If we’ve said this once, we’ve said it a million times: Over-the-top (OTT) revenue is how the content creators of the future are going to dominate the industry and make their mark.
OTT is changing viewing habits, giving viewers more control over when and where they tap into content, and also fundamentally shaking up the pricing structure for consuming video content. Forget channel bundles, satellite dishes, and the like — these are next-level offerings that rely on the digital nature of the new video content industry. What this means for content creators is really quite extraordinary: You have more control over how you build OTT revenue than ever before. What’s the latest? There are three big avenues for getting the money you need to create bigger, better, and more: AVOD, TVOD, and SVOD. But what is AVOD and those other acronyms, and how can it help you generate revenue?
AVOD, or Advertising Video On Demand, is the version that’s “free” — or at least it’s free in that you don’t put any money up front first, just your time. The only thing viewers are giving these platforms is their time. Regardless, your time is worth something, and that’s why AVOD works — the content creators or the platform is selling time (or eyeballs, depending on how you look at it). This culminates as ads, sponsored content, commercials, etc., throughout your “free” content.
Examples of AVOD: Facebook, YouTube, Instagram and other platforms that prompt you to create an account if you’re a regular viewer — although it’s not necessarily required since the content is free
For creators that have the sheer amount of content — whether syndicating or original — this is an excellent option. The key is finding the platform technology to create your own service. Subscription Video On Demand (or SVOD) is the elephant in the room here and for a good reason: Who doesn’t want to be a subscription service like Netflix? SVOD typically sets up a monthly or yearly subscription agreement and delivers content for a flat annual (or monthly) fee, and Netflix is the king of this model. SVOD means watching with no limits — anything that’s on the platform is game for a watch.
Examples of SVOD: Netflix, Hulu, Disney+, Prime video, and many more. These services charge a monthly subscription fee that let you watch what you want, when you want.
Transactional Video On Demand (or TVOD) is the exact opposite of AVOD. Instead of watching for free with a couple of ads interspersed, consumers pay up front for the content, and then usually experience ad-free content. As consumers skip more and more commercials, transactional video on demand has grown in popularity because a lot of people prefer the ad-free experience. Instead of paying up front, you pay for the content you consume.
Think about your last movie night where you wanted to watch a movie that you didn’t own — did you consider buying it for a couple of bucks? Speaking from personal experience, I ALWAYS shell out a few bucks for a movie that I want to watch, especially with my family, because it’s convenient.
Examples of TVOD: Think iTunes and some Prime Video content. This is most applicable for extended content like videos or sporting events, and it gets customer buy-in by offering an attractive price relative to the material.
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