51% of French people turned to a video streaming service during the first French lockdown, according to a study organized by Kantar for Et Demain Notre ADN in January 2021.
And this is just an example! With Covid-19, we changed the way we live, as well as our streaming habits. Learn more about all the monetization mechanisms available on emerging video platforms!
The different types of video monetization
You have probably already seen these acronyms, all related to the online video industry: VOD, AVOD, SVOD and TVOD. What do these abbreviations mean? If you want to launch a streaming service and know how video monetization works, this article is made for you!
There are several monetization systems for your platforms. The first one is SVOD: Subscription Video On Demand. With SVOD, users can access content through a monthly or yearly subscription (usually). You can use Kinow streaming solution to create different subscription durations and give access to all or part of your catalog. You can also propose to offer a subscription to a friend, just as LaCinetek. The goal is to build a unique customer experience.
The second monetization model is TVOD: Transactional Video On Demand or pay-per-view. TVOD allows your customers to access content (movies, series, documentaries, etc.) online for a specific period of time (rental) or permanently (permanent purchase). This monetization method allows users to pay only for the content they are interested in. They can also benefit from product packs (with a bundle of several movies), all at a very attractive price. AFLAMIN is a great example if you would like to propose a rental service. The platform brings together Moroccan cinema and international auteur cinema, and its offer is adapted to everyone's needs: 48h rental or subscription for one, three or six months. Its strategy is therefore split between TVOD and SVOD.
Finally, AVOD (Advertising Video On Demand) is a streaming service financed by advertising. Thanks to this system, the viewer accesses content for free, after seeing the ads. It is therefore the advertiser who pays for the video distribution. Youtube and Dailymotion are the pioneers of this economic model: they collect the advertising revenues and then distribute them to the rights holders.
What are the benefits of OTT monetization?
In most cases, billing is a synonym for authentication. This is the first major benefit of your monetization strategy. Indeed, thanks to OTT applications' viewing statistics, you can keep a track of activity history for each user. In terms of marketing and content strategy, this will allow you to better understand the tastes and preferences of your audience, which will help you create more effective marketing campaigns, by increasing sales and engagement rates. Simultaneously, as you have a direct contact with your customers, you can inform them that new content has been shared (via push notifications or emails) in order to build loyalty.
Monetizing your content also allows you to generate revenue without intermediaries. There are two ways to do this: by charging subscribers or using advertisements. Over the last few years, we have seen a strong growth in OTT services revenues around the world. Consumers are now willing to pay for high-quality content and subscribe to not only one but several streaming offers. Thus, the question is: what is the right strategy for you?
The benefits associated with monetization also vary depending on your business model. With AVOD, as your content is free, you should be able to reach a larger audience. However, the user experience will be different, because of the ads. If you opt for SVOD, you can offer a daily/weekly/monthly/annual subscription and content will be consumable whenever the user wants. However, one important thing is to make sure that the catalog is continuously renewed. Finally, TVOD allows you to evaluate your content popularity through the rental or purchase frequency.
There are several ways to monetize your video streaming platform: SVOD, TVOD, AVOD, product packs or gifts. You can use one or several monetization mechanisms to maximize your ROI (Return On Investment), acquire new customers and retain your audience. Take advantage of the different offers to match your target's desires. If you are looking for the right monetization strategy for your video streaming site, do not hesitate to contact our Kinow experts!
- Kantar study organized for Et Demain Notre ADN, from January 15 to 20, 2021 - link to the study