How to Create OTT Pricing Models for Your Streaming Service

Over-the-top video streaming, or OTT Platform, is becoming increasingly popular. In fact, sales of streaming services are expected to reach $125 billion by 2025. Apart from Netflix and its competitors, traditional broadcasters, large content creation companies like Disney, and a slew of unexpected businesses are stepping into the game. While getting into an OTT solution may seem like a no-brainer, pricing such a service can be challenging. Here, we’ll discuss some basic OTT pricing model guidelines, starting from determining how and who to charge. Before we get into everything about OTT Platform Pricing/OTT Platform Cost, let’s have a look at the OTT Business Models.

OTT Business Models

So, how does OTT make money/how do ott platforms earn money – it is one of the most common questions of broadcasters. Broadcasters can monetize their best OTT platforms in several ways. Subscriptions, ads, pay-per-view, and a hybrid of these models are among them.

Let’s look at how each of these OTT Business Models works so you can decide which OTT platform revenue model is best for your business.

• Subscription-based video on demand (SVOD)

SVOD is a video monetization method in which viewers pay a monthly, quarterly, or annual subscription fee for unlimited access to your on-demand content library. With this model, viewers know exactly how much they pay each month.

• Ad-based video on demand (AVOD)

To monetize content, ad-based video on demand (AVOD) employs sponsored advertisements. Generally, viewers “pay” for content while watching an ad for a few seconds to a few minutes. This method is commonly used when delivering content to an audience willing to pay less for live streaming.

• Transactional video on demand (TVOD)

TVOD, also known as “pay-per-view.” As the name implies, viewers can pay for access to individual pieces of content. Viewers can rent or buy video access through pay-per-view streaming. Pay-per-view works well for special events like concerts, plays, or live sporting events.

• Hybrid

A hybrid OTT pricing model combines two or more of the above models. Hybrid pricing models are becoming increasingly popular because they allow broadcasters to provide flexibility in payment options for their users. 

Once you have got answers to questions such as how ott platforms make money and how ott makes money, the next step is to decide the cost of the ott platform. 

How to Set an OTT Cost for Your OTT Platform Business Plan?

Creating an OTT pricing model is a vital step in your OTT platform development. It generally requires some research and consideration. You must be realistic about the worth of your platform. However, the OTT strategy may vary based on the OTT streaming platform, but here are a few considerations when calculating your OTT cost. These factors will help determine ott app subscription price.

# The Goal of Your Content

The goal of your content will help you decide how to create your OTT pricing model. It is critical because it influences how your viewers consume the content.

# Operating Costs

There are various costs connected with running a streaming platform, and such costs will come into play when deciding how much to charge for your platform.

# Audience’s Preferences

Knowing your audience is vital to developing a viable OTT pricing plan. How your viewers like to consume your content will influence how much they are ready to spend.

# Brand Visibility

Are you just starting out, or do you have a large, loyal fan base? Your answer will help determine the cost of your OTT platform pricing.

# Cross-collateralization

Will your OTT platform act as a loss leader or promotional tool to promote real-world sales, or will it need to stand on its own two feet? This factor will help determine the OTT Cost.

The Different Types of OTT Content Pricing Strategies

Here are some of the more popular pricing packages that you may want to consider for your ott business plan:

• Freemium Pricing

This strategy increases the chance of customer acquisition because your OTT content will be accessible to customers who are not yet ready to commit. If free content helps convert prospective subscribers into paying subscribers, your commerce system will likely need to approach this model.

• Device-wise pricing

Several OTT businesses now charge users based on the number of devices they use to access a specific platform, which in turn, increases ott revenue while contributing to digital security. This model, however, is not suitable for platform users who prefer to access their content while on the go using different devices.

• Duration-wise pricing

This business-friendly strategy is based on the platform’s duration, where users can get charged, and real-time analytics are accessible. However, when users are not using the platform due to other reasons, charging them may not seem beneficial. Furthermore, if customers have leftover shows or movies, payment procedures may become tedious, prompting them to switch to another platform.

Wrapping Up

Do you run an OTT platform and want to know how to price your content? Are you unsure how to price your content to make a profit while attracting viewers? If so, OTT Platform Providers can help. They have industry expertise and can help you create a pricing strategy that works best for your OTT platform and content.