OTT Apps and 5 Forms of Video Monetization | Hacker Noon


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Table of Contents

  1. Introduction 
  2. What is OTT?
  3. Why should you have your own OTT app?
  4. How does Video Monetization happen on OTT platforms?
  5. When to get your own OTT?
  6. OTT Checklist- Things to consider before launching your own OTT platform
  7. Conclusion

By the end of 2023, it is estimated that there will be 4.3 billion smartphone users in the world. These are smartphones that carry basic features such as a camera, video recording and wifi connectivity apart from calling and messaging. That means 50% of the world has the potential to create digital content at any given time. There’s an abundance of content and content creators today but very few creators have successfully monetized their content business. 

However, video monetization could be a daunting task. You have to know the quality of your content, your audience & their purchasing power and offer more lucrative deals than the competition. For those making such content and revenue decisions there are 4 available options on an OTT that one can go for, to gain monetary benefits. But what does OTT exactly mean? How do you make money off OTT? When should you start your own OTT? Why should you start it? Let’s understand in detail.

What is OTT?

OTT stands for, Over the Top, it is defined as any kind of content delivered over the internet, without requiring the users to subscribe to a wired cable, or satellite TV service. It includes various popular streaming services like Netflix, Disney+, Hulu, Roku.

OTT apps as we know have been around the block for a long time. They have been creating massive buzz, especially since 2008 when viewers started to ditch the cable. This trend has continued since. A recent report estimates, in the next three years, the number of U.S. households that still use Cable TV subscriptions, will decline from 86.5 million to 72.7 million! Continuing the buzz of the OTT over time, as of date, 64% of internet users which is roughly 182 million users in the US have at least one OTT subscription. Netflix alone has 152 million subscriptions!

Seeing all the growth this sector has been making, it won’t be an overstatement to say that OTT seems to be on the way to becoming the new mainstream TV. 

Why should you have your own OTT app? 

OTT services have changed the way we consume content. The consumers are loving the a la carte way of consuming content at highly competitive prices. 

Nowadays, It has become easier to create an OTT platform because of some low code SaaS tools.  But what are the business owners getting? Why should they invest in starting their own OTT app?

Let’s look at the benefits of OTT and launching it for your own business:

Direct to Consumer

Don’t we sometimes just stumble upon some of the content on our Netflix homepage, without actually having to even search for it, or reading the reviews for it?

It has all become possible because of the seamless technology of the OTT apps which can keep a record of each user’s streaming via their accounts and suggest more relevant content as per that.

Launching your own OTT app will enable you to understand the taste and preference of your audience better which would help in creating better and more relevant content for them resulting in increased views and engagement time. As you have direct reach to your consumer, you can also notify them about the new content/merchandise via push notifications or emails.

Consumer Reach

OTT is very rapidly becoming mainstream, which foresees an exponential increase in audience size as this sector heads towards global expansion.

As per a recent study, OTT services are predicted to reach 650 million subscribers by 2022! By launching your own OTT screen, you can tap into the immensely growing market of consumers looking for more OTT services and ultimately increase your consumer reach in multi-folds

Video Monetization

There has been a rapid growth of OTT revenue since the Cord-cutting boom in 2008. Consumers are now more than willing to pay for good content and to subscribe, not to one but multiple OTT screens.

As per reports, In 2019, consumers spent a whopping $39 billion on OTT app subscriptions.

You can also monetize your content in many ways, by charging the subscribers, ads, or even selling merchandise. Not only that, Starting an OTT business gives you complete freedom over your pricing strategies, leading to consistency in income. Now by looking at all the numbers and facts, we can say that there is no better time than now to start monetizing your content and maximizing your revenues.

How does Video Monetization happen on OTT platforms?

Massive numbers of viewers are transitioning to OTT. According to a report by Statista, OTT media revenue is expected to cross US$ 167 billion by 2025. That’s double of what it was at the end of 2019! With so many OTT businesses flourishing in the world today, we can be certain that no one model fits all. There are several unique ways each one of them earns revenue. 

There are a few terms that are thrown around when it comes to OTT — AVOD/PVOD/SOD/TVOD and HVOD. We explain each of them along with how one can utilise them.

1. AVOD — Advertising Video on Demand

What is it: Using advertising to monetize your content which is otherwise free to view. Depending on the length of your video content, you can add an ad to your video pre-roll (before your video plays), mid-roll (during the video), and post (at the end of the video). You can also determine if you want to keep your ads skippable or not.

When can it work: When the ads are not too long, and not too intrusive. Keep a good balance of content time versus ad time.

Advantages: Since your content is free to view, you should be able to get a higher number of viewers. You can either get one brand to sponsor the whole video, or have different brands for different segments.

Disadvantages: The user-experience is compromised. An ad at the start of a video could end up making the viewer exit your video before it starts.

Example: The ads that play within the videos one watches on the likes of YouTube, Facebook etc.

2. PVOD — Premium Video on Demand

What is it: Through Premium Video on Demand (PVOD) you can charge viewers to allow them to access content before it’s aired elsewhere.

When can it work: Once your OTT platform has attracted several viewers with wide enough engagement, this could be extremely beneficial. You can encourage fans to discuss this on social media. Once a person has seen the content posts about it, the others could face the fear of missing out and immediately log on to the platform to watch the content.

Advantages: It’s a win for those kinds of users who just cannot wait to watch a piece of content. You can demand a price higher for your content too, thus making it a win-win.

Disadvantages: Your content needs to be extremely engaging and premium to fall into this category. This only works well for certain genres of content — a new movie release, a certain sporting event.

Example: Disney+ charged users (even those who had a subscription pack) to watch Mulan on the first day of the release. Users who opted not to pay for it, had to wait their turn to watch it.

3. SVOD — Subscription Video on Demand

What is it: This is a model where you charge users a recurring fee to access your content.

When can it work: This is one common model OTT players use. One should use this model if content is being released frequently. It is primarily the right choice for businesses focusing on content with long-term value.

Advantages: One can play around with this by offering different subscription models — daily, weekly, monthly, yearly. A tip here — make your yearly subscription price much lower than what a user would pay on a monthly basis for a year. Here, the OTT benefit also comes in where one can subscribe and pay for content and then consume it whenever they wish to.

Disadvantages: Content-library needs to be addressed frequently, else, one could see users opt out of the platform and not renew their subscription. Also, subscribers could end up sharing ids with friends and family which could hurt your revenues.

Example: This is most common with the likes of Amazon Prime Video, Netflix, Disney+ etc, all using different prices.

4. TVOD — Transactional Video on Demand

What is it: Charge viewers for accessing on-demand videos. These could be live streams or a PPV (pay-per-view) event which is accessible only for a limited period of time. You could charge users a fee to either download it permanently and watch, or give them access for a limited time.

When can it work: Use this for contextual content, one that a viewer would simply not be able to do without. If you’re looking to offer TVOD, you could sweeten the deal for your user by providing an ad-free experience.

Advantages: You’re not changing your other models of revenue. This is a one-off and can help you measure exact interest in a piece of content.

Disadvantages: Consumers could be skeptical about paying for one piece of content only.

Example: Google Movies, YouTube movies, iTunes etc.

5. HVOD — Hybrid Video on Demand

What is it: This is a mixture of using two or more of the above types of video monetization. Most global OTT platforms use this method. You can offer some pieces of content for free, and then get users to pay to access a certain piece of content from your library.

When can it work: If you’re looking to mix and match a free and paid service, you need to make sure each piece of content is very different. If you do have that in your content library, then this is the way to go.

Advantages: Your user numbers increase because of the free users, which helps in promoting your platform to advertisers. And if your content is engaging, the free users can take that step up and pay for content.

Disadvantages: Offering a free and paid subscription service could see consumers picking and sticking to the former.

Example: Hulu offers differentiated offerings at different prices to consumers. There is a lower subscription fee which includes ads in their service and a premium fee for an ad-free viewing experience.

When to get your own OTT app?

After the incredible surge in demand for OTT, this technology is widely available across to the masses. You too can start your own OTT app.

But before that, here’s a list of points you need to look at:

Start creating or leasing content to have a bank of high-quality videos that are ready to be uploaded, so that the audience has enough content to consume, once the app is up and running.

An OTT app can help you get the audience you have always been looking at. If you have an established YouTube channel is a plus, but if you are looking at users who trust and have faith in your content as they engage more it’s an OTT app and website you are looking for.

Millions of viewers are cutting the cord, there is a surge in the number of new OTT businesses coming up. In such a competitive scenario, having planned investment for a well-structured marketing strategy will never go wrong.

OTT Checklist – Things to consider before launching your own OTT

A Strong Brand Identity

The business should have a clear brand message and identity to establish a connection with the audience. Having a consistent theme to the content helps to attract the right audience. It’s the feeling of relatability that makes the audience want to interact and engage

Proven Engaging Content

As very famously and rightly said by Bill Gates,

“Content is always the king.”

We believe so too! Content is the most important factor which makes the OTT app successful and enables the audience to engage and subscribe.

Your business should have a proven strategy of content creation for which the audience is ready to pay for. The audience should feel that they are benefitted in any way from being able to stream the content.

Consistent Design and Branding

We associate a lot of brands just by seeing their color schemes, or logos. That’s because their marketing strategy deliberately creates consistent branding which leads to a strong recall value. Identifying and using the brand’s colors, design aspects, logos, consistently throughout all the devices helps to make the experience more seamless and also makes the OTT service to stand out and leave an impression on the audience.

Continued Content Creation

Having a bank of content and continued content creation strategy keeps the business smooth in the long run and helps the business grow seamlessly.

Pricing Strategy

An effective pricing strategy is essential when it comes to OTT apps and websites. In today’s increasingly competitive market, with one OTT-business offering cut-throat pricing than the other, it is inevitable to have a strategic and competitive pricing strategy in place. Well-planned pricing and the billing cycle of the payments should be devised in advance. It should make the customer feel that they are getting their money’s worth against the content provided. Which can eventually help in growing and sustaining the audience base


OTT apps are the future of how we consume content. It has grown rapidly over the last few years, And more billions are being invested as we speak. There is no sign of stopping anytime soon.

So, If you’re considering investing in OTT for your business, this is the time. It is a growing, challenging, and ever-changing service, as it adapts to the growing consumer patterns and demands but there is one certain thing, there is no turning back now! Get in touch with Enveu experts today!

by Enveu @enveu. Helping Video Service Providers redefine Video Experiences across platforms and devices with our Low Code SAAS PlatformGet Demo


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