OTT Monetization: The Ultimate Guide for Professional Broadcasters

It all happened too quick! The shift from cable subscriptions to OTT platforms came in all of a sudden but it wasn’t a surprise at all. With more and more users moving to OTT streaming services, running a subscription-based OTT platform is turning out to be one of the most profitable businesses around.

Finding it hard to believe?

Netflix during the year 2020 alone had a net income of 2.75+ billion U.S. dollars and its subscribers count crossed 200 million the same year. And the recently launched OTT platform “Sling” has more than 2.50 million subscribers now! This only proves how sustainable OTT streaming businesses have become these days!

So, before we get to the part where you’ll be learning how to start an OTT business and make revenue, let’s have a quick intro about what exactly is an OTT Video!

What is OTT Video?         

OTT video (Over-the-top) said simply is nothing but the broadcasting of video content over the Internet on a particular platform. Some of the most popular OTT platforms today are Netflix, Prime Video, Disney+ and more.

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As to the reason why OTT platforms have been embraced to such an extent, it is mainly due to the comfort of watching (at home or anywhere else) on multiple devices like laptops, mobile devices and PCs. And of course, the cost-effective subscription models play a huge role as well!

I mean who would mind spending a few bucks to get themselves entertained?

So, to the next part – how to start an OTT business!

How to Start a OTT Business?

It’s simple! If you know how to stream an online video without any trouble, you can pretty much crack this as well! 

To get started, all you need to have on board is a Video On Demand Software (VOD Software)/OTT Streaming Platform solution. These days, there are a lot of VOD software’s that come with the white label option. But make sure you go with the best VOD software so that the overall process is seamless and hassle-free.

You don’t have to be tech-savvy for this because most of the OTT platform solutions today (especially the one mentioned above????) follow the “all sorted out, ready to use” approach!

Let’s head to the important part of the read!

3 Ways to Earn Revenue from Your OTT Business

What’s the point in running a business when you cannot make revenue from it? Luckily, when it comes to running an OTT streaming business, revenue is something you shouldn’t be worried about! 

Here are the three most common OTT revenue models, 

  • Subscription Video On Demand (SVOD)
  • Transactional Video On Demand (TVOD)
  • Advertising Video On Demand (AVOD)
  • Subscription Video On Demand (SVOD)

Monetizing with subscriptions is the most common method used by OTT giants like Netflix and Amazon to drive revenue. In this model, users would have to pay a substantial amount monthly/quarterly/yearly (depending upon the OTT platform) to watch unlimited video content like movies & series. Users can opt-in for auto-renewal or cancel it anytime they want to! 

Remember mentioning that Netflix has over 200 million subscribers at the beginning of this read? Pumping in a couple of dollars from each user accounts to a grand total! That’s how lucrative the “Subscription Video On Demand” model can be! 

Although, there’s a downfall to this! This method works out well only if you have a large subscriber base. You need to have patience and excellent marketing strategies to grow your audience base before you see the revenue flowing in!

  • Transactional Video On Demand (TVOD)

Businesses looking forward to add some extra money to their wallet might find this as an ideal revenue model. Popularly known as the pay-per-view model, businesses ask users to pay an additional amount to watch exclusive content. This could be a newly released movie or a popular event that just happened.

This model is actually a win-win for both parties – the platform gets to earn some extra revenue (even from non-subscribers) and the user only pays to watch something he finds interesting. But again, you need a significant audience base to crack this one!

  • Advertising Video On Demand (AVOD)

Letting you know examples for this model would be better than explaining. YouTube displays ads when you watch videos. And the same goes for Prime Video as well!

The above mentioned are two classic examples of this business model. YouTube’s ad revenue during the year 2020 was an approximate $7 billion. Huge isn’t it?

OTT platforms in general display ads either at the beginning of the video or in between (in most cases). And they charge a considerable amount for the same. In order to crack this model, all you need to have is a good amount of video views and like we already said, subscribers do matter. Also, popularity can give you an edge here! Remember, “Ads are powerful”!

And to the final part of the read! 

Which OTT Monetization Path You Should Go for?

The answer is quite simple. It’s totally up to you! 

Here’s a more in-depth explanation. It’s you who is going to run your OTT streaming service and take care of things. Right from what kind of videos to approve to the subscription cost each user should pay, it’s going to be your call.

Similarly, you’ve got to identify what would be an ideal revenue model for your business. If you’d ask us, we’d say that one revenue model isn’t going to help you down the lane. It’s better if you try to combine all three revenue models into your OTT platform – more like a hybrid revenue model. And since VOD software solutions today come with this option, it’s going to be a walk in the park! 

That’s it! You’ve covered the basics and all that’s left for you is to do some groundwork and kick it off!