The buzzword of the day is undoubtedly “OTT,” a game-changer that is revolutionising the entertainment industry!

The OTT video platform services marketplace is projected to reach a staggering $1040 billion in revenue by 2027. While established players like Netflix and Amazon Prime dominate the market, traditional broadcasters such as Disney+, Alt Balaji, and Sony Liv have surprised everyone by joining the fast-paced race to capture the OTT platform market share.

In this article, we will delve into the essential insights on how OTT channels generate revenue and continue to thrive year after year.

OTT pricing strategies play a crucial role in the performance of your streaming business. It is crucial to choose a unique streaming model that aligns with your broadcasting goals.

Let’s explore popular video monetization platform models and understand how they contribute to shaping your OTT platform pricing.

• Subscription Video On Demand (SVOD)

The subscription video on demand model is the go-to video monetization strategy chosen by most media broadcasters. It involves charging subscribers a monthly, quarterly, or yearly fee, granting them unlimited access to a curated library of on-demand content, including movies, TV shows, albums, and live TV channels.

Key Benefits:

• Provides a straightforward pay plan that ensures long-term sustainability
• Subscriptions can cover costs multiple times over
• Viewers are aware of the OTT cost before committing to a monthly payment

• Advertising Video On Demand (AVOD)

AVOD, or Advertising Video On Demand, is another revenue-generating pricing model that offers a surefire return on investment. With this model, users pay for access to content that includes online advertisements. In today’s digital age, many viewers make purchases after being exposed to compelling ads during their streaming experience.

Key Benefits:

• Monetize your OTT app through ad partnerships
• Choose ad placements during video broadcasts with a self-hosted platform
• Earn revenue per second, effectively managing OTT platform costs

• Pay-Per-View (Transactional Video On Demand)

Transactional Video On Demand, commonly known as Pay-Per-View, allows individual access to specific content pieces after a payment process. Viewers can rent or purchase access to the content, adding value to your produced or owned content. We are OTT service providers in India

Key Benefits:

• Typically offers a rental period of 24 to 48 hours from the time of playback
• Platform owners can set their own parameters, such as 30-day content access
• Immediate monetization is more likely with fresh releases due to viewers’ curiosity

• Hybrid Monetization Models

In addition to the aforementioned models, hybrid monetization models that combine subscriptions and advertisements have gained popularity. These models offer benefits to both users and OTT broadcasters, ensuring a steady revenue stream.

Key Benefits:

• Multiple revenue streams without sacrificing potential earnings
• Flexible user payment options positively impact subscription rates
• High revenue support system by capitalising on the benefits of each monetization model

Now, let’s move on to the next segment: creating an effective OTT pricing model.

OTT Pricing Model Strategy

Creating an OTT pricing model is a critical step in developing your OTT platform. It requires careful planning and evaluation to determine the market’s perception of value. Consider the following factors when setting your OTT rates:

• Serve the Purpose of Content

The pricing model should align with the purpose of your curated content. The audience’s perception of value will influence their willingness to pay for your offerings.

• Delve Deeper into Operating Costs

Consider the operational costs involved in establishing and maintaining your platform. Factors such as development cycles, streaming software utilisation, third-party partnerships, and original content production will help determine your pricing strategy.

• Understand Your Audience’s Preferences

Understandyour audience’s preferences and their willingness to pay. The importance of your content and its perceived value will play a significant role in determining the sustainability of your OTT platform. Consider offering a range of pricing options, from supplementary platforms to all-inclusive specialised platforms, to cater to different user segments. We are OTT providers in India

• Leverage Brand Recognition

Consider the impact of brand recognition on user adoption. If you’re just starting out, building a large fan following may take time. However, being associated with a popular and trusted brand can significantly increase subscriber count and revenue.

• Cross-Collateralization

Decide whether your platform will solely rely on the competitive marketplace or if it can drive real-world sales as a promotional tool. You can combine different models, such as advertisements and partnerships, to manage platform expenses and offer low-cost subscriptions to your valuable customers.

When crafting your pricing strategy, it’s important to work within the context of your platform’s comparative worth. Let’s now explore some examples of video streaming services and their pricing strategies to gain further insights into how the OTT industry monetizes its offerings.

Real-Time Big Shot Examples: OTT Platforms

Netflix: Netflix has played a significant role in popularising OTT streaming. The platform offers three-tier subscription models (Basic, Standard, and Premium) with prices starting at $8.99 per month. Subscribers gain access to a vast library of shows, movies, and original content. Netflix’s success lies in providing limitless viewing options while maintaining a reasonable price point.

Disney+: Disney+ has entered the streaming service market with a competitive edge. With a subscription price of $6.99 per month, users gain unlimited access to a vast collection of videos in the platform’s library. Additionally, Disney+ offers bundle packages with Hulu and ESPN+ for just $12.99 per month, creating a significant revenue boost.

Hulu: Hulu adopts a hybrid pricing plan that allows users to choose from various add-ons and customization options. With a base subscription price starting at $5.99 per month, Hulu includes digital ads. Users can upgrade their plans to enjoy ad-free streaming, providing flexibility to cater to different user preferences.

In conclusion, When developing your OTT platform, carefully consider your pricing model and understand your target audience’s preferences. Whether it’s through subscription-based models, advertisements, pay-per-view, or hybrid approaches, finding the right balance between value and revenue generation is key to the success of your OTT venture.