Video monetization is skyrocketing growth for broadcasters and online brands. Research shows that overall video ads grew by 46% last year with live content doubling in market share. Not to mention that online viewership is up by 72% and consumer spending for streaming services is expected to reach nearly $17B in 2020.
Clearly, audiences are in love with streaming and over-the-top video solutions.
This presents a unique opportunity for organizations to monetize their video libraries and create stable streams of recurring income. From ad-supported content, viewer subscriptions, all the way up to pay-per-view and on-demand services, monetization is the new standard of profitable media delivery and consumption.
In today’s article, we will talk about what video monetization is and how it works. We will also discuss various video monetization models (AVOD, SVOD, and TVOD) and how they can be used with both live streaming and video on demand. Lastly, we will touch upon paywalls, discuss how OTT delivery fits into the picture, and review a few of the top video monetization platforms.
Let’s dive in and get started.
This post has been updated to reflect the most accurate information on video monetization as of November 2020.
Table of Contents
- What is video monetization?
- How do you monetize videos?
- Where can you monetize videos?
- What is a paywall?
- What is pay-per-view streaming?
- How can OTT and streaming complement pay-per-view
- Common video monetization models
- Popular video monetization platforms
What is Video Monetization?
Simply put – video monetization is getting paid for the videos you publish online. Not so much for the creation, but rather when audiences view or download your content. The more people that watch the greater your earnings.
But how does it all work?
Broadcasters can generate revenue from their videos in a number of different ways. The most common include inserting ads, incorporating sponsors, offering subscriptions, or creating product or service reviews.
Generating income from your videos is based on these distinct business models.
- Access to individual content – when you serve the needs of your audience well, followers will pay to view the content you create. Educational curriculum, training courses, and other digital downloads are prime examples.
- Access to your audience – advertisers with a product or service (that aligns with your brand) will sponsor ads or pay for placement within your video content. Think about promoting workout gear or supplements to a fitness audience or running team apparel ads during a live sports event.
- Access to your platform – as a broadcaster, creating a subscription model to access premium content – or your entire video-on-demand library – is a smart monetization play. This model works especially well for media agencies, online publishers, and others with vast content collections already established.
Some organizations may hesitate to charge fees or subscriptions for accessing premium content. Believing that such actions will be perceived negatively or turn away loyal visitors. However, if the information is valuable and compelling, viewers will gladly pay to benefit from it.
Especially if the content is entertaining, solves a problem, or helps viewers grow.
How Do You Monetize Videos?
One of the easiest ways to get started with video monetization is by inserting ads or using “suggested” content links in your published media. Anyone who has ever watched a YouTube video will recognize this concept. As viewers engage with these sponsored links you earn income for each click or a percentage of completed affiliate sales.
Broadcasters can also look for sponsors and include targeted product placement throughout their content. With sponsors, you need to have a decent following to charge premium rates. However, if you cater to a specific audience or niche, brands will still pay good money for advertising (even with a smaller following). The key is ensuring any sponsors align with your site values and audience interest.
Otherwise, sponsored ads may do more harm than good.
As previously mentioned, product review videos can also be a good source of income. Companies will pay you to share honest feedback about their products or services in order to get their name out. Site owners can also earn “freebies” as many brands let you keep the reviewed items or services afterward.
Furthermore – as long as your review is helpful and honest – it can bolster trust between you and your audience. Again, but only if the placement makes sense for both parties.
This all sounds good, but how do you find the infrastructure to support your efforts?
Create Your Own VOD Platform
A VOD delivery platform is a media distribution system that hosts and shares content online via associated CDNs (content delivery networks). Video streaming CDNs are pools of globally distributed servers that provide fast, reliable content delivery to businesses and online audiences. This content can come in the form of on-demand video files, images, text files, and much more. The top use case of a CDN is when a business is trying to distribute large files such as VOD content.
In other words, reserved internet property where visitors can gain direct access to your content. A website that is fast, easy to navigate, and where content can be delivered to almost any device. The strengths of having a platform are being able to set your own prices, maintain control of content distribution, and adjust your video marketing strategy based on user feedback and market demand.
Trying to build a VOD platform yourself is a lot of work. Fortunately, partnering with an existing online video platform makes the process easy. These ready-made solutions have the infrastructure, tools, and support to get you up and running fast. Many also include built-in monetization options and security controls to manage user access.
Add Monetization Options to Existing Content
If you have not already, consider adding a paywall to charge users for access to your video-on-demand library. Subscription models are an ideal way to get started with video monetization. Once you have the content created, you can keep adding to your library and building your brand.
As your following continues to grow, so do your earnings. Even a small (but dedicated) audience can generate substantial income.
Get Your Content in Front of More Eyes
When it comes to video monetization, the more people who see your content the better. One of the best ways to increase your reach is by partnering with an OTT provider with a proven video distribution network. OTT (over-the-top) technology allows viewers to access content on a wide range of equipment including computers, mobile devices, gaming consoles, and streaming boxes (Roku, Amazon Fire TV, etc.).
Rather than being limited to proprietary broadcast networks (like with cable or satellite), OTT utilizes the public internet for end-to-end transmission. So long as audiences have a connection and compatible device, they can stream OTT content, and the provider can monetize their over-the-top content.
Where Can You Monetize Videos?
When people talk about monetizing videos, YouTube typically comes to mind. With their tremendous size, reach, and industry history, it’s no wonder. Yet, for organizations that are serious about growth and scale of service, YouTube (and other common social media sites) are not the best option for monetizing video.
While it is true that sharing on these sites is one way to get exposure, you lose control of how your content is distributed. Your videos are drowned in ads that you have no control over and buried deep on a site that decides whose content is featured (and whose is not).
Members are also subjected to strict advertising guidelines and ever-changing revenue models. The fact is, you can actually end up losing viewers (and income) if your videos are tied to the wrong kind of advertising.
Even if everything falls into place – the right audience size, messaging, and exposure you can still come up short. Research shows that over 95% of YouTubers can’t make ends meet. Whatever money you do make, the platform keeps a whopping 45% of it.
Patronage crowdfunding sites like Patreon and Indiegogo also allow broadcasters to offer exclusive content to subscribers (for a fee). However, nothing beats using your own website for video hosting. Especially when it comes to security, maximizing profits, and scalability. Working with an established online video provider makes the process easy.
What is A Paywall?
If you want to charge subscribers for content, there has to be a method in place to restrict access. This is where paywalls come into play-acting as digital payment barriers to control the flow of videos.
Paywalls fit nicely with subscription models as viewers can have their own accounts for library access while broadcasters earn steady recurring income. Most brands using paywalls offer free access to some content but block others with popups or login prompts. This type of setup is known as a soft paywall.
Soft paywalls are a good way to start monetizing your content and align well with most streaming solutions. You can test how viewers will react to ads – without completely alienating your audience in the process.
Setups, where NO free content is offered, are called hard paywalls. Although hard paywalls can generate more revenue in the long run, you need a strong user base to make it work. Otherwise, casual visitors will look for free content elsewhere.
Hard paywalls may also limit the number of advertisers you can attract since you have a smaller audience to market to. The optimal paywall strategy is to use a combination of both. Offer free content for some users and paid subscriptions to others. Everyday videos can be shared with general audiences while premium content is reserved for members or those that opt to pay.
Paywalls are the heart of robust content monetization strategies and offer solid ROI when implemented correctly.
What is Pay-Per-View Streaming?
When organizations live stream an event – and audiences are willing to pay for access – it’s known as pay-per-view streaming. Common examples include the boxing or fight matches typically found on HBO. Or pay-per-view wrestling events streamed from a WWE website.
One of the most attractive features of PPV streaming is how lucrative it can be. If you own the exclusive rights to valuable content and have the tech in place to broadcast and share it with others, organizations can fetch top dollar for providing access.
This revenue model also removes the dependency of advertising quotas (although you can certainly still use them). Ads provide income but require a lot of clicks to generate decent money. Running random ads also tends to steal viewers’ attention – just think about how often you ignore them on YouTube.
Most audiences are willing to pay more for a better experience – PPV bridges that gap.
Implementing a one-time paywall is the easiest method to generate revenue from a pay-per-view streaming model. Unfortunately, some of the most common video platforms do not have the option of including paywalls for gated content. You need to have a specialized online video provider to take advantage of this feature.
It also helps to work with a vendor who handles payment processing in-house (vs. using external partners). Doing so makes the process simpler and further improves the customer experience.
How Can OTT and Streaming Complement Pay-Per-View?
If you want to reach a larger audience with your content (and you do) utilizing an OTT provider is an essential part of the process. Think about the mainstream events we mentioned earlier – boxing, live sports, concerts, etc. In the past, you would have needed access from your cable or tv provider to take part in such events.
But with over-the-top broadcasting, content is distributed via the public internet.
OTT removes the barriers of proprietary telecom networks and makes content available to mass audiences. If viewers want to see your pay-per-view event, they simply need an internet connection, a compatible device (computer, phone, smartTV, gaming console, etc.), and a means to submit payment.
Clear evidence that over-the-top mediums are how modern consumers want to access the content. OTT helps PPV broadcasters meet this demand right where viewers are.
Common Video Monetization Models
Although there are dozens of ways broadcasters can monetize video content, most efforts fall within one of three main categories: AVOD, SVOD, or TVOD. While all can be profitable, there are pros and cons to each. Depending on where you are in your business life cycle, the best option may change over time.
Advertising Video on Demand (AVOD) is a sponsorship model where the cost for ad placement is typically based on audience size. AVOD is a classic monetization format where brands pay you to run video advertisements in front of your audience. Once again, YouTube serves as a prime example.
As stated, the larger the audience, the more revenue AVOD video can generate. Advertising video on demand also provides a low barrier to entry as it is both easy to set up and operate. Additionally, most online viewers prefer ad-supported free content as this is what they are already accustomed to.
Subscription Video on Demand (SVOD) is a monetization option where users pay a recurring fee to access video content. Netflix is an obvious example of SVOD in action. As long as user accounts remain current, members can access Netflix’s vast library of video content whenever and wherever they choose.
Although the name includes video-on-demand, SVOD can also apply to live streaming content. Like for subscriptions to live sports packages or access to webinars from mentors or thought leaders. Subscription video on demand is one of the most profitable types of monetization as organizations can develop recurring revenue for as long as they see fit.
Transactional Video On Demand applies to pay-per-view streaming and other exchanges that do not occur on a recurring basis. Audiences pay upfront for each video watched or digital download requested. Basically, TVOD equates to pay as you go service.
Common examples include iTunes and the Google Play Store for individual downloads and pay-per-view events for live streaming. TVOD is the opposite of AVOD as viewers pay for each and every piece of content they access.
Although transactional video on demand seems more restrictive, it can actually be highly profitable. Especially for broadcasters covering a large array of topics or those with specialized experience in a specific niche.
Once again, selecting a video monetization model is not an all or nothing proposition. Many organizations have success mixing and matching based on existing resources and the needs of their audience. Frequently using AVOD for general information and subscription or transactional video on demand for premium content.
Popular Video Monetization Platforms
Now that you know about the benefits of video monetization the next step is choosing which provider to go with. Keep in mind that some online video platforms offer native tools for monetization while others include partial or no options at all. In which case you will need third party plugins or tools to complete transactions.
Broadcasters should also review pricing and feature sets for comparable packages. Several platforms include built-in monetization options but only for enterprise-grade bundles or the most expensive plans. Keeping these ideas in mind, here a few video monetization platforms to consider.
The first name in our list is Cleeng – a subscription management platform with a number of flexible features. Their paywall options are available for pay-per-view live streaming and video-on-demand subscriptions. Cleeng’s solution includes multi-language support, authentication tools for content integrity and fraud prevention, and a revenue-sharing model of 2.5% + $0.99 per ticket sold (plus processing fees).
Up next is the online video platform Muvi. Their service also supports both live streaming and VOD and includes a native video player and select monetization tools. Muvi’s paywall implementation works with all major advertising, PPV, and subscription models but is less secure than some other platforms. For example, there are no geographic and referrer restrictions and limited password protection.
Entry-level packages start at $199/month, but streaming professionals typically opt for the standard plan at $399/month. Enterprise packages go all the way to $3900 and beyond.
Providing a variety of OTT and video hosting services, Lightcast also helps broadcasters develop mobile and custom SmartTV applications. They support all major monetization options, but their paywall tools are add-ons (and cost extra) for most account plans.
Pricing ranges from $199 to $1799 per month depending on the package and options selected.
Similar to Cleeng, InPlayer is a video monetization and paywall solution for both pay-per-view and subscription-based revenue models. The InPlayer solution includes coupons, geoblocking, and multiple currency options, and custom features like paying with social media outreach (a “tweet”, “like”, etc.).
The InPlayer platform also includes API access and a native CRM system for capturing user data. Their revenue sharing model works out to $0.50 per transaction plus 10%.
Last but not least, Dacast rounds out the list. Our live streaming and video on demand platform support pay-per-view, subscriptions, and advertising on-demand revenue generation models. Streams are delivered via the top-tier CDN service with user paywalls integrated directly into Dacast’s white-label video player.
Our subscription management system offers weekly, monthly, quarterly, biannual, and yearly renewal options while our paywall solution accepts 135 different currencies (and counting) and is translated into 10 different languages.
Streaming media audiences voted Dacast as the best SMB online video platform of 2019 and runner-up for educational video delivery. Broadcasters have nominated (and placed Dacast in the top three) for multiple award categories six years in a row!
Prices start at just $39/month for the Starter plan and include ad insertion, paywalls, and unlimited live streaming events. All from a secure online video platform that allows you to grow your audience at scale.
For broadcasters and online brands, video monetization is a catalyst for growth, profit, and sustainability. Providing quality content to audiences is more important than ever and organizations that do it well can generate substantial revenue from ads, subscriptions, and pay-per-view transactions.
OTT video platforms like Dacast make it easy to profit from live streaming content or existing video-on-demand libraries. Our powerful online video solution offers enterprise-grade performance, security, and monetization features all for a single low price.
Each package includes secure video hosting with 24/7 support, reliable performance via the Akamai CDN, and customizable APIs for video content and player management. No other solution offers so much value at such an affordable price.
If you are ready to add video monetization to your content strategy, contact us today to get started. We offer a FREE 30-day trial (no credit card required) and don’t require long-term contracts or charge hefty setup fees.
Do you have questions or comments about video monetization solutions, paywalls, advertising, Dacast, or anything else? We’d love to hear from you in the comment section below.
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