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Deploying a Hybrid Monetization Strategy: Simplicity, Agility and Visibility in Content Management

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Flexibility and adaptability are essential for monetizing video content in new markets and in new ways. No one monetization model will serve all audiences or support the monetization of every type of content. This means providers have to be ready to shape their offerings to meet audience expectations and capture new revenue. Otherwise, they will miss growth opportunities while turning off audiences.  

The danger is that a monetization model is not aligned with consumer expectations. Subscription models that work in developed and affluent markets might alienate audiences in lower-income markets where advertising-based monetization is a better fit. Similarly, high-value content like a new Hollywood release can be monetized via a one-off rental or purchase, while a terrestrial TV show is better suited to the Fast Ad-Supported Streaming Television (FAST) model or simply an AVOD model.

What matters is that providers are thinking strategically about how they monetize content in unique markets and deploy management platforms that support hybrid monetization. In competitive and rapidly changing markets, they need the freedom to continually adapt to user behaviors and enter new markets with different monetization models. Just like how localization is now key on the content level for platforms targeting different markets, it has become essential to look at different monetization strategies for different markets.

The worldwide revenue in the OTT video market is projected to reach $434.5 billion by 2027 with a compound annual growth rate of 16.5%, according to MarketsandMarkets. Providers have an opportunity to harness this growth if they can capture new audiences, win subscribers, and retain viewers by continually learning and evolving their offerings. Hybrid monetization empowers players in the OTT space to get creative about the bundles and offerings they are delivering and use analytics to drive their decision-making.

CX and Monetisation Models

Monetization isn’t just about an organization's bottom line or return on investment (ROI). It is directly tied to customer experiences. It is critical that providers look at the demographics of their target markets, consumer and cultural norms as well as disposable income. Monetization models shape experiences often from a consumer’s initial engagement with a provider.

Providers work hard to attract and engage new audiences and have to be wary of putting off audiences by misaligning perceived content value and the monetization model. What is considered high-value and essential viewing can vary widely across markets.

Audiences in India will consume content differently than in North America. The question for providers is are they are ready to analyse this with data and bring some precision to their offerings? This means that providers must have the agility to develop different packages based on the content type and how it can be monetized, for example, having paid packages for premium content.

Misaligning content with monetization models impacts audience engagement and in turn revenue as well as marketing ROI. Providers must win audiences over every step of the way and that includes the monetization phase.

The Power is in the Platform

Getting hybrid monetization strategies right starts with an OTT video management solution. Platforms have to be able to support multiple monetization models within a single experience. This frees providers to continually adapt their offering to markets, audiences and content without needing to deploy multiple solutions or integrations. Enabling different monetization models shouldn’t be complicated, timely or costly for providers.

Within a content management platform, a provider must be able to deploy these models with the same experience and ease of delivery:

Ad-Based-Video-On-Demand (AVOD) - Relies on advertisers to generate revenue while users access the content for free in exchange for viewing advertisements, for example, YouTube.

Transactional-Video-On-Demand (TVOD) - Users are charged a one-time fee for a certain allotted number of views crossed with device concurrency limitations, for example, hosting a newly released movie or live events.

Subscription-Video-On-Demand (SVOD) - Allows users to access content for a recurring fee charged weekly, monthly or annually depending on the service, for example, Netflix.

Free Ad-Supported Linear Streaming TV (FAST) - These channels combine traditional lean-back television with OTT capabilities like custom content curation. They are provided free of charge with targeted advertising.

A combination of all of the above with different audiences and markets in mind drives a hybrid monetization strategy. At the same time, having multiple payment gateways within a single platform enables further tailoring of services to markets, audiences and content. An OTT platform has to offer a range of different payment gateways to enable providers to offer audiences recognizable and easy payment options. For example, debit or credit cards are commonly used in some countries but are rarely used in others. They need to be prepared to accept payments via a variety of means to ensure customer experiences remain simple, seamless, and end-to-end.   

Rather than limiting their targeting pool by not being able to integrate a variety of payment methods, providers can deploy a hybrid model and offer several payment gateways for different customers. This immediately enables providers to easily cater to audience needs and expand their services.

All of this has to be underpinned with analytics and business intelligence that provides visibility into audience behaviors, viewing habits, and content profitability. Analytics drives optimization and decision-making around monetization. This level of access to data and analytics allows providers to continually evolve offerings and retain viewer loyalty and engagement. Combined with integrating a hybrid model, this puts providers in the best position to accelerate growth and generate revenue.

The result is a data-driven approach to monetising video content with the ability to adapt, pivot and change to meet audience requirements. Within a single platform, a provider can experiment with different models, test offerings and change without needing to invest new resources in integrations or developments. With the right platform, hybrid monetization accelerates audience growth, increases viewer satisfaction, and drives new revenue opportunities.

[Editor's note: This is a contributed article from Mangomolo. Streaming Media accepts vendor bylines based solely on their value to our readers.]

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