What is Monetisation?

Different types of monetisation methods

There are several different methods of Monetisation methods that exist. The methods applied by businesses may vary depending on the context and nature of the asset or service being monetiszed. Across industries, common monetisation methods include the following:

Pay-Per-View (PPV): Popularized by the live sport broadcasting sector, PPV is a system by which viewers are required to make a one-time payment or purchase a digital ticket to gain access to their desired content.

Advertising: This method involves displaying advertisements on a platform, website, or app and earning revenue based on the number of impressions or clicks generated by users. An example of this is YouTube, which generates revenue via advertising within videos.

Subscription models: With this approach, users pay a recurring fee to access premium content, services, or features. Examples include streaming platforms like Netflix or subscription-based software services such as Adobe Photoshop.

E-commerce: Monetising through e-commerce involves selling products or services online and generating revenue through transactions. This can be done through a dedicated online store or by integrating e-commerce functionality, such as in-app purchases into an existing platform.

Monetisation strategies in the OTT industry

Driven by digital products such as video and online content, businesses operating in the OTT sector tend to combine the same mix of strategies to effectively monetise streamed content. A list of common monetisation methods used in this sector can be seen below:

Subscription Video on Demand (SVOD)

SVOD allows users on streaming apps to sign-up and pay a recurring monthly or annual fee to access video content. OTT platforms such as Netflix, Apple TV+ and Disney + are popular examples of brands that have capitalised on SVOD.  

Advertising Video on Demand (AVOD)

AVOD generates revenue through advertisements published throughout the streaming platform. Typically, these adverts tend to be displayed in the form of display banners across the app or placed within the content itself as pre and mid roll ads.

‍Transactional Video on Demand (TVOD)

TVOD allows viewers to rent or purchase digital content such as movies, TV shows or other video content on a per-title basis. Typically, this can be broken down into three methods. Electronic Sell Through (EST) which grants viewers unlimited digital access to their chosen title. Download to Rent (DTR) which allows users access for a limited time only. Or Pay Per View (PPV) which grants viewers limited access to live content at a pre-defined time and date. A prime example of TVOD in practice are live UFC matches, as these tend to require a one-time PPV purchase to access, yet this access expires once the event has come to an end.

‍Hybrid Video on Demand (HVOD)

HVOD refers to a mix of either of the above methods, as revenue is generated through a combination of subscription fees, advertisements, or in-app transactions such as PPV or merchandise. In other words, HVOD is the ultimate way for businesses operating in the OTT sector to diversify their revenue streams.  

Broadcast Video on Demand (BVOD)

BVOD refers to traditional TV broadcasters (such as BBC) making their aired content available via on-demand digital streaming services. BBC iPlayer and ITVx are notable examples of this. However, BVOD is not a monetisation method. Instead, BVOD enables the possibility for additional revenue streams to be created via methods such as advertising. For example, traditional broadcasters who have enabled BVOD could generate revenue through on-demand content via ad placements or place VOD content behind a subscription paywall as a means of generating revenue.  

Syndication

Syndication is the re-distribution of content across a variety of platforms, usually referred to as content or broadcast syndication. This allows media owners to expand the earning potential of their content as revenue could be generated via a plethora of different sources. A prime example of this is ESPN re-uploading live sports coverage onto a dedicated YouTube channel that runs pre-roll ads on each video.

Gamification

Gamification is the addition of game mechanics to platforms and content that aren't already games. These mechanics can be applied to websites, apps, learning management systems, and even company intranet systems. Examples in the OTT space include platforms such as Twitch, where viewers can interact with a community while watching a streamer. A notable example of gamification is Spotify's "wrapped" feature where users get a summary of their listening behaviour annually, and they can share this information with game-style stats and infographics on social media networks.