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Monetising Streaming

The multiple ways to make money in OTT and Streaming

Monetising video streaming is as much a tutorial in the industry’s obsession with acronyms and terminology as anything else.

For many businesses, streaming, or OTT (Over-the-Top) services, as exclusively internet-delivered viewing is often called, represents an opportunity to initiate a new digital revenue stream for valuable entertainment-based video.

But live streaming, linear, and all those fiddly acronyms like VOD, TVOD, PPV, SVOD, AVOD, BVOD, and EST are not only the labels that define streaming, they define its commercial approach to the market; how a service looks to pay for itself and generate revenue.

Before we explore the meaning of these acronyms, from a monetary perspective, it is also worth considering the value proposition with respect to it being a ‘live’, ‘linear’ or ‘on-demand’ video stream. A live event is usually referring to a ticketed one-off experience happening in real-time, e.g. a sports event or a music concert. This is distinct from linear channel which is a streamed version of a broadcast channel with a fixed time of day schedule that may contain real-time/live streams, e.g. a news channel, and/or pre-recorded video content – for instance, a channel offering soaps, drama or films etc.

So, now for those acronyms!

VOD or Video on Demand, the original foundation of so many of these acronyms, implies a pre-recorded library of content that consumers can access on demand – that is, at any time they want to watch it. Most OTT video channels or Cloud video channels are VOD or started out as VOD only (like Netflix and BBC iPlayer initially), but increasingly they also include the streaming of live events and linear broadcast streams.

The letter preceding the VOD acronym defines the commercial model.  

TVOD (Transactional Video-on-Demand) is generally used to apply to the rental of (a transaction for) a film or TV show/series in a library of entertainment content. Pay-Per-View (PPV) is exactly as it says, you pay for each video watched, and although somewhat interchangeable with TVOD is more often used with the concept of ticketing digital or virtual events (live or recorded).

SVOD is Subscription Video on Demand. The subscription is usually applied on a monthly (or annual) basis and usually (e.g. Netflix) allows you to watch as much of everything available as you want over the subscription period.

AVOD; Advertising Video on Demand, sometimes also called FVOD (Free VOD) usually describes a streaming service that provides free content for the consumer, where the streaming business derives its revenue from advertising in the form of pre-roll and mid-roll video ads during the video (e.g. ITV Hub or a brand entertainment channel like Redbull).

BVOD is a bit of an exception in that it doesn’t really define the commercial model, as it tends to refer to Business Video on Demand, though I have seen it used asBrand Video on Demand. In most cases its proposition is more for company or product promotion (maybe a car manufacturer), or perhaps a private video channel for employee training or other company activities.

And then there is EST: Electronic Sell Through. This is effectively the digital purchase of a video akin to buying the DVD, otherwise referred to as download-to-own or buy-and-keep in the industry - although in reality (and through legal small-print) it is usually a ‘lifetime’ subscription where the lifetime may have a limit e.g. 30years, or even the date on which you leave the service.

All this does not preclude offering one, more or all commercial models within any one service, for example an SVOD service that also offers some exceptional PPV live events, or a TVOD film exclusive that also displays advertising within the video streams.

It’s even possible to add sponsorship of content through banner ads and pre-roll video, and add additional commerce through referrals and in-app purchases - something our clients have successfully combined to really maximise streaming potential, and make money in a way that was never open to a traditional broadcast TV channel.