In creating The State of OTT Revenue 2021, Applicaster took insights from nearly 100 streaming executive decision-makers in broadcasting, direct-to-consumer (DTC) video brands, and multichannel aggregators to explore 10 key OTT subjects that define the industry in 2021.
As a stake in the ground as to how the quickly the industry is progressing to date, Applicaster found that in addition to overwhelming expectation of streaming growth, as many as three-quarters of respondents planned to change their monetisation model this year or were considering making a change.
Audiences were found to be increasingly expecting customisation, in both viewing experience and pricing options. And this has led to increasing experimentation with different revenue models. Advertising was the most prevalent revenue model, currently used by two-thirds of respondents, and usually in a monetisation mix, according to the study.
However, in 2021, 54% of OTT brands plan to change their business models to appeal to a wider range of viewers, with an additional 22% considering it. Two-thirds of OTT brands said they were now transitioning to a hybrid monetisation approach, with only a third choosing a single model. In fact, the study showed 19 different combinations of revenue tools were currently being utilised across platforms.
Brands also plan to grow by expanding the number of platforms in their streaming strategies, not only taking advantage of the growth of smart TV viewing but also its interplay with mobile. Over the course of the year, two-thirds said they would launch app(s) on more platforms while 57% planned to create more content for their apps. A slightly smaller number expected to launch more properties/apps on existing platforms, while just under half said that they would license more content for their apps.
“[The State of OTT Revenue 2021 report] clearly shows top media executives are diversifying streaming and revenue models amidst this tsunami of digital content demand,” said Applicaster CEO Ido Hadari. “Covid-19 changed how we consume media, and brands are getting increasingly creative in mixing and matching different revenue models to be able to serve the expanding number of cord-cutters, cord-nevers, and cord-shavers.”
“Media executives understand viewer behaviour will continue to evolve, long after apps launch. It’s not enough to keep pace with their app offerings, they need to continuously evolve their business models as well,” added Devra Prywes, Applicaster CMO and CPO. “It’s clearly important not to get stuck in only traditional revenue models, but to create a matrix of options. The growth in advertising shows that content owners realise that users are price-conscious, and want to experiment with offering low-priced, or free, options to be accessible to an even greater audience.” Rapid TV News