As over-the-top (OTT) matures as a medium, consumers are looking for fresh experiences. Shaping new engagement that caters to changing demands will be key to OTT providers’ profitability.

The time is right to imagine new engaging experiences in media and entertainment (M&E), by taking advantage of the latest technology developments in broadband cellular networks. 5G becoming mainstream means increased bandwidth, no more buffering, enhanced viewing with 4K video, at a minimum. With bandwidth no longer an issue, smart devices can also provide interactive experiences. Newer applications will emerge supporting collaboration, which extends beyond web conferencing.

But there’s more – Virtual Reality (VR) and Augmented Reality (AR) can enhance the live streaming experience. Gaming is expected to swell in popularity as augmented reality and virtual reality bring the user interface and experience even closer to reality. Participating in conferences and exhibitions will become more realistic. As will online learning and online consulting businesses, which will gain traction in hitherto unexplored areas like medical, legal, or management consulting.

For OTT providers, the way forward is to plan for scale

While OTT is currently making leaps and bounds in entertainment, OTT providers must peer into the looking glass to foretell and prepare for the opportunities that lie in wait. They must revisit the way they view the platform and look for innovative solutions that prepare the foundation for scale, such as:

• Agility of scalable architecture: Consumer expectations are volatile; companies need to be agile and not rely on a monolithic framework to build their streaming services. Some companies are strengthening the spine of their platform, making it robust, modular, scalable, and easy to integrate with a microservices approach. They might choose to work with a technology partner such as Robosoft to bring together services like ad servers, recommendation engines, billing services, payment gateways, etc., to offer a holistic solution with complete security.

• The right development strategy: In building a platform, OTT providers can choose to offer ready-to-use streaming or bespoke solutions – both have advantages and need to be evaluated based on how they want to position themselves. Off-the-shelf solutions are more affordable upfront, quicker to deploy, and best-suited for OTT providers who want to offer video as a nice-to-have service with just the basic features. Custom-developed solutions, even though they take longer to deploy and have a higher initial investment, offer full control and technology ownership to the OTT platform provider.

• The right monetization strategy: The current monetization models of OTT are nascent, and as young as the medium and technology itself. With new applications such as gaming, television commerce, learning, event streaming, and personal video conferencing, successful experiments in revenue models will spell the next level in maturity for the OTT industry. Stemming from traditional broadcasting roots, advertising and subscription are two prevalent models of revenue – both have their distinct advantages. The OTT provider may prefer one monetization model over the other depending on the nature and format of content and the kind of technology investment they are willing to make.

For example, the advertising monetization model enables free content with ads to consumers across multiple platforms such as connected TV, desktop, and mobile ecosystems. Here, finding new users is easier as it has in-built technology to target opportunities using more accurate data on user preferences. Also, providers can leverage predictive and prescriptive analytics using Artificial Intelligence and Machine Learning and use data for greater personalization of services.

• In contrast, providers choosing the subscription model might be those in the business of entertainment, health, eLearning, etc., and stand to gain long-term value by delivering consistent quality content. Investing in the right technology will help them implement security and encryption integrations that are necessary for this model. In addition, on the web and Android, various payment options can be provided for users to make subscription payments, since viewers may have their own preferred payment modes, and benefit from discounts, rewards, and cashback that third-party payment apps offer.

• Stickiness of the omnichannel experience: Both video and audio streaming services are booming. OTT companies can enable multi-channel, multi-device options for a multi-sensory, seamless experience, especially to woo the digital consumer who is migrating from the traditional platforms. They can improve stickiness by incorporating the adaptive bit rate feature for smooth playback, regardless of device, location, or Internet speed, making it best suited for usage in low bandwidth areas. Other features such as ‘download and view later’ can be embedded with appropriate technology solutions to protect Downloads from video piracy or copyright infringement.

If omnichannel is about having a presence in multiple touchpoints and devices, a multiexperience (a term coined by Gartner) approach connects them all.  It is a customer-first & experience centric design that promises a seamless experience to customers. Below is a comparison chart between multiexperience, omnichannel, and multichannel.

• Protecting proprietary content through Digital Rights Management (DRM): Protection of licenses and prevention of unauthorized distribution of their proprietary content are major concerns for OTT providers that can be addressed through investing in the right Digital Rights Management (DRM) solution.

Nurturing a long-term love affair with OTT

A PWC study estimated that movie theatre box-office revenues fell 71% in 2020, even as Netflix attracted a record 37mn net additional subscribers. As digital consumption in media and entertainment (M&E) continues to build, OTT is poised to replace traditional media & entertainment channels, in a big way.

By gearing up on different aspects – technology investment, business model, and operations – every kind of OTT provider, from the established to the newbie, can fully cash in on the opportunities that are opening up. By becoming future-ready in an already-crowded market, they can promise a consistently engaging and engrossing experience on their platform/app that consumers come back to and fall in love with, all over again.

Over-the-top (OTT) is a medium where customer is king and content rules. The pandemic served as a catalyst for greater OTT adoption, driving home this truth stronger than ever. OTT channels exploded, providing many hours of entertainment at home, and on any device. As the global pandemic took hold in 2020, 36% of consumers say it was a direct driver of them taking out a new OTT subscription.

Propelled by the widespread distribution enabled by OTT, companies are in a race, pursuing content in various ways – generating their own content or turning aggregators, working with small creative houses to produce short films, increasing localization of content, or crowdsourcing.

However, today, to develop a platform and enable OTT is only completing the first lap. The market is crowded with players, big and small, jostling for a toehold. Today’s empowered consumers crave engagement, which means, providers need to build targeted content that will reel in customers and keep them hooked over time. To be a marathoner, the OTT provider needs to be able to both engage and retain.

Building sustained customer experiences led by content

The empowered consumer is spoilt for choice – avoiding both app fatigue and subscription fatigue will be important. This approach is backed by a 2020 Deloitte survey of US consumers – their reason for choosing a particular brand of service seemed to indicate a preference for both a broad range of shows & movies, and content not available elsewhere.

OTT providers can look to win the war for viewers through a number of ways including:

• Top of the mind recall: optimizing AI-based tools and segmentation will be essential for targeted content consumption. For instance, huge success of Korean TV series “The Squid Games” has shot up the demand for similar drama TV series in local languages. Thus, enabling AI to push localized content to a wider audience and providing them with new content areas to explore.
• The right positioning: carving out a unique selling point through a niche segment or a curated experience targeting a hobby or lifestyle preferences will be key. Discovery+ for its unscripted content targeting lifelong learners, Disney+ Hotstar for family entertainment and sports viewing, Netflix for premium or affluent audience, BritBox for British TV shows, Hayu for reality TV shows could be examples.
• New content forms: as more physical events and activities move online – learning, exhibitions, business consulting etc. – podcasts, edutainment, gaming will augment the experience and bring it closer to reality.
• Socially relevant content: With more consumers moving away from traditional platforms, content that integrates the social elements will be in demand.
• Tough going for smaller companies: with their content limitations, they face reduced DAUs, flattening out of subscriptions, and reduced or stagnating advertisement revenues. One way out could be to form alliances to provide variety and choice to viewers or get acquired by larger players.
• Loyalty/Gamification: It will play a role in keeping users engaged. In fact, Netflix has already started to offer exclusive gaming options varying from simple card games to theme based games based on popular TV series like “The Stranger Things” to their subscribed users.
• E-commerce website for entertainment a no-no: over time, intake of users, consumption, revenues, ad revenue are bound to fall and wave of subscribers will flatten or taper.
• Digital Rights Management (DRM): Protection of licenses and prevention of unauthorized distribution of their proprietary content are major concerns for OTT providers that can be addressed through investing in the right DRM solution.
• Super Apps: Super Apps mostly need business collaborations and partnerships to offer various services. Thus, the rise is largely driven by large conglomerates and huge e-Commerce companies to have a sophisticated app addressing all the basic needs of a consumer. Amazon Prime Video launched Prime Video Channels in India in collaboration with 8 OTT partners to showcase premium content from them and make all content available inside the Prime Video App. These partners include Discovery+, Lionsgate Play, Docubay, Eros Now, MUBI, Hoichoi, Manorama Max, and Shorts TV.

Irrespective of the specific genre or direction, the OTT provider chooses to follow, the mandate is clear – shape engaging content experiences for the consumer. The provider can’t become complacent but needs to be ready with a roadmap for retention as well. By investing in technology to build content, engage and elevate consumer experiences, they stand a better chance to gain the elusive competitive edge.

Enabling the X-factor with right experience

The instant global success of OTT as a medium, and is a turning point and milestone in the history of entertainment and broadcasting technologies. There is no other medium that allows a wider potential reach, yet puts the audience in charge. With digital re-shaping the way we interact with each other and how we entertain ourselves, the success of OTT is only the beginning for this medium. From training to gaming to keeping in touch with family, the potential is limited only by imagination.

CX/UX/Personalization: Machine Learning and Artificial Intelligence power up algorithms and predictive analytics to identify consumer behavior, viewing patterns, preferences etc. and tailor the user/customer experience down to the individual consumer. These technologies are already helping the biggest in the business, such as Netflix, Amazon Prime, Hulu, offer unique experiences through product or content recommendations that are most relevant to that individual.

Becoming more ‘immersive’ with 5G: As 5G becomes mainstream, increased bandwidth will support more immersive streaming services such as 4K video and Virtual Reality (VR). Newer applications supporting collaboration – beyond Web conferencing – will emerge as a result. By combining 5G with OTT services, the provider can ensure less buffering and faster streaming, and therefore, venture into 360°live streaming of events etc.

Online gaming: The increase in Smart TV viewing means that passive consumption needs to be supplemented by gamification engines, interactive live television, real-time polls and more – these can be implemented with the help of 5G that promises up to 10Gbps speed and faster response times. With near-zero lag, better connectivity and data speeds, the gaming experience can be truly enhanced.

Shared OTT experiences: consumers realized the importance of spending time with family/friends during the pandemic. This led to the success of events such as Netflix’s Teleparty and Amazon Prime’s Watch Party. Powered by high-speed internet technologies, such services – consumers staying apart, watch movies together on the same video chat, or stream simultaneously within their social networks – could soon become the norm.

Multi-device, multi-platform experience: Consumers can enjoy immersive experiences on different mobile platforms, switching between devices seamlessly – including iOS & Android mobile phones, iPad and Android tablet, Apple TV, Amazon Firestick, Roku or any Android-based smart TV.

Implementing analytics and monetization strategies

The current monetization models of OTT are nascent, and as young as the medium and technology itself. Still stemming from traditional broadcasting roots advertising and subscription have been the existing models of revenue.

Advertising monetization vs subscription monetization: both models have their unique advantages. The nature/format of the content and the kind of technology investment can be deciding factors in the model that the provider chooses eventually.

Learn more about OTT monetization models in detail

The advertising monetization model enables free content with ads to consumers across multiple platforms such as connected TV, desktop, and mobile ecosystems. Here, finding new users is easier as it has in-built technology to targeting opportunities using more accurate data on user preferences. Providers can leverage predictive and prescriptive analytics using Artificial Intelligence and Machine Learning.

In contrast, providers might choose the subscription model if they are looking to gain long-term value by delivering consistent quality content such as those in the business of entertainment, health, eLearning etc. Investing in the right technology will help them implement security and encryption integrations that are necessary for this model.
With new applications such as gaming, television commerce, learning, event streaming and personal video conferencing, successful experiments in revenue models will spell the next level in maturity for the OTT industry.

The OTT industry has observed a major increase in the number of OTT players in recent years. It resulted in the majority of them competing for the same set of customers with very little to separate each other. While content quality on offer is always going to be the ultimate decider, having convenient OTT monetization models for different sets of targeted customers is always a plus point.

OTT monetization mostly revolves around video-on-demand (VOD) models. Here users pay for a pre-recorded and uploaded or live stream content on an OTT platform.

The first quarter of 2021 has seen a 47% increase in OTT subscriptions in the US compared to the first quarter of 2020. The index is now at 1.03, which means the number of OTT subscriptions is more than the number of people in the United States. The American population will be approximately 330 million people in 2020, and the number of SVOD subscriptions is around 340 million. The global OTT market size was valued at $121.61 billion in 2019, and is projected to reach $1,039.03 billion by 2027, growing at a CAGR of 29.4% from 2020 to 2027.

Subscription video on demand (SVOD) services (i.e. Netflix, Amazon Prime) became the largest OTT revenue source in 2016 by overtaking ad-supported video on demand (AVOD) services (i.e. Pluto TV). SVOD’s share of total revenue is expected to increase from 47% in 2017 to 53% in 2023 and AVOD will see a revenue share of 36%.

Modern content consumers are rapidly moving away from time, place and device dependent content sources like traditional cable or Linear television. There is still a tug of war going on between OTT and traditional TV in countries like India. But, over the years thanks to portable smart devices, SmartTVs and streaming players such as Roku or Chromecast, video content consumption has seen an uptake.

Content producers are finding innovative ways to include advertisements or monetize their content to generate revenue. In a path breaking event in the OTT monetization space, Transmit, a next generation streaming media ad platform, introduced OTT’s first fully automated ad break and content monetization for live sports and entertainment.

In this guide, let’s talk about OTT revenue models, OTT advertising benefits, when and why you should apply a certain OTT monetization model for your OTT platform.

What are OTT Revenue Models

There are thousands of OTT broadcasters currently serving their unique content or an aggregation of the most popular content to their customers. All the successful brands are using a multiexperience OTT platform with the right monetization model to generate revenue. But if we were to categorize these OTT revenue models, the number of ways thousands of OTT brands generate revenue comes down to single digits.

There are primarily 4 OTT monetization models available for professional broadcasters. These are:

i) Monetizing with Advertisements

The Ad-based Video on Demand or AVOD model generates revenue with ads. The content aggregator or the content search platform provides the content to users for free. But there is a catch as the content is served with ads to the users.

The broadcasters make money by charging a fee to advertisers in exchange for a place in the content platform to play commercials. The ads are generally played as video ads, sponsor screens, sponsored content and more. A recent survey by Deloitte shows 55% of the US residents use an ad-supported video streaming service.

Examples of AVOD businesses: Pluto TV, Tubi, Xumo, YouTube (non-premium).

ii) VOD Subscription based

Subscription-based Video on Demand or SVOD businesses charge a recurring fee weekly, monthly, quarterly, or yearly for full access to their video platform. The SVOD model was first made popular by Netflix and it still continues to dominate popular OTT businesses today.

Examples of SVOD businesses: Netflix, Apple TV+, HBO, YouTube Premium, Voot.

iii) Transactional based content

Transactional Video on Demand or TVOD is the most straightforward OTT revenue model of all. It works on a one time give and take system like buying or renting an item from a nearby shop. Customers buy or rent videos one at a time based on their needs. This OTT model is sometimes also known as pay per view (PPV) or pay per download (PPD).

Examples of TVOD businesses: iTunes, UFC, Sky Box Office, CinemaNow.

iv) Hybrid (SVOD+TVOD+AVOD)

Truth be told, a hybrid business model isn’t a single established business model. Many companies are putting their own spin to already established monetization models to come up with a hybrid model that works for them.

Some businesses like Disney+ are blending SVOD with TVOD as they are offering access to new films on a transactional basis apart from the subscription. Discovery+ categorized their customers on two levels to mix AVOD with SVOD. The lower fee subscribing customers are served their content with some ads, while higher fee subscribers get the same content with zero ads.

OTT vs VOD: What is the difference

There is one major difference between OTT and VOD. Apart from that the line gets blurrier the more you try to understand the difference.

Typically, OTT umbrella contains three types of content delivery platforms and content.
These are:

• Streaming video on websites or apps like Netflix, Hulu, YouTube, DAZN, Sky Sports, etc.
• Internet-connected devices like TVs (smart TVs) or devices like the Amazon Fire TV stick, Google Chromecast, or the insanely popular Roku streaming device.
• Watching live TV using internet streaming: Popular examples are DirecTV, Sling TV, Hotstar (in India), and the list goes on.

On the contrary, VOD is restricted to content that is not live streamed and can be consumed at any place, any time.

In simple terms, OTT describes “how the content is delivered” while VOD describes “how the content is consumed”.

What are different types of VOD

VOD or Video On Demand enables people to watch their desired videos – anytime, anywhere, and on any video playing device.

Video on demand (VOD) is a promising technology with top-notch and lucrative opportunities in the new cord-cutting status quo. By 2023, Cisco System predicts the number of internet-connected devices to be more than triple of the global population.

OTT has fundamentally changed the content production and distribution approaches when it comes to video consumption. Streaming Media reports that video-on-demand viewing time has grown up to 155% year-over-year, comprising 17 minutes per session on average.

This rapid rise in demand for video content provides endless opportunities to OTT brands to generate revenue using different advertising and subscription models.

Let’s talk about these OTT business models in detail.

AVOD

AVOD is one of the common OTT platform revenue models, where you offer free content to your audience. AVOD businesses generate revenue with ads inserted into the video to monetize it. These can be commercials, pop-ups, or any other type of sponsored content.

Under AVOD, you may choose to run ads at the beginning (pre-roll), in between video plays (mid-roll), or at the end of the video (post-rolls).

Advantages of AVOD monetization model

• AVOD enables businesses to serve free content with ads to their customers across several inventory platforms such as connected TV, desktop, and mobile ecosystems.
• The biggest advantage of AVOD is the possibility of finding new viewers without much effort. With little or no barrier to entry, viewers can get hooked on your content without hitting any hurdles. If you serve a niche demographic or interest group, you may be able to charge higher rates from advertisers enabling you to offer discounted prices to your customers.
• AVOD provides very refined targeting opportunities with more precise data about audience interests than mere age and geo data.

AVOD isn’t as popular among premium content owners and streaming giants mainly because this model generates less revenue compared to SVOD. You may need to gain a substantial audience before you turn a profit.

When is the AVOD monetization model suitable?

If you are serving generic content, how-to and comedy videos, you may use AVOD platforms. These content types usually generate huge viewership, especially the younger audience who are less likely to subscribe or remain loyal to regular entertainment sources. The AVOD model also required you to choose the right ad network to maximize revenue benefits.

SVOD

As mentioned earlier, subscription based video on demand model allows watching as-free video content available on the platform at a flat rate, with a monthly or annual subscription.

With easy-to-unsubscribe policies, SVOD is one of the most lucrative revenue models and makes up the largest segment of the OTT industry.

Advantages of SVOD monetization model

• The SVOD model used by Netflix is extremely popular and hence familiar among households. In fact, a 2019 report finds up to 75% of US households have a SVOD subscription.
• It’s a very efficient model that creates steady income from every customer. SVOD is also associated with high revenue. Because consumers can pay an affordable fee to access the entire content library, many prefer these platforms.
• It provides multiple subscription options to the user to pay weekly, monthly, quarterly, or annually at their convenience.

The SVOD model has a higher entry barrier as big players like Netflix, HBO, Apple TV, Hulu, etc. cover almost 3/4th of the consumer market. This makes it hard to find new customers and harder to retain them. Any change in content, price or the economy causes people to end their subscriptions or switch to another OTT provider. Also, the cost of producing quality content compels businesses to set higher subscription pricing to enable bigger profit margins.

When is the SVOD monetization model suitable?

The SVOD model is perfect for businesses seeking a long-term value by serving constant quality content in the form of movies, TV shows, originals, etc. It is primarily the right choice for businesses focusing on entertainment, health, fitness, eLearning, and other content.

SVOD OTT streaming solutions require extra effort and resources to correctly position your platform in the right target audience. Also, there is the small matter of adopting the best security and encryption integrations to meet the user’s needs.

TVOD

TVOD or Transactional Video On Demand is a rental-based VOD monetization business model where the user rents the content or has access to the service for a short period of time by paying a fee.

TVOD is also sometimes known as pay-per-view (PPV) or pay-per-download (PPD). The model usually involves Download-to-own (DTO) or Electronic sell-through (EST) systems. Another option is renting videos for particular periods.

Advantages of TVOD monetization model

• TVOD is a straightforward and simple model great for serving one-off video content. The power of choice given to consumers lets the businesses charge or offer discounts on the content piece accordingly. Consumers are more willing to pay for high quality content they intend to watch.
• The most attractive reason why TVOD is a great choice is its immediacy. Consumers get access to desired content by renting or buying even sooner than after the general release of specific media content.
• TVOD services enable businesses to retain customers with seasonal content. This strategy suits tutorials, lessons, sports, or other seasonal events. Sky Sports Box Office is a good example of TVOD platforms.

Two of the biggest problems in the TVOD monetization model is getting consistent revenue and gaining consumer confidence. More people are becoming comfortable using services consistently than earlier. Plus having to pay for each additional program can be a frustrating experience.

When is the TVOD monetization model suitable?

Most TVOD businesses work with exclusive content deals and close release windows to drive customers for purchases. TVOD also works best for live streaming services like entertainment events and sports events that are seasonal. The best way to use a TVOD model is to combine it with another VOD monetization strategy for a consistent revenue stream.

PVOD

Premium video on demand or PVOD is more like a special case of TVOD where the user can pay to get access to content sooner than other SVOD or TVOD customers would! For example, premium movies are released on PVOD first and then the subscribers get access via SVOD or TVOD.

Disney’s Mulan was a prime example of a PVOD release. It got its first release as a PVOD as it had to skip the theaters due to the COVID-19 pandemic.

Hybrid VOD

Many OTT platforms are now adopting a hybrid approach when it comes to monetizing their content. AVOD, SVOD, and TVOD hybrid models are a proven approach to profitable advertising in the CTV and OTT ecosystem.

Hybrid VOD monetization model could prove to be the best option in a highly competitive OTT landscape. It offers the best of both worlds to the consumers from TVOD, AVOD, and SVOD. Usually, one of these revenue models is selected as primary, and the others are used for exclusive deals.

Advantages of Hybrid VOD monetization model

The one big advantage Hybrid VOD has over other VOD models is that it provides the best of each monetization model. It also provides flexibility as you can combine selected benefits from each model to create your own hybrid monetization model.

A wisely combined hybrid model can suit nearly any OTT business.

When is the Hybrid VOD monetization model suitable?

Hybrid VOD monetization model works best for businesses who are targeting a vast set of audiences. The second important thing is for your platform to have a vast library of content to cater to each audience type. Therefore, by leveraging the different monetization models, you can meet the needs of various users.

What is OTT Advertising and its benefits

OTT advertising is serving personalized content to different viewers’ devices while they watch the same TV show or movies. Personalized user experience based on AI-powered recommendation engines is one of the most important key factors in designing a successful OTT app. Thus, we can say, OTT advertising is a targeted ad delivery on Internet-CTV sets enabled by programmatic OTT technology.

Due to the widespread adoption of OTT platforms, advertisers can now expand their audience reach that was previously available only on traditional TV. Many consumers in the US are now ‘cutting the cord’ but a report from the Video Advertising Bureau (VAB) says advertising is still essential to the ecosystem.

5 benefits of OTT advertising

OTT advertising is a win-win situation for everybody involved in it. Advertisers love it as they get access to behavioral and personal choice data of consumers they didn’t have access to earlier. Also, they love it for the massive revenue and brand potential such targeted ads can garner. Consumers love it because they get far better options in OTT in terms of content and convenience over regular TV.

Recent advancements in OTT technology made it possible to bring alive both the product and in-store experience of retail brands onto the OTT device. Gree, the world’s largest air conditioner maker, sold 44 million USD worth of merchandise on Kuaishou, China’s leading short-video and live-streaming social platform.

In addition to this OTT advertising also offers:

#1 Sticky ads: If you are an advertiser, you would love a sticky ad where the user can’t fast forward or skip the ad. OTT platforms provide a visible 90 seconds or 2 minutes countdown window to the advertisers to display their ad content. Since the consumers are invested in the OTT content, they let the whole ad play out while resuming the video content afterwards.

#2 Advanced targeting: The OTT registration details of the user cover all the basic demographic data for the advertisers. And after a while, OTT platforms can provide a heap of data about the kind of content a user watches and his behavior. Advertisers can target people based on their unique viewing habits thanks to a comprehensive portrait rendered in numbers.

#3 Advanced reach: OTT advertising provides a unique opportunity to reach the ever-elusive group of ‘cord-cutters’ and ‘cord-nevers’. Broadly speaking, OTT platforms are a boon to advertisers who could formerly only hope to make contact with a blanket TV ad strategy. With the advance reach and advanced targeting capabilities, sky’s the limit.

#4 Advanced attribution: Gone are the days of hoping and wondering for advertisers. OTT advertising can provide attribution in a way that broadcast and linear TV never could. OTT advertisers can now use pixel-based tracking from multiple devices to determine website or product page visits by a potential customer. You can also gauge the time spent on the website, any other clicks made, etc. to gather more actionable data.

#5 First look rights: OTT platforms have the option to provide first look rights to an advertiser. This allows an advertiser to circumvent the targeting restrictions that inherently come with programmatic ad buying and brings several advantages. Now not only do the advertisers get access to top quality content, they can also strategically distribute ads to particular platforms and publishers. This way advertisers don’t have to see a large portion of an advertising campaign go to a single outlet in order to complete an impression campaign.

Which type of VOD is faring well in the current OTT market

SVOD and AVOD are the two most common OTT subscription models found currently with their own place on the market. Advertising is the prevalent revenue model. However, that is going to change as of 2021, 54% of OTT brands plan to change their business models to appeal to a wider range of viewers, with an additional 22 % considering it. Two-thirds of OTT brands are now transitioning to a hybrid monetization approach.

Thus, the best model any publisher can go for is the Hybrid VOD monetization model. It brings the best of both SVOD & AVOD and more.

AVOD expenditure for TV episodes and movies will climb by 144% between 2020 and 2026 to reach $66 billion across 138 countries. AVOD has the highest revenue share of the OTT market of all monetization models. But this revenue fluctuates from season to season and proves to be worse for overall user experience. However, the

AVOD monetization model has a lower barrier of entry and is easier to set up and isn’t dependent on audience size like SVOD.

The SVOD monetization model is excellent for those publishers who are looking for consistent revenue streams. If you have exclusive and premium content for users who are willing to pay for that content, then it becomes a win-win for all parties involved. However, SVOD has a very high entry barrier and is more challenging to set up. It might deter many who’d rather watch free content.

Read about the recent OTT trends and opportunities for current and new brands

Overall, publishers should test all the methods available and see what works for them since the better choice greatly depends on your content type and audience.

Best practices for OTT subscription billing

A good OTT subscription billing experience must deliver:

• Time-to-market speed: OTT billing can also work as a medium for content promotion. However, publishers must create, test, and refine promotions rapidly without much IT intervention every time. This accelerates and improves the customer acquisition process.

• Dynamic retention: OTT platforms have the leeway to manage entitlements of the customers to keep them connected to the content even in the event of temporary issues. This works well for a superior user experience rather than reducing retention from rigid entitlements.

• Support for multiple currencies, languages, and payment options: Consumers love personalization. And what more they would love than seeing their language being used for transactions for their preferred payment method.

• Scale and reliability: If you provide quality content and gain a large user base, you must always be prepared to handle large demands with quick turnarounds. A slow or difficult initial transaction drives customers away.

• Robust finance, tax, and anti-fraud support: Consumers trust their credit and debit card details with you to provide them a seamless experience. Hence it becomes paramount that your billing solution should proactively screen for fraud along with providing a defined revenue and tax format.

• Intelligence for continuous improvement: Have a proactive billing team who are always on the lookout for updated best practices for billing. This way you can benchmark yourself against other OTT providers and stay on top.

How OTT providers are implementing hybrid VOD monetization model

The first step towards implementing a hybrid monetization model is to identify the VOD monetization models that you want to combine. The next step is to identify your primary VOD monetization model and strategize how you are going to introduce the remaining models.

The final step, of course, is to build a multi-device, multi-platform OTT streaming solution that captivates your audience.

Some businesses like Disney+ are blending SVOD with TVOD. Disney+ costs about $X/month, but offers TVOD access to new films like Mulan. Another prominent example, Hulu blends AVOD and SVOD. Low-level subscribers pay a small fee to watch their programs with ad interruptions. High-level subscribers pay more, but get to watch with 0 ads. In this hybrid model, you can make some portion of the content library free-to-view with ads inserted, and lock the rest of the library for paying subscribers.

Looking at Hulu or Apple TV, for instance, both services offer a subscription (SVOD) model. However, you can watch videos with ads for free on Hulu, as an AVOD model. As for Apple TV, the service gives you an alternative to buy or rent movies and shows (TVOD).

Read: How to design an experience-based subscription model for your business

What are other content monetization opportunities available

Apart from the traditional OTT monetization models discussed earlier, content providers can find their own way of monetizing their content. Let’s discuss some of these opportunities below:

Live stream content pre-order

Content providers can put up live stream content for pre-order as soon as the feed is available at their end. This takes care of your marketing, audio & video monetization, and other crucial aspects in one go.

World renowned musician Kanye West hosted a listening event at a stadium in Atlanta for his much awaited music album, Donda. The event was attended by 42,000 fans who paid between $25-$100 per ticket. Not only that, the listening party was live streamed by Apple Music and watched by 3.3 million viewers – a record breaking number. Another such listening party for an updated version of the album recorded a whopping 5.4 million views and $4M in ticket sales. To top it off, the event recorded $7M in merchandise sales at the venue alone.

Crowdfunding & Donation

Some content becomes an instant hit among the people and they just keep coming asking for more. An independent movie or a short TV show, or a short video, it can be anything. You can use the popularity for your benefit by letting your end consumers donate for the next production budget.

Theater and OTT collaboration

Theaters were one of the worst affected businesses in the media industry during the pandemic. But this misfortune created a new opportunity for both theater and OTT players. Towards the end of the pandemic, a group of theater owners have begun to form a consortium and digitally broadcast content in theaters. Thereby theaters have now become experiential spaces for OTT consumption.

Content aggregation

Many up and coming OTT players like Aha TV, Hoichoi use content aggregation to provide off the shelf OTT content to their subscribers. They prepare a combined EPG for all channels and make revenue off the subscriptions for content that is not their own.

End-user wallet

Create a digital wallet for your end users where they can store credit points based on purchases. These users can buy, store, manage and spend their store credits to watch their favorite content anytime they want.

Restricted subscription access

Get restriction access certificates for certain geographically restricted globally popular content. Once you get them, you can allow the streaming of such content for an excess charge in the restricted geographies.

Content creation processes

It is not only the final product that earns money in OTT services. There are multiple monetization opportunities in content creation, content transformation (people use different cameras, aspect ratios etc. during shooting. They need to be synergized into a common format), content processing (adding subtitles, language overlay), content storage and retrieval.

What is new in OTT?

OTT primarily refers to sending content over-the-top or over the internet. OTT monetization models primarily refer to videos (SVOD, AVOD, TVOD). But increasingly there are new content formats gaining much prominence such as text and audio OTT.

Text OTT or OTT messaging refers to the phenomenon where OTT apps use the internet as a method to connect phone calls and send MMS and SMS messages. For example, iMessage, WhatsApp, and others allow users to send messages whenever the device is connected to the internet.

Audio OTT platforms deliver content over the internet to the consumer by procuring content from publishers/music labels/other distributors. The content is usually accessed through an independently hosted application. For example, Spotify, SoundCloud, iTunes, internet radio stations and podcasts.

Monetization of all these current content formats can be coined under new terms – SCOD, ACOD, TCOD – where C stands for Content.

Conclusion

As we are seeing a huge tectonic shift in consumption habits of global consumers, it presents an opportunity to every OTT provider, irrespective of their budget, size and industry. SVOD, AVOD, TVOD monetization models will likely continue changing and

weaving, so we can expect more new approaches to the rapidly developing OTT and CTV market.

The OTT market is inclusive of all publishers as long as they have a sufficient budget. Even if you are a small publisher, you should have no trouble getting a few advertising deals (e.g., with SpotX or Google ADX) to start monetizing and building your revenue stream. The only real hurdle to entering the market will be whether you have a large enough team to handle your development needs.

As the saying goes, a long journey begins with a small step; content providers must start with one monetization model that meets business needs and then gradually integrate other models. It enables you to keep a check on important things like customer experience and opens up multiple lucrative opportunities for audience engagement.

So many businesses have put their own unique spin on the OTT industry. We’re excited to see what combinations are dreamed up next.

With the onset of the COVID-19, OTT and video streaming saw a surge like never before. This rise was attributed to a number of factors: the amount of time people spent at home, fewer avenues of entertainment, reliance on digital media for day-to-day interactions like business meetings, doctor consultations, online classes, and more. Video platforms also became a necessary means to fill the gap of human connections in people’s lives. According to a survey done by Limelight, in July 2020 over 89% of respondents used video to communicate, and over 50% used it daily.

Last year, video conferencing became one of the most critical tools for all kinds of businesses including Edtech, Retail, Healthcare, BFSI, etc. A cloud communications service provider based in the US saw an increase of 843% in the video minutes consumed by its users across domains, out of which Telehealth usage grew the most. The financial services and education sector also saw a significant spike in usage.

In our earlier article, we explored how the new-age LMS platforms are leveraging video streaming and creating innovative solutions across all their offerings – employee onboarding, partner training, customer education, employee training, and more.

‘’As enterprises continue to adopt technologies for remote learning and collaboration for employees, technology companies are amending their features and support. In the years to come, effective use of Machine Learning and Artificial Intelligence, VR, adaptive learning approaches, gamification will increase in LMS.’’ Srinidhi Rao, Senior Vice President – Solutioning and Account Management, Robosoft Technologies

In another article, we outlined how the Retail industry is using video for customer acquisition, retention and engagement.

‘’Out of sight, out of mind,  is more pertinent than ever before.  Hence it is essential for retailers to use innovative approaches to remain on consumers’ radar. Videos play a crucial role in this as it’s a more visually engaging medium.’’ Jay Shah, Vice President, Pre-sales & Solutioning, Robosoft Technologies

OTT and video streaming have become a force to be reckoned with in an age when all the rules of engaging and communicating with customers have changed. In this article, we will outline how video streaming is being used in 5 key industries: Healthcare, FinTech, B2B SaaS, Real Estate, and Manufacturing.

Healthcare: Medical streaming becomes a powerful channel for medical professionals

Medical streaming in healthcare is a phrase that has a broad range of use cases. Starting from providing consultations to patients in remote places to supervising surgeries, live medical video streaming has seeped into every crevice of medical aid to simplify doctor-patient relationships. In response to the COVID-19, the Spanish health authorities implemented Telehealth services at the primary care level. In addition, some private health providers offered video consultations for the general public free of charge. For Vonage, a cloud communications service provider, overall video minutes used by its healthcare clients spiked by 727 percent from February to March last year. The major use cases where video conferencing was used were: telehealth apps providing remote consultations, therapy sessions, online staff training etc.

Even prior to the pandemic, usage of video in healthcare was already picking pace for video consultations, training, and more. Below are some key use cases of how the healthcare sector leverages video streaming:

Telemedicine: Telemedicine is a stream coined to make medical assistance reachable to a vaster population. Medical live streaming, though primarily used to provide consultations, has also been used to share knowledge, research, and equipment demos.

Remote Medical Scribes: Documenting medical records to keep track of patient history and other key details is important but also time-consuming if done by physicians manually. Thus, the medical community created scribes – a virtual medium where doctors outsource these clerical jobs to people offshore. Live streaming these details has cut down a great deal of time and increased work efficiency in hospitals. Apps like SmartMD helps physicians record their visits. While the app scribes notes directly into the patient’s chart, saving everyone time and getting the most out of your EHR.

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Virtual Training: Medicine is an ever-evolving field that needs its professionals to keep up with the catching technologies and other advances. Even practicing doctors are often in need of requiring brief training. Live streaming can help the medical community updated through e-learning options.

Surgeries: Surgeries that do not consist of a senior doctor in the place have been monitored through live video streaming and hold an interactive session to eliminate surgical risks. In some cases, surgeries have also been broadcasted to a larger audience as lessons to educate those who are in training.

Online Consultation: Live streaming consultations have given the patients a wider choice of good doctors, not only for treatments but also for attaining opinions on diagnosed problems. These online live streaming consultations in healthcare can be used to review prescribed medicines, treatments, and other medical records such as scans and X-rays. This feature has vastly enhanced the experience of medical assistance and has also cut down on patient wait time as they do not go to meet doctors in real-time.

Last year owing to the pandemic, many hospitals and health systems launched and expanded telehealth programs in a matter of days. In response to the quick demand in access, HHS healthcare began leveraging platforms such as FaceTime and Zoom for virtual visits covering a wide range of conditions, from urgent care, primary care check-ups, medication follow up and COVID-19 screenings. Owing to the increased usage of video streaming services healthcare providers like Aetna Healthcare, UnitedHealthcare, Humana also starting including telehealth in their reimbursements.

Fintech and BFSI: Video-based content to acquire, engage and retain customers

BFSI and FinTech sectors can leverage the power of video streaming to not just engage with customers but also help them use their products and services with ease. According to a report from Accenture, 48% of US millennials would like their banks to offer video banking.

Here’s how the video streaming is being leveraged in this sector:

Video Banking: As physical branches become less relevant banks are upgrading their digital channels and introducing innovative methods to communicate and connect with their customers. Video Banking is one such innovation, which helps bridge the human-interface gap. For instance, LiveBank offers Virtual Branch Banking for the banking sector. It is an omnichannel communication and collaboration hub for banks that aggregate all communication channels like text chat, video, and audio. LiveBank provides retail banks secure and friendly contact channels for its clients.

Reducing the processing time: the BFSI sector is using video streaming to simplify the paper-based processing of loans, accounts, etc. Ping An, a wealth management company based in China reduced the loan application time to 6 minutes with the face recognition feature of Live Bank. At Robosoft, we partnered with a leading insurance company for the integration of Robosoft’s Video Chat solution to support online claim surveys for motor insurance. The integration of Video Chat solutions helped to personalize the digital interactions between the claim managers and customers and eased the claims process.

Making BFSI more inclusive: SignVideo, a British Sign Language (BSL) video interpreting service, was used by Lloyds to make their customer service more inclusive by making video an integral element of their customer services operations. Similarly, Santander UK and HSBC also use SignVideo to make their services more inclusive.

Better customer service: In a survey done by Accenture, more than half of survey respondents expressed an appetite for a true omnichannel banking experience that would allow them to switch seamlessly between physical and digital channels. In a post-COVID world where physical interactions are limited, channel innovations such as video conferencing, virtual reality, and chatbots can bridge the gap of face-to-face interactions.

“Video banking shows customers that behind the bank, there is something. There are people that can actually help you. It’s not like talking to a machine, it’s like talking to a real person.” Grzegorz Młynarczyk, vice president of virtual banking services provider LiveBank. 

Video-based marketing: 85% of businesses use video as a marketing tool, and of those, 88% of marketers report getting a positive return on their investment. Furthermore, videos can be more engaging learning tools than other forms of content. Service and product offerings in the BFSI and FinTech sectors can be complicated. Videos enable businesses to distill complicated concepts into a short, digestible format and to tell a story that showcases even the most complex technology. Customers can visualize how a product or service can solve their challenges, even ones they may not have known they had.

An example of video simplifying a complex FinTech solution for its customers can be this video from Crypto Arbitrager, a Fintech enterprise that enables investors to make money on the difference in rates of cryptocurrencies: bitcoin and litecoin. The fintech solution video shows how Crypto Arbitrager allows you to profit from exchange rate differences.

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B2B SaaS: Embracing the power of video across the sales funnel

B2B marketers have found that video content is more effective than written content. 59% of senior executives said they’d rather watch a video than read an article. Videos can play an important role throughout the sales funnel leading to conversions.

‘’Video marketing, especially for SaaS companies, involves utilizing video through the funnel to attract, convert and delight customers” Ed Laczynski, CEO of Zype. 

Video isn’t just for marketing anymore; it can play an influential role in the sales process now. The introduction of sales video platforms like Vidyard’s GoVideo and Wistia’s Soapbox has made it easy for sales reps to integrate video from their very first approach email.

These videos can be of various types – product demos, customer training videos, personalized videos embedded in email marketing campaigns, etc. Some examples to take a note of are:

Product explainer videos: Finalsite is a B2B SaaS company with more than 20 products and each one has a product video lasting under 60 seconds. PrecisionLender does a great job of addressing the key product questions in short 90 seconds videos.

Personalized sales videos: The Angle, a B2B tech marketing company used Wistia’s Soapbox to create a personalized video to promote a blog post. The video can be easily shared by the sales team in their emails to engage with the prospect.

Customer testimonials videos: Slack, produced this fun, two-minute video to tell the story of how the company’s platform improved Sandwich Video’s productivity. The video answers the main questions of any good testimonial video addressing the key concerns of decision-makers like quantifying the impact the product has made, product features, and more.

Real Estate: Video-streaming changing the rules of real estate purchase

The buying process in the real estate industry has evolved and Real Estate companies are using new-age technologies to engage with buyers throughout the buying cycle. At Robosoft, we partnered with one of the leading real estate development companies of UAE to create a mobile platform that can help buyers keep a track of their property-related transactions and create an engaging experience throughout the journey of home buying to living. We also worked with a service realty solutions organization that helps manage real-estate for private individuals, landlords and investors. We partnered with the client to create an aggregator web solution for landlords and tenants, for their property management requirements. From looking for a property to managing transactions and legal documents – digital has become a critical element.

Videos can help real estate enterprises engage with their customers better. Various ways in which the Real Estate sector leverage videos are: Virtual tours of the property, provide agent profiles to gain buyer’s trust, educational videos helping buyers learn more about the complex concepts surrounding the housing market like subprime mortgages, depreciation, and foreclosure, etc.

Tools like  BeLive.tv can help real estate enterprises to take interested buyers or agents on a virtual or remote tour of the house. Another type of video that the real estate sector can use is creating 360 views like Google Street through imaging equipment like Matterport 3D equipment, which is an enhanced imaging software. This camera does a high-res scan of every room in the house and creates a virtual, immersive, 3D experience.

Manufacturing: Customer education to process training videos are simplifying the manufacturing landscape

According to a Video Benchmarking report by Vidyard, High Tech, Professional Services & Media, and Entertainment & Publishing are the top three industries for video production. Manufacturing also ranks high on the list at number eight.

The manufacturing industry is leveraging videos as a powerful tool to show their customers, and investors, how the processes inside their factories work. For example, Rocket International, a national distributor of packaging supplies and equipment, put together a video that showcases the machinery that can be added to a line to place a carry handle to packaging. Similarly EVS Metal – a leading provider of end-to-end metal fabrication and manufacturing services gives a factory tour video that allows their buyers to see the size, conditions, capabilities, and products and services available at EVS Metal.

Another important use case of videos in the manufacturing industry is Process Training. Process training is an integral part of the manufacturing industry and videos are ideal to demonstrate step-by-step instructions that are useful for teaching the operation of a tool, product, or procedures. These how-to-videos pertaining to manufacturing are a better alternative to reading bulky manuals on the process because they provide visual stimulants that are easy to remember.

For the employer, these process videos reduce the time and resources spent on training employees how to carry out a process, while decreasing the learning curve for employees.

The manufacturing industry is also using immersive videos with AR/VR technologies for process tours, training, ensuring safety, and more. For instance, At the UK’s Eggborough Power Station K, tech companies Arithmetica and Transmission TX partnered to create an immersive VR training experience for workers at the power station, which delivers coal-fired power and biomass conversion. The VR experience simulated a real-life hazardous environment, providing a 360-degree video experience via consumer-friendly and fully available Samsung Gear VR headsets.

Ford, which outfits its employees with VR experiences to simulate the construction of upcoming models in its plants, years before the cars start rolling out of the warehouse doors. The intent of this VR application is to encourage workers to create the tools and processes they need in order to create a safer production environment. The introduction of VR in the manufacturing process resulted in an injury reduction rate of 70 percent.

In conclusion:

OTT and video streaming market is growing, while the COVID-19 pandemic accelerated this pace, the adoption was already underway. Industries beyond media & entertainment are leveraging video streaming for higher engagement with their customers. Be it educating the customers, communicating with them, or engaging with them – videos have become a critical aspect of strengthening the customer experiences. Additionally, videos are also helping in employee training, communication within enterprises, and more.

At Robosoft, we have the width and depth of experience crafting OTT and video app solutions. Our solutions are anchored on multiexperience – an approach focused on customer journey – providing multi-sensory, multimodal, and seamless experiences. We have partnered with several brands in crafting OTT solutions that have captivated users and delivered business growth through a combination of cutting-edge product strategy, UI/UX, and engineering services.

Know more about our OTT and video app solutions here.