1.
There is no one-size-fits-all monetization strategy for a streaming media business. The best revenue model—whether AVOD, SVOD, TVOD, or any combination of the three—depends on your audience and content library.
When is AVOD Suitable?
AVOD makes sense if your content draws millions of viewers every month. An ad-funded model has relatively low customer acquisition costs, scales easily, and appeals to audiences who are less likely to pay for content.
With inflation squeezing household budgets, streaming services are increasingly turning to AVOD. But it’s not without challenges. AVOD success demands an effective strategy for maximizing revenue across ad avails, while maintaining audience engagement.
When is SVOD Suitable?
SVOD is a lucrative option if you have an audience that’s passionate about your content. A profitable subscription-based business doesn’t require an audience of millions. But you do need niche or premier content that people will subscribe to access.
SVOD provides a predictable, recurring revenue stream and can deliver the highest lifetime value per viewer. Data-driven approaches to audience acquisition, engagement, and retention are critical to growing a subscription-based offering.
When is TVOD Suitable?
Content
Audience
Business
2.
Many streaming services are moving beyond a single monetization strategy, combining two or more monetization approaches to increase and diversify revenue.
MIXING
MODEL =
MORE LEVERS
FOR GROWTH
A hybrid revenue model could prove to be your best option in a highly competitive streaming market, especially if you have a diverse viewership and a large video catalog. By mixing models, you have more levers to grow your audience and monetize content.
Here are just a few examples of how hybrid models can unlock more business.
Media and Fan Brands Succeed with Hybrid Revenue Models
AMC Networks maximizes monetization with a combination of subscription-based and ad-supported services available across multiple devices.
SVOD + AVOD
The WNBA drives revenue through a mix of single-game passes, a season-long subscription, and ads in video clips on the league’s web site.
SVOD + AVOD + TVOD
Craftsy offers hobbyists the option of accessing videos on a purchase-to-own basis or as part of a subscription that also includes livestreamed events.
SVOD + TVOD
Expert Voices
COLIN DIXON
FOUNDER AND CHIEF ANALYST, NSCREENMEDIA
3.
Selecting a monetization strategy isn’t a set-it-and-forget-it exercise. Technology advances, new channels emerge, and consumers’ willingness to pay for content rises and falls with the economy.
76%
As a result, the monetization strategy that works for you today might not be the best revenue-driver tomorrow. In fact, a recent survey found that more than 76% of media execs planned to revise their business model within the next year.
Having the flexibility to add new monetization approaches helps you protect and grow revenue as your business matures and the streaming market continues to evolve.
Consider the value of being able to monetize content in different ways in these common scenarios:
SCENARIO | WITH A VERSATILE MONETIZATION STRATEGY, YOU CAN... |
---|---|
You’re an SVOD service, but subscriber growth is starting to stall |
Win a wider audience with free ad-supported content, then upsell your subscription plan |
You’re an SVOD business that’s losing subscribers to FAST services |
Pilot a free or low cost ad-supported tier to retain customers who are cutting their streaming budgets |
You’re an AVOD service that’s built a sizable audience of repeat viewers |
Introduce a subscription offering to capture an additional revenue stream from loyal fans |
You want to expand beyond your home market |
Set up payment models that appeal to local consumers in different regions to encourage service uptake |
You have the opportunity to license some newly available tentpole content |
Offer the content on a pay-per-view basis or as part of a premium subscription to attract new viewers |
Expert Voices
WILL RICHMOND
EDITOR AND PUBLISHER, VIDEONUZE
Hybrid Services See Higher Retention Rates
4.
Understanding how changes in monetization impact overall business performance is critical to success. Any number of approaches may be possible, but are they profitable?
Imagine you’re an SVOD service that wants to increase streaming revenue. You decide to pull some content off your subscription offering and make it available in a free ad-supported tier.
To determine whether the strategy is paying off, you’ll need to answer questions like:
Optimizing your monetization strategy requires actionable insights from a meaningful and comprehensive set of audience, engagement, and advertising metrics. This will allow you to make the best, data-driven decisions to grow your business.
5.
Creating a sustainable and profitable streaming media business requires the flexibility to:
Without the right enabling technology, your business will be cut off from potentially lucrative revenue streams. And you’ll have a tough time responding to new business objectives or changes in viewing and spending behaviors.
That’s why your best bet is a streaming platform that supports all monetization models, including AVOD, SVOD, TVOD, or any combination of the three. Another must-have: Rich analytics to measure and fine tune business model changes.
With an adaptable streaming solution and the willingness to test different revenue approaches, you can achieve the optimal monetization strategy for your media business now and into the future.