Hybrid Monetization: The Future of OTT Platforms

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 LinqTV 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 se