In VOD Professional’s recent panel, Applicaster’s president Jonathan Loar joined three other OTT pros for a dynamic conversation around pay model innovations—which models are out there, how are they changing, and what’s next?
OTT Question Time #65 - Innovations in OTT Pay Models, moderated by VOD Professional’s Kauser Kanji, gathered Jonathan, Lottie Towler (research manager at Ampere Analysis), and Scott Kewlet (VP of commercial product management at Synamedia) to share important knowledge and insights that every OTT professional should know. The session is well worth watching in full, so we’ve outlined just three compelling Q&As from the video.
Short answer: a lot. There are plenty of ways that streaming businesses can monetize their services. While this session focused on the most established models, there are still more to explore. These are the most popular:
When you know that these pay models can be bundled with others, the possibilities just keep growing. While this may seem overwhelming, it’s good news for the industry as the ways to generate revenue are vast and can be adjusted to suit a company’s needs and audience.
It comes down to necessity—what will serve both KPIs and content? As Jonathan points out in the video, the industry started measuring success exclusively by profitability and then shifted to include subscriber growth metrics. That changed again when the market got more competitive and businesses started looking for new tactics to show movement, like expanding their pay model offerings to meet subscriber demand (see Netflix and Disney+ launching AVOD).
Successful streaming businesses are always looking for new ways to monetize, and sometimes the pay models they choose can also depend on the type of content provided. For example, an AVOD model could incorporate product placement and brand sponsorships into their content. Understanding success metrics and content possibilities will help businesses make the right decisions about which pay models to explore.
One of the most compelling discussions is when all four OTT experts consider potential new pay models. (We’re especially partial to Kauser’s colorful new pay model acronym.) Among the ideas suggested were letting viewers pay to remove ads from specific, binge-worthy shows; allowing the audience to choose their advertisers; and branching into more creative geofencing opportunities. Any and all of these could become a reality for streaming businesses, but there are roadblocks.
Jonathan dove into the first idea structured around binge watching, explaining that the biggest factor that could get in the way is technology, namely the limitations (and fees) associated with in-app purchases. Successfully executing new pay models like this would rely on a seamless user experience, which would include easy purchasing directly from the app. Many companies are hesitant to go this route if the tech is clunky or the charges are too high.
With that said, innovations are always on the horizon and we’re looking forward to helping our customers do what’s best for their business.
Interested in learning more about OTT pay and business models? Watch the full OTT Question Time video or check out our recent report: The OTT Business Models Breakdown.