Two recent headlines caught my attention. The first was, “OTT to Overtake Broadcast in Five Years,” which details a report from Level3 Communications finding that streaming media will bypass traditional and cable television before 2020. Over-the-top content is on the rise, and will soon take over the industry.
The second headline was a little less optimistic: “OTT’s Troubling Trend: Is Anyone Actually Making Money?” This points to one of the challenges with over-the-top content. Generating enough revenue can be difficult.
Of course, the article in question was looking at major industry players like Netflix. These businesses have to license and create top-tier content, which is extremely expensive. For smaller OTT providers, licensing fees and content creation costs likely won’t be as high.
However, the challenge remains.
The challenge: making over-the-top content profitable
This essay aims to help you maximize revenue from your over-the-top content. We’re going to look at five main methods here. These methods are content diversification, free content, marketing, the “content is king” maxim, and special offers.
Let’s take a look at each of these in turn and how they can be implemented in the context of OTT content.
Maximizing revenue through diversification
The first method we will discuss here is diversification. This is a broad term that refers to increasing the different types and combinations of content you have available, in order to attract new viewers using different monetization methods.
For example, you may wish to offer customers the option to purchase each show individually. This is known as Transactional Video-On-Demand (TVOD) or pay-per-view. This monetization method can be used for live streaming content as well. You could also apply a subscription model whereby viewers can purchase access to your entire content library in one go.
Or, you may choose to release some content for free and monetize via advertising. By diversifying the models you use to generate revenue, you get in front of larger audiences and increase your potential income.
Another diversification method is to release different types of content. You can use video-on-demand for individual pieces of content, but also use packages to bundle video content and sell them together.
These methods provide a wide variety of choices to your customers. While too many choices can cause problems, it usually is a good thing. Diversifying your assets gives you a more stable income stream and allows for better A/B testing to determine the best methods and content for you.
Attracting customers with free content
The second method we’ll discuss here is attracting more paid viewers with free content. Many of the best online marketers take this approach. They create extremely valuable content and give it away for free. However, they use this content to generate true fans, build a following or email list, and become more widely known.
This intermediate is called “gated” content. This blog post explains more about the difference between free, gated, and paid content.
Two great examples are the personal finance specialist Ramit Sethi and productivity guru Cal Newport. Or, look at any sports league like the NBA. They release all their top highlights for free on YouTube, SportsCenter, social media, and any other outlet they can. This entices more viewers to watch on TV or the NBA’s OTT video service, League Pass.
The critical factor when offering free content is to make it worthwhile. To convince people to pay for content they might not otherwise have considered, you will need to give them a gift. You’ll also need to tease the fact that your paid content is even better.
Marketing, marketing, marketing
The next key part of maximizing revenue from over-the-top content is simple: marketing. Too many businesses expect good content to speak for itself. It can, but only if people watch it. Effective marketing plays a key role in the success of any business.
For OTT content, there is a huge variety of marketing techniques that you can use. Here are a few that we recommend:
Your website or video access portal is key for OTT video. Make sure it looks good, is easy to use, and provides compelling features to users. Focus groups can be a great way to identify problem areas that need improvements. Invest in your website—after all, it’s your core asset.
In modern marketing, an email list is the holy grail. It’s much more valuable than social media followers. Start email lists for current and past subscribers, and contact them on a regular basis to provide information, promotions, and more.
Targeted advertising to reach your audience can be effective. However, this method is dependent on having a highly specific profile of your target audience. The more you can narrow down your people, the better.
Partnerships and sponsorships
Consider strategic partnerships with other OTT businesses, content creators, advertisers, or non-profit groups. You may be able to set up relationships that have a mutual benefit, allowing you to reach a broader audience. Co-branding and cause marketing both falls under this umbrella.
We mentioned this above, but it bears repeating. Creative, high-quality free content can be a great marketing tool. Consider blog posts, e-books, infographics, podcasts, videos, and more.
Is it easier to turn the general public into customers, or to turn customers into bigger customers? Turns out the latter is much more effective—about 20 times more effective. Identify existing customers and develop a strategy to make these people into greater buyers.
Content is king
In the world of marketing and promotions, you’ll often hear the phrase “content is king.” The idea is simple. You can have the best marketing plan in the world, but if your core product or service is crap, it’ll probably flop.
Therefore, one key element in generating revenue is simply making content that people want to watch. If you create compelling, beautiful, intense, moving, funny, or otherwise engaging over-the-top content, the audience will follow.
To use a chess analogy, the content may be king but the king can’t do everything. To win the game, you need a team effort. Other pieces—the queen, rooks, bishops, and pawns—make winning possible.
Similarly, generating revenue from OTT content is a complex process. Only when marketing, technology, sales, and content come together can the business model be successful. Never forget that content is king, though.
Sales, promotions, and special offers
Another great way to maximize revenue from OTT video content is with promotions and sales. This is a time-tested method of selling any product or service. If people believe they are getting a special deal, they are much more likely to buy. In fact, many businesses are more or less constantly running sales to generate more income and keep people coming back.
There’s plenty of debate about whether or not this approach is the best way, and the answer depends on your exact business model. However, there is no argument that promotions can’t be highly effective.
Consider offering promotional codes for a percentage discount or a specific dollar value. Promotions can also offer special deals such as extra months in a subscription or perks added on top of your purchase. The possibilities are nearly endless here; creativity goes a long way.
Consider giveaways as another method for creating a buzz. Giving away a free tablet or some other great prize can be a cheap way to bring a lot of new people to your website. However, be aware that this can be low-quality traffic. It’s best if you can make the giveaway targeted, with the item being desirable to your core group and not the general public.
Monetizing OTT video content is something we’ve discussed before in some detail. There are a variety of methods available, each with their own pros and cons. However, sometimes there isn’t a single best method. That’s why we highlighted diversification in this post.
Maximizing your revenue is a challenge. Most likely, you’ll be gathering data on the performance of your various offerings and channels, then modifying your business plan based on this data. With the tips in this article, you should have a good base to build upon.
Any questions? Let us know in the comments section! Thanks for reading, and good luck with your live streams.