemented while you are offering something extra. For instance, you can make the payment feature flexible with cash or discount percent purchases deployed in your own customized VOD solution.

  • Computerized Coupons

Now as a tech savvy take the liberty of generating custom-designed coupon prefixes. Leverage advanced technologies that help you to generate one-time usable or particular reusable coupon codes. Facilitate with the best discount sets to your customers, thus gaining brand popularity amongst your target audience.

5. Catchup TV

Yes, exactly how the term “Catch up” TV is worded, so does it represent its functionality too! This is a great feature especially for those who can actually catch up on movies or TV shows that they might have missed. Now for those users you can provide utmost flexibility, by letting them download their favourite shows through Catchup TV business model.. By this, you can discard your viewer’s worry for missing out some of the most-compelling shows for limited periods of time at certain prices.

Examples: Amazon Fire Sticks and Roku Devices

The Benefits Of Catchup TV Are:
  • Watch Shows at your Time

You can now proudly exhibit your popular videos-on-demand with a flexible monetization model. Customers in your platform can get rid of watching entertaining shows in a fixed programming schedule. For example, customize this option for subscription or VOD premium & likewise add value to your OTT platform with combined marketing strategies.

  • Timely Viewing Pass

You can now also allow your users to have different view-package passes that would be valid upto some amount of time. For example, users can have entertainment series, live sport relays, or special news video passes, etc and catch up with those later upto the validation period. These can be charged at particular costs after knowing the audience’s personal viewing interests.

What are Some Revenue Generating Best Practices That Businesses Need to Know?

  • Payment Security

No matter how tempting your ways to OTT monetization options are to the users, they won’t pay if payment portals aren’t secured. With cases of increasingly sophisticated hackers on the rise, users will want to pay on a secure platform that doesn’t store confidential information or leak it to wrong parties. 

In times like these where Zoombombers and video hackers are almost a daily affair, users want the guarantee that the OTT platform they choose is safe to use and watch videos on. 

  • Server-side Ad Integrations (SSAI)

To avoid laggy content and interrupting viewers with ads, server-side integrations stitch transcoded advertisements into regular video streams, such that the experience of watching remains the same. SSAI enable cross-platform monetization and disguise appropriate ads from ad blockers. 

Conclusion

Not all monetization models fit all businesses or content types. In today’s day and age, businesses must have the freedom to choose the best OTT monetization model for their needs and business goals. 

VPlayed is an enabler of any type of monetization you see fit for your business, regardless of which OTT platform you choose. Set up flexible subscription plans, increase viewership with pay-per-view models or woo viewers with strategically placed ads– you can do it all with VPlayed.

OTT Monetization Models
Dwarakesh Babu

Dwarakesh is Video Monetization & OTT Platform Expert at CONTUS VPlayed. Interested in digging deep into video/audio streaming media tools and Love to blog, discuss and share views on the latest technologies tips, and tricks. He's also passionate about photography loves to capture the pure essence of life.

4 Comments

  1. Smitha Reply

    Good one, We are planned to create a video streaming platform with a variety of contents in it. It’ll be completely entertainment sectors for the viewers. Can you please send me the quotation to build our own streaming platform with a suitable monetization model for us? Thanks

  2. David Reply

    Helpful article for the video content owners to generate revenue from their work with a suitable model that suits different business model.

  3. Mani Reply

    Thanks for the insightful piece of article. I am planning to go for an ad-based streaming platform, I should have an ad strategy based on my viewers viewing preferences. The above mentioned best OTT revenue models will help for me huge.

    Thanks
    Mani

  4. Ancili Reply

    Hi, I’d like to obtain Vplayed pricing for implementing OTT monetization model in our Distance Education platform.

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