Meta description: Discover 5 key strategies for generating profits as an owner of OTT app. Explore the examples of successful monetization from industry giants like like Hulu, Disney +, and Netflix.
Top Monetization Models for Your OTT Platform
OTT applications have a profound impact on the entertainment industry, revolutionizing the way we consume content. The global OTT market is promised to reach a whopping $193.5 billion by 2026 making the development of OTT application a lucrative venue.
However, as an owner of OTT platform, you need to be aware of how to generate income and sustain your operations.
We consulted the OTT app development company Perfsol to share their industry insights on the top monetization models the best suitable for your OTT application. So how does OTT platform earn money? Here’s the answer.
Subscription-Based Model
This model involves charging viewers a monthly or annual fee to access your content library. It’s a standard approach for platforms with a rich, regularly updated collection of shows and movies. This model is about building a loyal viewer base and creating a stable revenue stream.
Hulu is a vivid example of OTT app generating profit from subscriptions. Hulu’s subscribers pay a monthly fee to access an extensive library of content – from current TV shows to original content,
Freemium
The freemium model strikes a balance between free and premium content. It provides basic content at no cost, while charging for premium features or additional content. This approach is excellent for attracting a wide audience and offers a pathway to convert free users into paying subscribers.
Disney + Hotstar adapts the hybrid monetization model, providing users with both free and subscription-based content. Viewers can reach certain content for free, but premium and exclusive content requires payment.
In-App Advertising
This model involves displaying ads to viewers, either during content streaming or as part of the app interface.This is a great method for users to access content without having to pay for it while allowing OTT app owners generate profits. In-app advertising is a particularly effective approach for platforms with a large user base.
YouTube and Roku Channel are some of the most popular OTT platforms offering their customers free content leaving up space for advertising. Ads can be skippable, or non-skippable, and appear as pre-roll ads, mid-roll ads, or post-roll ads.
Hybrid
A hybrid monetization strategy combines elements from various models to create a more flexible approach. This model caters to different audience segments and adapts to changing viewer preferences. It allows OTT platforms to experiment and tailor their offerings based on audience feedback and market trends.
The OTT giant Nerflix earns follows the subscription-based model as the principal model to earn money. Almost 90% of all its revenue comes from subscription and partnerships while remaining 10% fall for advertising.
Pay-Per-View
In the Pay-Per-View model, users pay for individual content pieces they wish to watch. It’s particularly effective for special events or exclusive content releases. This model offers flexibility for viewers who prefer not to commit to a subscription and allows platforms to capitalize on high-demand content.
In conclusion, there is no one-size-fits-all solution in OTT monetization. Choosing the right monetization model for your OTT platform depends on the nature of your content, your target audience, and the competitive landscape. Many platforms find success in experimenting with multiple models or evolving their strategy over time to align with changing viewer habits and market dynamics.