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Enabling Experimentation with New OTT Video Monetization Strategies

Markus Hejdenberg

Head of Product Sales and Marketing

September 5, 2023


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OTT monetization has changed. Even the big players like Netflix and Disney can no longer rely solely on subscriptions to keep a healthy profit margin. Indeed, it is no surprise that the recent State of Streaming Spring 2023 Report showed “monetizing services in new ways” as one of the four top-ranked objectives among the participating video providers. However, the right approach varies greatly from business to business and depends on a wide variety of factors. How can video providers determine the best way forward while also continually adapting business models to ensure profitability and cater to viewer demand?


The current trends in OTT monetization strategy

We are already seeing new approaches to monetization emerging. Many previously pure SVOD providers have either moved, or are moving, to a hybrid SVOD/AVOD business model. At the same time, technological developments now make it possible to serve more engaging, personalized ads, increasing value for advertisers, and with that also revenue opportunities for video services.

However, the opportunities do not end there. As we highlighted in a recent blog post, the future of monetization will likely see video owners diversify their offerings to build a presence across multiple areas of viewers’ digital lives - from streaming entertainment to shopping, social experiences, fitness, gaming, and sports.


Video streaming business models need to adapt and experiment

It is clear that video providers need to be looking at a multitude of options to diversify and adapt their OTT business models. However, it is difficult to know which model will work for a particular service, so the only way to determine the right route for your business is through experimentation. That means being able to flexibly adapt different models as well as collecting and analyzing data to understand the impact the changes have on viewer engagement and stickiness.

It is also important to understand that an OTT monetization strategy can never be stagnant. The industry is changing fast, driven by multiple market forces, consumer behavior, innovation, and other business drivers. It is important to understand these and keep evolving over time to remain relevant, and of course profitable. 

A good user experience remains vital for video

While experimenting with monetization, it is important that video services can maintain a good and engaging user experience. This is crucial whatever the business model. The challenge for video providers lies in adapting the UX depending on the business model, without losing any of the design elements, functionality, or impairing the engagement.

Introducing an advertising tier to your service must be executed with careful consideration, particularly if you already have users who are paying for a premium, ad-free experience. One effective strategy could be to offer a more budget-friendly subscription plan that includes advertisements. By presenting this option during the cancellation process, you can potentially mitigate customer churn and retain users who might be leaving primarily due to cost concerns. This approach provides a balanced middle-ground, allowing you to continue generating revenue while offering a more affordable alternative for cost-sensitive users

Ultimately it is crucial that the experience remains natural for the end consumer when a new model is introduced, with a seamless way to navigate between different offerings so they can upgrade and downgrade without any difficulty. At the same time, it is important to make it clear exactly what assets are covered by subscription package to avoid consumer frustration in the experience.


Using SAAS to experiment with your business model

At this year’sIBC, we will demonstrate how video service providers can leverage SaaS solutions to experiment with different business models.

Our premium, no-code OTT platform, Accedo One, enables video business to experiment at every level, including the flexibility to switch vendors, models, configurations, and user flows. This is all plugged into an analytic layer to ensure they can continually learn and iterate, and all in just a few clicks.

This best-of-breed approach leverages Amazon CloudFront, AWS Compute Services, Brightcove cSSAI, and Cleeng CRM, to offer growing the services the best ROI thanks to the ability to easily and seamlessly adapt and experiment.

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