OTT platforms are moving beyond single-revenue models like subscriptions or ads. The future lies in hybrid monetization, where multiple models such asAVOD, SVOD, and TVOD coexist to maximize revenue, cater to diverse audiences, and improve retention. Giants like YouTube, Netflix, and Prime Video have already adopted this strategy, proving its effectiveness Continue reading
OTT platforms are becoming more advanced in terms of their business models. What started as a simple fixed subscription-driven business is now integrating multiple monetization methods at different steps. That is what we call deploying a hybrid monetization strategy. Why are OTT giants looking towards incorporating more than one monetization support for their OTT services?
In this blog, we are going to discuss what hybrid monetization is and why it is being called the next big money-making streaming setup.
If you read through the various monetization models deployed by various OTT giants, you will find one thing common. Almost all of them earlier stuck to a simple strategy of taking customers’ money in one definitive way and providing a service. That service could have been on-demand, live, or even a combination of both.
Scheduled programming of the cable TV networks also worked on the same principle. However, in recent times, with the introduction of multi-device content consumption, OTT content library expansion, and the global audience outreach requirements by OTT providers, the traditional methods of monetization have become a little difficult to work with, especially when it comes to managing the financials.
Going global is the mantra of OTT service providers these days. And that is the prime reason why hybrid monetization is taking over traditional monetization methods. Let’s have a look at some of the traditional monetization models.
Watching a piece of content online or on TV comes at a cost, and the monetization model deployed by the service provider is nothing more than defining who bears the cost of that particular piece of content and how they bear it. Let’s take an example of a video that is being launched on the internet using Muvi One, a powerful OTT streaming solutions provider. Now, when the content creator selects the monetization, they will have multiple options to choose from.
The user can simply say, I will run ads on my video, and my video will be free for the users. This is called the AVOD model of monetization, in which the end user does not pay a penny for the video. Now, obviously, streaming a piece of content has costs attached to it. Profits are also to be considered.
So the content owners deploy an ad server and bill the advertiser to put their ads on the content streamed. In this way, the advertiser gets an audience, the service provider gets profits, and the end user gets to enjoy the content for free. This is why it is called the advertising video on demand model, as the advertiser actually pays for the streaming cost.
Can you think of a very popular service that deploys AVOD as its principal monetization strategy? Yes, it’s YouTube. Probably the biggest free-to-watch video service globally. Backed by Google, YouTube primarily earns from advertising, and for the end user, they can simply make an account and watch content immediately.
As the name suggests, it is a subscriber-only service strategy. Users pay a fixed monthly or yearly subscription fee and gain access to content for personal use. (Strictly personal and not commercial)
The SVOD model is great as it provides a fixed revenue to the service provider and is not variable like the AVOD model, which more or less depends on the type and quality of ads. For the end user, watching ads can be irritating, and SVOD services typically have no ads, providing a premium content streaming experience by default.
Netflix deploys the SVOD model globally. You pay a fixed monthly subscription fee to them and get to watch your favourite shows and movies ad-free.
TVOD is the 3rd most popular and, in fact, a very crucial monetization strategy of certain streaming providers. As the name suggests, it offers a single one-time access to content to the viewer. Popular with sports broadcasters and even in education, it gives freedom to the service provider to fix prices of each of their content and allow streaming on a one-time payment basis.
The movies section on YouTube is purely a TVOD model. Sitraare Zameen Par, an Indian superhit movie, decided to go completely TVOD and was released on YouTube on an on-time fee basis or TVOD basis. This trend of offering exclusive content on a pay-per-view basis is slowly growing. Google TV and Prime Video Store are other popular examples that are transaction-based.
So far, we know that monetization is primarily of 3 types as mentioned above. As competition grows and user expectations evolve, a single revenue model is often no longer sufficient. Viewers today want flexibility.
Some prefer free content with ads, others are ready to pay for premium ad-free experiences, while many fall somewhere in between. For OTT providers, this reality has fueled the rise of hybrid monetization. To increase profits and make the streaming business sustainable, the service providers now try to cater to audiences of all types. With effective marketing and the right product placement, deploying hybrid monetization is good for business.
In a wider view, it is even good for the customer as they now have the choice to decide what to watch and how to watch it. It makes prioritizing streaming subscription spending much easier than before and opens the door to more and more content.
The OTT industry has become very competitive. Today, it’s not just about 3-4 big players but also a large number of small regional service providers. When everyone is selling content, the best way to stand apart and gain more profits and visibility is to increase the number of ways in which the content is being sold.
In such a crowded market, hybrid monetization has gained traction because it offers platforms financial resilience, audience inclusivity, and growth opportunities. Here are a few ways in which choosing a hybrid monetization approach is good for business.
In times like this, creating a one-size-fits-all product is a bad business decision. Hence, relying on SVOD or AVOD alone can deprive you of revenue opportunities and make you vulnerable to market fluctuations. For instance, subscription fatigue is real. People do cancel subscriptions, and that is a straight loss of revenue if you have just one way to make money from your content.
By integrating SVOD, AVOD, TVOD, and freemium models, platforms create multiple revenue pipelines. This ensures stability even if one source underperforms. Your business becomes safer, and it also allows you to invest in acquiring rights to more and more content that further fuels content consumption.
Not everyone can or wishes to pay for a monthly subscription, but can watch content with ads at a lesser fee. Similarly, some audiences do not like ads and would pay significantly more for an ad-free experience. Lastly, some audiences fear long-term commitment and are happy to pay a small amount to watch something that they find appealing on your platform.
You can see what the problem is with traditional monetization. It makes it very difficult to cater to all audiences. Hybrid models allow platforms to cater to all these segments simultaneously, increasing inclusivity and reach. Needless to say, the more customers, the more revenue generated.
Hybrid models are not just multiple subscription options. They are in fact, a huge sales funnel built for customer acquisition. Let’s say there is a customer who watches freemium or ad-driven content. Hybrid models provide entry-level options (like freemium or ad-supported tiers) to onboard users at little or no cost.
Once engaged, these users often upgrade to premium tiers or make occasional purchases. This conversion funnel helps increase brand awareness and royalty.
In emerging economies, price sensitivity is usually higher. Free or low-cost ad-supported tiers can be a great start in such markets. In contrast, developed countries see higher uptake of premium subscriptions. A hybrid model can enable you to target both with multiple plans of content distribution.
Every piece of content is different. Each one has a specific audience reach, and based on that, a hybrid monetization strategy allows users to develop a more holistic monetization model that caters to everyone. For instance, live sports can be PPV. Original TV shows that renew every year can bring loyal regular subscribers, and for audiences who prefer ads, they can simply purchase an ad-driven subscription.
In this way, a single piece of content gets monetized in multiple ways.
Hybrid models often result in higher ARPU compared to single models. An ad-supported user might generate less revenue monthly, but when combined with upselling opportunities (occasional TVOD purchases, eventual subscription upgrades), their lifetime contribution grows significantly.
By now, you must have realized how hybrid monetization is crucial for the streaming business. The sooner you realise this, the better it will be for your OTT platform. To further back our claim, here are a few examples of how leading OTT giants are slowly moving towards a hybrid monetization approach.
Everyone knows that YouTube is free to watch, but do you know you can watch YouTube without ads now? Yes, YouTube has now a subscriber-only plan called YouTube Premium that lets users enjoy content without getting troubled by constant ad interruptions, making YouTube officially enter the SVOD setup.
The story does not end here. YouTube now has 1000s of movies on the platform that are available to watch on a PPV basis. So what started as a simple free-to-stream ad-driven video platform now offers multiple options to stream content and generates revenue from all of them.
YouTube in 2024 has earned a massive US$14.5 billion from its YouTube Premium subscription, gaining over 100 million subscribers.
Let’s talk about another OTT giant. Traditionally started as a pure subscription-based service, Netflix now deploys an ad-supported, cheaper subscription plan too in various countries. This has opened access to price-sensitive markets and to advertisers as well. Omdia projects Netflix to reach $46.2 billion in 2025, including $3.2 billion from advertising, topping YouTube’s projected $45.6 billion total.
A subscription to Amazon Prime Video no longer offers everything. Prime Video now has 3 different types of plans to access content.
Hybrid monetization is no longer optional. It is slowly becoming the industry standard and an essential factor in defining a platform’s revenue outcomes. With more and more audiences demanding flexibility and OTT service providers needing sustainable growth, hybrid monetization paves the way to achieve both. It gives access to more users based on their budgets and, at the same time, keeps the ARPU high.
Understanding hybrid monetization is one thing, but deploying it is entirely different. From deploying ad servers to monitoring content access based on subscriptions, opting can be a tedious task, and this is just the beginning.
Thankfully, we have a software solution that can manage all of your hybrid monetization deployments with ease and so that you spend more time devising strategy while Muvi takes care of its deployment.
Muvi One is a fully customizable OTT streaming software solution provider that lets you securely manage and deploy content across the globe on multiple apps and ecosystems. From smart TVs to mobile devices, Muvi One lets you manage content on apps and ecosystems of your choice.
Muvi One is an end-to-end OTT Service provider that allows you to launch white-label multi-device OTT streaming & video streaming platforms, offering monetization, CDN, DRM, and much more without the need to write a single line of code.
Muvi One is not just a software to launch OTT services but an all-you-need solution to manage how you are going to earn from your content. Muvi supports the addition of advertisers to your content and even allows secure subscription models from the same platform.
All of this can be managed from a single, easy-to-use backend CMS. With Muvi One’s effective monetization deployed, a single piece of content can be pushed as AVOD, SVOD, or TVOD and even as a combination of all three.
The story does not end here. Here is a list of monetization features that Muvi One supports.
The list of services is endless. Muvi offers a free 14-day trial to all its products, including Muvi One. Try today!
Hybrid monetization is here to stay, and platforms like Muvi help you exercise better control over your content. If you are planning to launch or scale your OTT service, hybrid monetization should be at the core of your strategy. Muvi One is your ideal partner to make it happen.
Get a free 14-day trial to Muvi One today!
Hybrid monetization is nothing but opening your platform to earn from content in more than one way. Take the example of Prime Video. It sells a monthly ad-free subscription and, monthly ad-enabled subscription. On top of that, some of the titles are available on a PPV basis only. So hybrid monetization is combining the three major monetization models, namely AVOD, SVOD, and TVOD into what works best for business.
In simple terms, hybrid monetization offers revenue diversification, audience inclusivity, better customer retention, flexibility across markets, and higher average revenue per user (ARPU).
Yes. Hybrid monetization is not just for global giants. Even regional OTT services can benefit by offering ad-supported free content, affordable subscriptions, or pay-per-view options, depending on their audience. Muvi One can help you build a hybrid monetization-driven OTT platform for your content.
Written by: Shivashish
Shivashish works as a content writer at Muvi. He has worked in domains like e-commerce, employee engagement, sports and entertainment. A poet by heart, Shivashish believes in creating quality content that is rich in information and easy to understand.
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