The commercial model of any OTT service is integral to its success, and picking the right model for your service depends on a number of factors – the kinds of content you own, your audience demographics, their consumption preferences and the revenue needs of your business. It is not a simple choice to make, with the long term commercial success of the service dependent on picking the right model.
In the OTT space there are three main commercial models; SVOD, TVOD and AVOD. SVOD, meaning Subscription Video On Demand, is becoming the most widely deployed video commerce model for OTT video services, offering viewers content for a single monthly fee. Sometimes this might be everything on the service, other times there are tiers of subscription, with various types of content (like 4K) being available only at the higher tiers. The most prominent service that utilises an SVOD model is Netflix, though many smaller, genre specific services use it as well.
AVOD (Advertising Video On Demand), is a model whereby the content is effectively ‘free’ to view, but viewers have to sit through advertisements before, during and after the content in order to view it. There are likely also advertisements surfaced around the service UI. While AVOD does, in theory, present a win win for service providers – monetised video that users never have to actively pay for – due to the size of audience needed for a decent ROI, it is generally only exclusively deployed on extremely large, prominent services like All4 or ITV Player (both national broadcasters). It can, however, be a very good way of monetising a limited range of free content in order to entice users into signing up for a service.
Finally, TVOD, Transactional Video On Demand, commonly also referred to as Pay Per View. TVOD is especially prominent with event based content, like live sports, where users are asked to pay a one off price to access the content live and for a period of time afterward (though this may be indefinite in some cases). TVOD is also used by services like Google Play and iTunes for single purchases and ownership of TV shows and movies. In many cases, it is used as an add on to an SVOD service, offering the most premium live content that comes at the highest cost to the service. It is largely dependent on the most devoted fans to engage with in order to be profitable.
To this end there is increasingly a need to mix and match elements of different monetisation models so that content can be used and monetised in a way that will draw the most users to a service and keep them loyal – viewers need to feel like they are getting a good deal. Thankfully, Airbeem has these tools built into its platform, so providers can deploy multiple monetisation models around their service to ensure the most compelling offering possible.Contact Airbeem