When you watch videos on the internet, you’re almost always doing it over the top— but we’re not talking about your binge-watching habits. Over-the-Top (OTT) is the video distribution method currently dominating the market. Massive streaming platforms and video-on-demand (VOD) providers like Netflix, Amazon Prime Video, and YouTube deliver all their content via OTT. Fortunately, you don’t have to be a tech giant to reap the benefits. OTT platforms are now available to marketers, businesses, and online news broadcasters.
The OTT video market is on track to bring in more than $275 billion in revenue this year. To tap into that potential, you need to monetize your OTT video content. While streaming and VOD services contribute heavily to OTT revenue, the most significant share comes from advertising.
Whomever your target audience is, they’re probably already enjoying OTT video. The average person watches thirty-eight hours of online video every month. For marketers and broadcasters, OTT video offers many opportunities to generate revenue.
This post will take a deeper look at OTT video, why you should use it, and the seven methods experts use to monetize OTT video.
What is OTT?
OTT refers to any online video streamed directly from the provider to the customer. The name alludes to the idea that this method delivers video content “over-the-top” of existing media channels, allowing customers much greater choice over their viewing options.
From a technical standpoint, OTT delivers content over the open internet. In this way, it differs from Internet Protocol TV (IPTV), which uses internet communication technology over a closed network to broadcast video.
OTT and VOD have a close association, but they’re different. VOD can be provided through non-OTT channels, such as a cable box, while OTT can include live streaming video and VOD offerings. OTT is often streamed on mobile phones or tablets, but many people watch on Connected TV (CTV) devices (televisions or connected accessories, like game consoles) that can access the internet and play streaming content.
By allowing creators and audiences to step around the traditional gatekeepers of mass media, OTT has made high-quality video advertising and broadcasting opportunities available to a much broader audience. Thanks to OTT, a wide variety of niche video markets can thrive.
What kind of content is broadcast OTT?
Streaming services like Netflix and Hulu may be the first things that come to mind when you think of OTT video, but hit movies and TV shows aren’t the only content that makes a successful OTT platform. Here are a few of the other popular content categories:
- Fitness – Live and recorded workout videos are both popular.
- Travel – OTT video is used to provide virtual tours or walkthroughs.
- Language – Video can be a great way to develop language skills, and OTT allows learners to proceed at their own pace.
- Sports – OTT can connect global audiences to their favorite local teams even when they’re thousands of miles from home.
- eLearning – Online classes and training videos are used to teach valuable skills and information without in-person attendance required.
- Online News – OTT platforms can empower independent journalists to reach a wider audience.
Why should you start your own OTT channel?
If your business has material that could turn into compelling video content, you could be making money with an OTT channel. It’s even better if you can affordably produce content at scale, which is entirely within reach with today’s AI-based video generators.
A custom OTT channel is a great way to showcase your brand, establish your authority within your industry, and build trust with your audience. The one item you’ll need to get started is an OTT platform. Choices popular with marketers include Dacast, IBM Cloud Video, Muvi, Uscreen, and Vimeo.
All of these platforms will allow you to monetize your videos in various ways, with many of them including monetization features built right into the platform.
7 Expert Ways to Monetize OTT Videos
There are two primary ways to monetize OTT videos: either by charging for them directly, via subscription or VOD, or by selling advertisements. The OTT ad market is hot because advertisers know how effective they can be. 66% of OTT viewers report learning about a new product or service through a streaming video commercial. However, some content is compelling enough to succeed as paid VOD, and many viewers will pay a premium to avoid watching ads.
With all those possibilities in mind, here are seven ways the experts monetize OTT videos:
1. Video Advertising Networks (VAN)
Joining a VAN is one of the easiest ways to start monetizing your videos. The VAN takes care of the hard part—going out and finding advertisers—and automatically serves up commercials alongside your content. The downside is that you will make less money per ad and don’t have full control over which ads viewers will see.
2. Direct Advertising
With direct advertising, you don’t have a middleman taking a share out of your revenue, and you can select advertisers who are a good fit for your brand. However, you’ll also need to figure out your own ad server solution, find advertisers, and negotiate advertising rates. If you’re running a small operation, this can be a lot to deal with on an ongoing basis.
3. Sponsorship Deals
One particularly appealing option is a sponsorship deal in which a few advertisers pay for exclusive advertising rights, sometimes with product placement and other tie-ins. This method can be great with the right sponsor because it spares you from the constant chase of courting new advertisers. But it makes you greatly dependent on a single partner, which can put you in a bind if the relationship sours.
4. Ad-Supported Video-On-Demand (AVOD)
VOD is the most viewer-friendly way to deliver OTT video, and it can be offered free to the viewer and supported by any of the advertising models listed above. AVOD is a way to reach the widest audience possible, and you’ll be able to charge higher ad rates as your viewership increases. AVOD is the default mode of engaging with YouTube. You can watch any video you want, but you have to watch a few short ads first and at various intervals afterward. If the content is valuable, viewers won’t mind.
5. Transactional Video-On-Demand (TVOD)
TVOD is the classic pay-per-view model, where viewers pay only for specific content they want to watch. Access to purchased content can be on a temporary (rental) basis or permanent. TVOD can be a good model if you have niche content for particular audiences. You may also be able to boost your revenue under this model by offering bundled video packages at a discount.
6. Subscription Video-On-Demand (SVOD)
Popularized by Netflix and countless other streaming services, SVOD offers viewers full, ad-free access to your entire content library for the cost of a recurring subscription. Viewers like this option because they often perceive it to be a good value, but it’s also a great deal for the content provider who can enjoy a dependable stream of consistent revenue. Success with TVOD is achieved by regularly providing or generating fresh content, or you may see your subscription numbers start to drop.
7. Hybrid Model
Nobody says you have to stay locked into a single VOD model. The hybrid model is quite popular with streaming platforms, as it maximizes revenue-making opportunities. For example, Amazon Prime Video combines SVOD with TVOD. It gives subscribers unlimited access to a vast library of movies and shows, but some content is only available for rent or purchase under a TVOD model.
Video Streams Feed Revenue Streams
Video is far and away the internet’s preferred type of content, and OTT is how it gets delivered to us now. Turning your marketable content into videos and monetizing them across OTT platforms allows you to participate in the streaming video revolution and make money while increasing your reach and authority with the audiences who matter.
One thing that can be challenging is keeping up with your audience’s demand for more video content. Fortunately, becoming a video production powerhouse doesn’t have to break your budget. AI video generators like Hour One can easily generate hours of original, affordable content at scale. Give Hour One your content in text format, and it will quickly create a compelling, professional-quality video with a realistic virtual presenter. Try it yourself to see how simple it is to make high-ROI videos with Hour One to broadcast OTT.
The Over the Top video distribution method is the most popular way to stream and watch videos over the internet. Marketers and businesses can generate significant revenue by monetizing OTT videos according to these seven expert-recommended methods: VAN, direct advertising, sponsorship, AVOD, TVOD, SVOD, and the hybrid model. Success in OTT video monetization requires you to generate a lot of fresh video content, and Hour One’s AI video generator makes it fast, easy, and affordable.
