OTT Video Monetization: The Ultimate Guide for Professional Broadcasters [2024 Update]

OTT (over-the-top) video is one of the greatest trends in content creation and delivery today. Traditional media is dying. With that, ever-increasing numbers of people are ditching their cable subscriptions and moving to streaming online content using OTT platforms.

The numbers show that 24.6 million U.S. households have cut their TV cord. So, it is no surprise to expect that this number will rise to 46.6 million U.S. households by the end of 2024. Instead, Americans are signing up for streaming platforms and subscription-based services. People simply prefer instant on-demand access to a modern streaming service. Consequently, professional broadcasters and savvy businesses are taking advantage of this trend by delivering their video content via OTT technology.

In this article, we cover what OTT distribution is and OTT monetization strategy. We also delve into best practices for OTT video to bring in a consistent income stream. This includes how to provide secure video delivery, payment security, and plans to bolster your marketing efforts.

Table of Contents:

• What is OTT Video?
• How to Monetize OTT Video Content
• Monetizing Both Live and On-Demand Video
  • Monetizing with Ads (AVOD)
  • Monetizing with Pay-Per-View (TVOD)
  • Monetizing with Subscriptions (SVOD)
• Best Practices for Over-the-Top Video
• Conclusion 

What is OTT Video?

Over-the-top (OTT) video is a method of broadcasting that transmits video content over the internet. OTT video is a modern alternative to traditional methods of broadcasting, including satellite and cable.

The benefit of OTT video is that viewers can easily access videos from any device with an internet connection, such as smart TVs, smartphones, tablets, laptops, and more. This eliminates the need for a mess of cords and bulky hardware.

Some examples of services that use OTT technology to deliver their video content include Hulu, Netflix, Prime Video, and Disney+.

Since OTT streaming is becoming more and more popular, there are endless possibilities for professional content creators and broadcasters who want to monetize OTT streaming services of their own.

How to Monetize OTT Video Content

To begin monetizing OTT video, you need to choose an online video platform that is equipped with the appropriate monetization features.

That’s where a service like Dacast comes in. Our OVP makes it easy to upload, stream, host, deliver and monetize video content worldwide.

Once you’ve chosen an OTT monetization model for your video platform, the whole process becomes easy. All that it takes is enabling certain settings in your account options, configuring monetization settings for each video, and adding a payment option so you can collect your money with ease.

Monetizing Both Live and On-Demand Video

OTT mostly revolves around video on demand (VOD), meaning viewers pay for access to a specific video or library of content that has been pre-recorded and uploaded. 

While the majority of OTT video content is VOD, live streams are also often delivered with  OTT technology. Premiers, award shows, and sporting events are especially popular.

It’s possible to monetize both live and on-demand video content. There are three major video monetization strategies that professional broadcasters use. These include AVOD, SVOD, and TVOD.

1. Monetizing with Ads (AVOD)

The most common monetization model is AVOD advertising. This monetization model has been used in traditional television for decades, and it has only gotten better with the advance of OTT video streaming. 

YouTube’s ad-based monetization model is a perfect example of this method. Rather than paying cash for access to videos, users spend about 10 seconds of their time viewing an ad that is paid for by a sponsor.

Advertising can be a lucrative source of income, but that requires attracting a large viewership. 

The best ad-supported programs tailor their advertising to the target audience via keywords or custom selection. Most OVPs such as Dacast allow integration with standard video ad services such as VAST. 

However, don’t forget about sponsorships and direct advertising. It may be more lucrative for you to reach out to specific businesses in your industry to offer them the opportunity to reach your niche audience.

2. Monetizing with Pay-Per-View (TVOD)

Another method of monetization for OTT video is transactional. In other words, viewers pay for each program that they choose to access. This is most commonly called “pay-per-view.”

This is the model followed by iTunes. It is very straightforward. If you want to rent or buy a specific movie or episode, you pay for that specific piece of content and nothing more.

Like AVOD, this model can be extremely lucrative. As long as your audience is highly motivated to watch your videos, you can generate significant income via transactional video monetization.

Online video platforms typically offer an integrated system for transactional video access. Dacast, for example, uses a payment system that allows viewers to purchase video content via a secure video paywall that is integrated into the video player. 

3. Monetizing with Subscriptions (SVOD)

The third major monetization model for OTT video is SVOD subscriptions. Netflix is the most common example of this model. You pay a regular fee and gain unlimited access to a library of video content.

OTT video platforms may integrate subscription payments into their services, as well. At Dacast, the same video paywall used for one-time transactions can handle subscriptions as well. Videos, both live or on-demand, can be accessed via either payment option. 

Please check out the following video to learn how to set up pay-per-view or subscriptions using the Dacast streaming solution.

Best Practices for Over-the-Top Video

No matter which method you choose for OTT video monetization, there are some best practices to keep in mind. 

Let’s take a minute to go over a few of the things that you should pay attention to in OTT video monetization.

1. Payment Security

Any time you are dealing with money, you must consider security. Hacking is a common problem, and major retailers lose billions a year to security and data breaches. Proper threat assessment and mitigation are essential.

For video monetization, that means payment information needs to be encrypted using standard bank-grade practices. This is denoted by HTTPS:// (emphasis on the “s”) in your URL bar. 

Modern browsers typically warn users when they enter payment information on an insecure site. Using an online video platform like Dacast ensures the protection of customer payment details against malicious attacks and interception thanks to industry-standard security measures.

2. Secure Video Delivery

Another element of video security is ensuring the secure delivery of video streams. After all, if you’re monetizing content, you don’t want to make it easy for pirates to intercept, copy and distribute your material.

Prioritize secure video delivery when you choose an online video platform.

A platform like Dacast uses tokenized security to detect and shut down unauthorized video embeds before they can cause damage.

3. Server-Side Ad Insertion

With the proliferation of online advertising, “ad-blockers” are gaining popularity. They’re designed to help people avoid distractions adware and malware. This ad-blocking software, however, can also infringe on revenues. 

One way to bypass many ad blockers is to insert ads on the server before the video reaches viewers. This method is rapidly becoming an industry standard and helps you maximize income.

4. Marketing Plans and Pre-Selling

Another essential part of over-the-top video monetization is effective marketing. 

Essentially, it boils down to this: none of the methods above are going to make you any money unless people want to watch your video. You have to bring the people, and then the money will follow. That means marketing.

At the Live Streaming Summit 2015, Dacast Vice President Gregory Ellis said that one of the most important ways to do this was video pre-selling. Start pre-sales of video content at least a month in advance to generate lots of buzz and excitement, not to mention revenue

Conclusion

There’s no slowing down the rapid growth and popularity of OTT video. With a greater need for on-demand content and the potential for substantial advertising revenue generation, the future of OTT looks bright.

Getting in on the game now if you aren’t already can prove lucrative. And when it comes to OTT video monetization, there are several paths you can take. As we’ve outlined, you can choose between ad-based, subscription, or pay-per-view models. A vital factor in your choice should be having access to the right tools. You need a professional video platform which makes it easy to monetize your content and get your OTT content creation streaming in no time.

That’s where Dacast comes in. With Dacast, you’ll have access to monetization models and a rich array of video streaming features. Dacast is a professional-grade platform for optimizing your OTT video streaming and maximizing your video revenue model.

You can try Dacast’s OTT video monetization platform for free with our 14-day free trial.

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