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5 Tips for Increasing OTT Revenue

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It wasn't all that long ago that HBO, MTV, ESPN, and Nickelodeon made up the backbone of most American families' home entertainment viewing. Network television was still a major presence, and the rise of VCRs offered a new way of experiencing movie night. But cable television's popularity in the 1980s and '90s was an eruption on the grandest scale, and the reasons were simple: people like more choices and easy access—and they're often willing to pay for them. That included a willingness to consume pay-per-view video programming like boxing cards, concerts and other one-off, big ticket events.

There are lessons to be found in cable TV's short history that should be taken to heart by today's over-the-top media services. Above all: adapt or die. Many home viewers still go out of their way (and are willing to part with their discretionary dollars) to watch HBO and ESPN programming. But the monolith of cable television is gone, and the media landscape is more splintered than ever. The unquenchable consumer desire for variety and on-demand capability remain, but they may be more difficult than ever to harness. The good news for OTT: We live in a unique moment, when viewers have more time and flexibility to plop down, plug in, and binge away.

Undoubtedly, OTT video is the fastest-growing form of content delivery at the moment. Every year more and more people are ditching their cable subscriptions and moving to online content delivery. More concretely, 25% of Americans don't plan to subscribe to a cable provider by next year. In Europe, OTT video segment revenue is projected to reach USD $25 million in 2020.

It's in that spirit, with many of us stuck at home or finding more time on our hands, that we offer five suggestions for increasing OTT revenue around a semi-captive audience: 

Product Placement

It's a tactic that has been used to varying degrees in entertainment media over the years, and frankly, it gets a bad rap. The cheesy and overt product placements of years past have been replaced by savvier, better-integrated versions in programming of all kinds. In an era when traditional advertising is drying up and becoming less lucrative for broadcasters, product placement should be considered a strong alternative.

Subscription Tiers

For years, cable package buyers have complained of being forced to make an all-or-nothing choice. And why wouldn't they? Who wants to pay full price for a bundle of channels when half of them will go unwatched? Subscription tiering and pay-per-view video purchasing provides viewers more choices and better value, and could help attract potential buyers who otherwise would have chosen to go without.

Pay-per-view is extremely popular for sporting events as it allows the viewer to watch a one-off event without having to subscribe to a range of sports. A lot of TV networks provide this option. For instance, Wrestlemania 30 was watched by approximately 667,287 subscribers and an additional 400,000 on pay-per-view.

OTT video can be delivered via an OVP (online video platform) solution so that subscription tiering and monetizing becomes a lot easier. Together with an OVP and a paywall solution, content owners can seamlessly tailor their video monetization strategies to serve their audience with a solution that meets their needs.

Solutions are also available that allow content to break out key moments from live PPV events. These allow viewers to watch the content they want, when they want – the 10 last minutes of a game, conference highlights, post-match interviews or just anything that might interest them to consume a series of bitesize content. 

Loyalty Programs

Discounted pricing and exclusive content offerings for big spenders and frequent flyers build in value and customer loyalty. Offering new-subscriber deals can help grow a business, but what about retention? Existing customers who feel neglected or exploited often jump at the first good deal from a competitor. Quality content and fair pricing go a long way.

Proprietary Devices

Remember the Zune? It was Microsoft's answer to the iPod, and it wasn't a bad product. But why did one flop while the other skyrocketed into the stratosphere? Because Apple curated a smart online store with plenty of variety to fill its iPod, while Microsoft came up short. Proprietary hardware can provide an additional revenue stream, but the tech, its synergy with the software, and ultimately the quality of content it contains all must be up to snuff.

Better Targeting Technologies

Streaming television services are designed to learn what consumers listen to and watch, then suggest similar content to keep them tuned in. Here's the rub: They're kind of bad at it. Improving algorithms and possibly creating new tech to get to the bottom of what attracts and inspires individual consumers will be an important step into the future for OTT platforms. 

To get customer insights and deliver holistic customer experiences, OTT providers need a smart data technology stack that is intentionally designed to provide key capabilities around the management, analytics, and activation of customer data. By bringing segmentation capabilities in house and combining it with first-party data subscriptions to specific data about audiences, OTT providers can overcome challenges, such as the inability to recognize some visitors to their digital properties or to connect data about different user behavior.

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

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