Significant growth of OTTs opens possibilities for hybrid monetization

According to data from Applicaster and Penthera, the context caused by COVID-19 helped the adoption of streaming services to be almost five years ahead, not only because of the need to find content to consume, but also because it is more convenient than having TV cable. In fact, the number of people who pay for the internet and drop their TV cable system has risen 15% in recent years, according to Dataxis.

If we take into account data from Applicaster and Penthera, who surveyed OTT professionals and service providers, 33% expect their platforms to grow organically based on trends seen in recent months. Not only that, but that growth is estimated by most of them at 25% to 50%.

The greater adoption of OTT, implies greater charges for the services, but also greater opportunities for experimentation when choosing their monetization models. Now there is a critical mass of the public waiting to be conquered by the best offer in terms of content and price.

Most providers tend to choose between AVOD, SVOD and TVOD, but several are already migrating to hybrid models that allow them to charge a lower 'entry price' to access content, such as HBO MAX that offered a 50% launch discount as the offer price in Latin America to subscribers in the first month, a value that would be maintained for the duration of their subscription.

According to those surveyed, the change is already being considered 27% of the total plan to switch to an AVOD + SVOD model, which allows users to have base income, but lowers the price and increases monetization in advertising sales.

In other cases, we have platforms that go from being AVOD + TVOD to being free, but there is also the option of charging a ‘fee’ for accessing exclusive content. In the latter case, we have the example of Disney + that although it uses an SVOD model, it has exclusive content under the eaves of its ‘Premier Access’ which can be accessed by paying an extra, the content becomes PVOD (Premium Video On Demand). The latter is also a model that is being evaluated, because it is about exclusive premieres that are released at the same time as in theaters, subtracting income from the traditional box office.

Experiments regarding models have already begun and major players in the industry are testing new alternatives. YouTube is testing YouTube Premium Lite in European countries, for a lower price in relation to YouTube Premium, this plan allows you to skip the ads, but does not give access to exclusive content. HBO MAX has just launched a new low-cost plan in the US that includes advertising and limits content to 1080p. For its part, Spotify devised ‘Spotify Plus’, which lets you listen to music and removes the limits on skipping songs, but maintains the advertising.

Taking these figures into account, we asked the question on our LinkedIn and 18% of those surveyed said that they would go to a hybrid model if, for example, a platform like Netflix offered them.

The time for change is now, users are increasingly aware of the supply of content and services, but they also take into account the cost of it. The opportunity to conquer them is accompanied by the choice of a suitable monetization model. This is more important than ever, when people return to normality and the services must fight not to lose the users that they gained due to the pandemic (it is estimated that the loss is around 30%).