The Professional Guide to Video Monetization

By 2032, the live streaming industry is projected to reach $520.7 billion up from $70.2 billion reached in 2023. The video industry is exploding and thousands of businesses are getting involved or mobilizing to do so. This blog will share professional tips for pay-per-view video monetization.

Overall, 51.9% of marketing professionals worldwide name video as the type of content with the best ROI (ROI stands for Return On Investment). This isn’t surprising, considering that marketers who use streaming video are seeing 49% faster growth in revenue. These figures highlight the immense power of video content to not only engage audiences but also drive business success. 

In this article, we’ll take a detailed look at how to successfully monetize video content. Also, we’ll review steps to ensure viewer engagement compared to free content.

Now, let’s jump right into the why and how video monetization.

• Why (and how) to do video monetization
• The value of premium content
• Pricing science
• Pay-per-view, video advertising, and subscriptions
• How to achieve effective video monetization
• FAQ
• Conclusion

Why (and how) to do video monetization

Despite the proliferation of content on the internet, premium paid content continues to grow. Viewers are becoming increasingly selective about what they invest their time and money in. In fact, the internet today represents one of the biggest boons that content creators have ever had. For the first time, distribution has been democratized. In other words, anyone who creates great content can stream it to an audience of millions. Creators who monetize their video content do not only turn their passion into a source of income, but also reinvest profits back into their content, improving production value and audience reach. This makes creating high-quality, engaging videos even more crucial for success in video monetization.

Now, that’s not to say that it’s easy to do video monetization. Competition is fierce. A recent report from Streaming Media finds that video monetization is one of the biggest challenges for content publishers in 2018. However, there are a number of excellent methods to help you monetize effectively. Understanding your audience demographics and their viewing habits is key to choosing the effective monetization method. Let’s review the various methods for monetizing your video production below.

Battling the competition

Video is a massive and growing market, experiencing explosive growth that has reshaped how audiences consume content. Traditional broadcasting companies, like TV and cable networks, were initially slow to enter the online video production realm. However, they’re now all-in with the video usage trends. In particular, some businesses, such as HBO, see great success with OTT video monetization, proving that traditional players can still thrive in the new landscape by offering high-quality content conveniently delivered through online streaming services.

Companies like HBO are also competing with Netflix, Amazon Prime Video, and iTunes. That’s on top of the millions of regular people and entrepreneurs making and uploading video content to the web and social media platforms. This explosion of user-generated content further democratizes the video space, offering a wider variety of voices and perspectives than ever before.

The takeaway: The key to succeeding in the video monetization market is to create compelling material that viewers want to see.

The value of premium content

Yes, it’s true. People are still willing to pay for content they find valuable and compelling.

Tamara Alesi, the media capability lead at DigitasLBi, calls premium content “the prime time of digital.” Alesi explains that the term prime time can be adapted from traditional TV to account for high-value content. “It’s not necessarily a time slot during the day, just the content that’s most wanted,” she explains.

Hence, offering premium content is not just about catching viewers at a specific time. It’s about capturing their interest and offering something so valuable that they’re willing to invest in it.

Pricing science

Before we dive into technical specifics around video monetization, it’s important to understand some of the theory. In this segment, we’ll look briefly at the science of selling. This is a huge topic that we can’t cover in detail in a single article. However, let’s quickly review two psychological factors around pricing that may influence your video sales.

The JTBD example

First, let’s talk about premium pricing. In the business sector, it’s well recognized that people are willing to pay for a good or service based on the value they perceive. The good news? Perceived value is something that you can affect. That’s the idea behind much of modern marketing, such as the JTBD (Jobs To Be Done) model.

JTBD asks you to determine for what reason your customer is really buying your product or service. Let’s look at an example. I’m writing this article on a high-quality 24″ Dell computer monitor. The “job” for which I paid was to increase my efficiency as a writer and make photo and video editing easier.

I didn’t pay for a big screen, or certain color depth, or any other technical detail that the engineers figured out. Sure, those details figured into my purchase, but the core of my decision centered around these questions: what job will this product/service perform for me? Will it make my work more efficient and easier?

Once you have figured out the “job” of your video products, you can market and price them much more effectively.

Anchoring in pricing

One psychological factor behind the pricing is the idea of anchoring. Anchoring is the implicit value that customers put on a good or service.

As an example to compare desktop software applications to mobile apps, Photoshop or Microsoft Office costs hundreds of dollars. Mobile apps are often $5 or less.

Here’s the rule: the pricing of the most popular, well-known content determines the “anchor” by which we judge whether other, similar content is “cheap” or “expensive.”

You can use this logic to your advantage by anchoring with more expensive content. For example, you may plan to offer only one pricing option—say, a $50 annual subscription to all your video content. However, it may be more effective to first offer a $ 250-lifetime subscription. This may “anchor” the customer’s perception of pricing at that level and lead them to perceive the $50 annual option as a fantastic deal.

This is just scraping the surface of pricing science. There are tons of research regarding pricing and human psychology. If you want to learn more about this topic, I recommend hopping on your favorite search engine and entering “pricing psychology.” You’ll learn a lot, and this information can help guide your business decisions.

Pay-per-view, video advertising, and subscriptions

There are three main methods of monetizing video: pay-per-view (sometimes called “transactional”), advertising, and subscriptions. Each method offers benefits and drawbacks. The best video monetization approach for you depends on a wide variety of factors, including the type of content you create, your audience demographics, and your overall business goals. 

The rest of this article will examine the three methods of video monetization, helping you understand their advantages and disadvantages. We’ll also explore strategies to use each method and maximize your return on investment from your video content.

Pay-Per-View

PPV is the simplest pricing scheme. You watch, you pay. Each piece of content costs money. Pay-per-view has long been a staple of professional sports fans, especially boxing and MMA. These broadcasts have been some of the most lucrative ways to streaming live events in sports history.

Pay-per-view is well suited to events like international sports, concerts, conventions and trade shows, conferences, and similar events. Any one-time event that can generate significant interest is a great candidate for PPV. PPV can also be excellent for monetizing entertainment content libraries. Creators can offer niche content or a classic film that might not warrant a subscription but still hold value for dedicated audiences.

However, PPV isn’t without its drawbacks. The biggest hurdle is convincing viewers to spend money on something they haven’t seen. Unlike subscriptions, where a library of content justifies the cost, PPV puts the responsibility on viewers to find the content they value enough for the price.

Advertising

The second method we’ll examine is video monetization via ads. Ad monetization is increasingly popular as audience sizes grow, especially on mobile devices. Advertising, as you might expect, is most lucrative when audiences are large. That makes it ideal for hugely popular events, like live sports on streaming apps or product launches with a significant fanbase. 

In 2016, analysts estimated that mobile ad revenue represented a $16 billion revenue opportunity in the US alone.

There are both advantages and disadvantages to consider with ad-based monetization. Ad revenue can grow proportionally with your audience. The more viewers you attract, the more ad impressions you get, potentially generating significant income. However, for smaller channels, ad revenue might be minimal. Building a sizable audience is crucial for this method to be successful.

Additionally, many platforms like YouTube and even some smart TVs like Android TV and Fire TV have built-in ad monetization features. This makes it easy for creators to get started without needing extensive technical knowledge.

However, ads can disrupt the viewing experience, especially if they are poorly placed or excessive. Imagine watching the climax of a Star Wars episode on your Disney+ subscription service only to be interrupted by a commercial for a new car. 

Using this strategy, effective monetization requires finding a balance between generating income and keeping viewers happy.

Subscriptions

Subscription monetization, also known as SVOD (Subscription Video On Demand), is a powerful tool for creators and broadcasters alike. Here, viewers pay a single, recurring fee (monthly or annually) to gain unlimited access to a library of content. This can include everything from original series and movies to live streams and archived broadcasts. Some estimates state that more than a third of professional broadcasters monetize their content via subscription models.

Subscription monetization makes the most sense for ongoing, regular content released on a schedule, offering a wider variety of streaming options at a potentially lower cost. This includes entertainment, talk shows, news, sports leagues/teams, and so on. Popular services like the Disney Bundle (combining Disney+, Hulu, and ESPN+) cater to diverse interests and compete effectively with cable giants. 

Subscribers enjoy the flexibility of watching content on demand across multiple devices (phones, tablets, smart TVs, game consoles like Nintendo Switch) whenever they choose. Many platforms even offer features like parental controls and the ability to stream on four simultaneous streams, making them ideal for families. Watching subscription-based OTT video services is a daily habit for 60 percent of adults in the US, showing that this model is gaining more popularity all the time.

On the downside, subscription fees can create a paywall that can prevent viewers from accessing specific content unless they subscribe. This can be a barrier to attracting new viewers who might prefer a free, ad-supported tier before committing to a paid subscription. To address this, consider offering a premium account with additional features like ad-free experience or access to live channels (like live news) alongside a basic subscription tier.

How to achieve effective video monetization

Whatever method you choose for monetizing video, you’ll need the technology to make it work. Usually, that means working with an Online Video Platform, or OVP. An OVP is a service for hosting and delivering both Video-On-Demand (VOD) and live video streams. Check out the link above to learn more about what an OVP is and how they function.

Monetizing video is a challenge—no doubt about it! But with the right strategies around pricing and marketing and the right tools to implement your monetization plan, you can generate significant income via online video.

A quality OVP will include tools like an integrated paywall and video management system, to make it easy. These tools allow you to easily choose your preferred monetization options, set pricing levels, and begin generating revenue from your videos. This can be a subscription model with tiered pricing for different levels of access, or a pay-per-view system for specific live events. There are options to limit the number of simultaneous streams to prevent unauthorized sharing. 

You can also explore integrating your content with a local media library, allowing viewers to access educational or historical documentaries through a dedicated streaming app. There are many other innovative monetization options the industry is testing out. To learn more about these experimental methods to monetize video, check out this event recording from Streaming Media Europe (warning: you must register to watch the video).

FAQ

1. Is there a totally free streaming service?

Yes, there are several  free streaming services available. Here are some of the most popular options:

• Pluto TV
• YouTube
• Amazon Freevee (formerly IMDb TV)

These services typically rely on ads to keep things free, so expect to see commercials throughout your viewing experience.  

2. What is the difference between TV and streaming?

Traditional TV broadcasts content through a cable or satellite signal, while streaming services deliver content over the internet. This means you can watch what you want, when you want on streaming services, whereas traditional TV relies on scheduled programming.

3. What is On Demand streaming?

On-demand streaming, also known as video-on-demand (VOD), is a way to access and watch movies, TV shows, and other video content whenever you want, rather than being restricted to a set broadcast schedule.

4. How can I stream live for free?

There are a few ways to catch live streams for free:

• Free streaming services: Some free services, like Pluto TV, offer live TV channels with news, sports, and other programming.
• Social media platforms: Some social media platforms, like Facebook and YouTube, allow users to broadcast live.
• News websites: Many news organizations offer live streams of press conferences, breaking news events, and other programming.
• Sports websites/apps: Some sports teams or leagues may offer free live streams of certain games or events.

5. Is Netflix considered a VOD platform? 

Yes, Netflix is a VOD platform. Netflix provides a subscription-based service where you can stream movies and TV shows on demand.

Conclusion

Hopefully, this article has helped educate you about video monetization. It’s an exciting—and potentially lucrative—time to be involved in the industry. At least, if you have the right tools.

After reading this article, you may be looking for an online video publishing platform with robust video monetization tools. Our platform, Dacast, offers a built-in video paywall and support for pay-per-view, subscriptions, and video advertising. Dacast provides a powerful video player for broadcasting for your audience. Whether you’re using a web browser or a mobile app, Dacast’s technology ensures your viewers have a seamless experience, regardless of the media player they use. Plus, we offer Akamai CDN delivery and a range of other features at the best prices on the market. 

We hope that you’ll consider giving the Dacast platform a try. If you’re interested but not ready to commit, why not take advantage of our 14-day free trial (no credit card required) to monetize your video content?

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