OTT platforms are said to be money-making. This happens due to their wide monetization functionality. In this article, we talk about the monetization capabilities of OTT platforms in detail.
Ad-based video streaming platforms bring revenue with advertisements. Viewers can access videos without a fee, but they watch advertisement videos instead. This is the way the content creators earn revenue. Companies that want to advertise on the platform pay for a place on it to run commercials.
What is OTT advertising? If interested, learn more.
Here are the reasons ad-based services are popular:
Even though in past years, ad-based video-on-demand services were less popular than subscription-based platforms, it seems like the game is changing. Researchers observe a rising interest in those video streaming services using advertisements as a revenue generator.
The subscription-based approach suggests that a viewer pay a fee for a certain period for access to their library of videos. The period may vary. For example, there are weekly, monthly, quarterly, and yearly subscriptions.
There are reasons for subscription-based services’ popularity:
The subscription-based model has recently been the most popular one. But there is an observation of such a phenomenon as subscription fatigue. Viewers start realizing that they have too many subscriptions and are getting tired of them.
The pay-per-view or transactional-based model offers viewers to pay for a single video and watch only it. While the subscription-based model requires a fee for access to an unlimited number of videos, the transactional-based model charges a fee for watching every video. Viewers can either rent a video or buy it.
Transactional-based platforms are said to be effective and revenue-making due to timely access to recent releases and sports events they offer.
A transactional-based model is especially good for platforms that don’t have a huge library of videos. But it is difficult to build long-term relationships with customers for this kind of platform. It is difficult to make customers watch more and more content as they face a payment process every time.
Some OTT services prefer to combine several models. For example, viewers purchase a subscription to access a library of videos. And they pay an extra fee to watch new releases. Sometimes, the service just divides videos into those available with a subscription and those requiring an extra fee. So, the service uses the subscription-based and transactional-based models.
Some services use a combination of ad-based and subscription-based approaches. They allow users to watch videos for free but with ads or pay for removing ads.
The monetization models can bring a lot of revenue to video content creators. It is essential to choose the one that will be better for your business goals and your platform.