The ultimate goal for any business is to increase the ROI (Return on Investment) and OTT businesses are no different. The investment in several areas such as building/upgrading your OTT platform, customer acquisition, marketing, and others is quite unavoidable. But the return must justify all the time, effort, and investment put into it. As per the research, small businesses consider 15% to 30% ROI to be efficient, while for the big businesses or to scale up your business, even a higher rate is required. It is the best practice to chalk out the strategies to increase your ROI in advance instead of struggling later.
To help you with this, we have listed the tips to improve ROI for your OTT platform.
So, let’s get started!
Monetization Models: What they are and how to improve them?
The ROI of your OTT business majorly depends on the monetization/subscription models. In order to optimize your ROI, you must adopt a range of subscription plans as well as strategies to make the best out of each of them.
Let’s have a look –
1. Ad-Supported Subscription Model
In a subscription-based monetization model, customers pay monthly, quarterly, yearly, or over any specific time interval. But do you know that you can leverage them even more by introducing ads? Yes, with an ad-supported subscription model, not only you can earn more revenue through sponsored pre-roll, mid-roll, and post-roll ads from various brands, but can gain more revenue from your subscribers as well.
Simply offer your customers ad-supported subscription plans at a lower price where ads will run on the content they view and this will help you –
- Retain more subscribers owing to the lower price of the subscription plans (the platform is lowering subscription prices as a way of sharing the revenue generated from Ads with its customers)
- Earn more from the sponsored advertisements
- Draw more subscribers due to the lower price compared to the standard subscription plans available in the market
- Upsell the ad-free subscription plans to more customers
These all together will help increase the revenue without investing anything extra.
2. PPV/TVOD Model
This model allows the customers to purchase content on a pay per view basis. This model is also known as the PPV model, where customers can buy or rent VOD content based on their requirements. As this model lets the customers pay for only what’s required and not anything additional, the demand for such subscription plans is quite high. To give you an estimation, the global market volume for the TVOD segment is expected to reach the US $13.538 billion by 2026, while the user penetration is set to reach 11.4% by 2026. Amazon’s Video Store to Sky Box Office – TVOD models are being widely adopted owing to their ease of usage, high ROI and flexibility offered to the customers. While TVOD models broadly imply to PPV models, there are more well-defined subcategories to it to fit the varying requirements of the customers such as –
- EST (Electronic Sell Through) – This model/plan allows the users to buy a certain piece of content along with unlimited watching facility. Example – Buying movies on iTunes.
- DTR (Download to Rent) – DTR refers to the plan/model where the users can take rent of a piece of content by paying a one-time fee and the content will be available for a limited time to watch. Example – Renting movies on Amazon Prime Videos
- PPV (Pay Per View) – Users can watch an event/show/other VOD content by paying a one-time fee.
There are a lot of benefits of this model and you can adopt many strategies to optimize your ROI out of it –
- Charge a one-time fee to sell your content and restrict the content access by the number of views or the number of hours
- Can have better control over the content and ensure they are not viewed multiple times by multiple viewers using the same account credentials
- Can set up differential pricing for different content pieces such as movies, shows, documentaries, and others
- Can create multiple PPV streaming plans for the same content. For instance, you can set up the price for a series at the US $5 with 2 views and 2 days validity and can also set up the price for the same content at US $8 with unlimited views and 10 days validity
- You can set up differential pricing for subscribers and non-subscribers that not only will help in gaining more subscribers who are interested to view more of your content at a lower price, but also allow you to earn revenue from the non-subscribers as well
- By setting up differential pricing for multi-part content such as series, shows and others, you can generate even more revenue from your existing content, without paying anything extra. For instance, you can set up lower pricing for the initial one or two episodes for some of your most popular content on a PPV basis and increase the pricing for the rest of the episodes
No doubt that the TVOD model opens new paths to optimize your ROI and by implementing its various subcategories, you can leverage it in the best possible way.
3. Private Subscription & PPV Bundles
Private subscription plans & PPV bundles give you the liberty to set up a different pricing for such plans and hide its visibility from your OTT platform. The purpose is – sharing such plans with only the specific customers who might be interested in such subscription/PPV plans containing their preferred content. Such plans/bundles can be created based on the customers’ likes, dislikes, preferences, demographics, language, ratings, and other factors and the pricing can vary for different private bundles and subscription plans. The perks of offering such plans to your customers –
- Higher retention rate as the customers are paying for what they want only
- More recurring revenue as such plans can draw a significant extent of earning besides your regular subscription plans
- You can make some of the private plans public based on their demand and earn even more revenue without any additional costs
- Can get competitive advantages by providing more preference-based/personalized content through private bundles at lower costs
It is clear that such strategic plans help you boost your ROI significantly.
While boosting ROI is one of the main targets of every other OTT platform, it’s not so easy to accomplish unless you adopt unique strategies or focus on the core monetization models to strategize them based on your content, audience demand, their purchase patterns and other factors. However, the above-mentioned pointers will help you in increasing your ROI as well as improving your customers’ experience.
To begin with, you will need a top-notch OTT platform that not only supports all these monetization models but also offers enough flexibility to customize them according to your requirements. Muvi, an all-in-one OTT platform provider, caters to all these by providing flexible monetization options along with other robust solutions like social media integration, scalable CDN, biometric authentication, email marketing and many more. To start your journey of a profitable streaming business take a 14-day free trial now (no credit card required)!
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