One of the most important functionalities for a content provider is monetization. A good idea is to choose a video monetization platform that supports multiple revenue-generating models. You will be able to test which one works better or combine several approaches to diversify your income.
The common monetization models for on-demand content include AVOD, SVOD, TVOD, and hybrid. Let’s talk about them in detail.
Monetization Models to Look For in an OTT Platform
#1 AVOD – Advertising-based Video-on-Demand
AVOD platforms allow viewers to watch videos for free. Instead of paying, people view advertisements during the playback.
While viewers don’t purchase access to content, content providers still generate revenue by running ads on videos. Moreover, advertisers also get what they want as people receive ads based on their interests. Advertisers reach their target customers via video streaming platforms.
Advertising on online streaming platforms is effective due to targeting functionality. Advertisers save costs that could be spent on showing one ad to all people. Instead, viewers with particular interests watch ads with products and services they might enjoy.
The AVOD model is on the rise now since multiple video streaming companies are introducing it. They usually combine AVOD with other models that we are talking about below.
#2 SVOD – Subscription-based Video-on-Demand
SVOD streaming services require a monthly or yearly fee before granting access to the content library. This monetization model is widely spread in the video streaming industry as it is convenient and doesn’t require signing a contract for viewers. Moreover, people can cancel their subscriptions at any time.
Since the subscription cost is usually lower than the price for traditional television, users don’t limit themselves to one subscription. They tend to pay for 3-4 video streaming services to have a wider choice of content to watch.
Experts predict the growth of subscription-supported services.
#3 TVOD – Transactional-based Video-on-Demand
Unlike subscriptions, TVOD services demand payment for each piece of content available on the platform. Customers prefer this type of service when they don’t want to get involved in a subscription but want access to a particular video.
TVOD platforms can allow viewers to rent or download content. Also, they are highly in demand when it comes to live events. In this case, a monetization model is called a pay-per-view. Viewers buy a “ticket” to an event beforehand or right during the event.
Also, providers usually sell premium videos or premieres on a transactional basis, generating more revenue.
This is a suitable monetization model for webinars, concerts, live events, and so on.
#4 Hybrid Monetization Model
With the right OTT platform, providers can utilize a hybrid monetization approach. They can combine several models described above and diversify revenue streams.
For example, a popular trend now is to utilize SVOD and AVOD simultaneously. Platforms create two packages: one involves only videos at a higher price, and another one includes videos with ads at a lower price.
Also, platforms can combine TVOD and SVOD, dividing content into two categories: videos available on a subscription basis and Premium content that requires an extra fee.
However, some platforms offer several subscription plans with different permissions. An illustration is TVALB streaming Albanian TV online that provides customers with a choice: to watch videos on three devices or only on one platform. The price depends on the customer’s selection.
Final Thoughts
Choosing an OTT platform to run your video streaming business is a critical decision to make. Find the one that suits your monetization goals, whether it is subscriptions, advertising, or a transactional-based approach. Another solution is to utilize a hybrid revenue-generating approach.
