Continuing our OTT platform series, the next featured component of the NeuLion Digital Platform is arguably the most important—monetization. However, if you are still vacillating on what is the best primary business model to generate sustainable revenues for your service, you may want to read our recent post ‘Choosing the Right OTT Model’. The focus here is to familiarize you with the full range of monetization strategies to augment your service and diversify revenue streams.
A distinct advantage of delivering content direct-to-consumer or ‘over-the-top’ is the flexibility to incorporate multiple, concurrent monetization models to mitigate risk, unlock additional revenue and ultimately ensure profitability and growth. These include: subscription, advertising, pay-per-view, authenticated and transactional.
Deciding which monetization approach to incorporate should be predicated on content strategy, a thorough understanding of your audience, available rights and market research. Whether you are a startup or global power brand, it is important to continually analyze end-user consumption data and refine your monetization strategy accordingly. As a proven market leader with a deep client knowledge base and an understanding of evolving market trends, NeuLion can help you navigate this process.
The NeuLion Digital Platform is architected on a common platform that supports multiple business models.
SUBSCRIPTION: Manage multiple subscription packages, pricing, content bundling, payment processing and multi-currency support within localized UX storefronts
PAY-PER-VIEW: Deliver live experiences to your viewers with a digital ticket. You create the price point and NeuLion handles the rest from registration and payment processing to delivery on all supported devices (e.g. Web, mobile, Smart TVs, connected-TV, gaming consoles)
AUTHENTICATED: Manage content rights and distribution agreements with end-user authentication, enabling logins and entitlements based on an end-user’s location, group, device type or through an external subscriber database
AD-SUPPORTED: Power live and on-demand advertising, including pre-roll ads and dynamically inserted mid-roll (server side and/or client side) based on user tags such as geo-location, device usage or content preference
TRANSACTIONAL: Enable transactional VOD (rental) to create new revenue streams for your content library
The majority of successful OTT services are subscription-only, in fact there are over 200+ such services currently in the market. But services such as Sony’s Crackle and Tubi TV are proving that an ad-supported-only (AVOD) model is also sustainable.
Services that combine subscription and pay-per-view provide a win-win for both the consumer and the service provider, delivering deep content libraries and live events. YouTube is a prime example of a paid and ad-supported service that enjoys monthly recurring subscription fees and ad-revenue (via YouTube and YouTube Premium). In some cases, the preference is for a hybrid approach that utilizes three concurrent monetization models (subscription, authenticated and ad-supported). Clearly, there is no single path to build and grow an OTT service. However, consumers’ appetite to pay for multiple subscription services will be tested in the next few years. By adopting a multi-monetization model approach, OTT services can hedge risk and entice viewers with a variety of access options.
Having a flexible monetization suite at your disposal enables the market agility to pivot or bolt-on new revenue models as needed. The NeuLion Digital Platform not only provides this flexibility but also manages secure, end-user billing and PCI compliant global payment processing.
Stand by for our next post of the series, Deliver!