What is the Best Video Streaming Business Model in 2022?

936 4 minutes read

Just as businesses moved online in 2019, entertainment did so too. Entertainment through television and cinema theatres was replaced by video streaming platforms online. A lot of television channels launched and hosted their video streaming platform to cater to the audience on the internet. In 2019, there were 600 million subscriptions for video streaming solutions. Globally, video streaming platforms generated a revenue of $70,845 million in 2021. In this article, we are going to discuss the video streaming platforms and their pricing models in 2022.

Table of Contents

What Is Video Streaming Business?

Video content hosted on video streaming platform that can be accessed through the internet is termed as an over-the-top (OTT) platform. Video streaming businesses can monetize their OTT platforms either by subscriptions, pay-per-view, advertisements, or a hybrid of these three models.

The four widely used pricing models that are used to generate revenue are subscription video on demand, ad-based video on demand, transactional video on demand, and premium video on demand. Businesses should choose the right pricing model based on their broadcasting goals and unique features of their OTT platform.

What Are The Monetization Models Available For Video Streaming Platform Are

Subscription video on demand (SVOD)

SVOD is the most common and widely used pricing model in the industry because it provides continuous revenue to the OTT platform owners. It offers monthly and yearly subscriptions for a fee. Subscribers can access unlimited content on the video streaming website. Globally, there are 955.7 million subscribers to SVOD service in 2021.

Globally, revenue generated by subscription video on demand is $70,845 million in 2021. When a user avails SVOD for their video on-demand account, the platform personalizes content for them based on their interests. This helps in building a relationship with the viewer and increases the loyalty they have for the platform.

Amazon Prime, Netflix, Disney Plus are huge market players who use the SVOD model to generate revenue from their OTT platform.

Ad-based video on demand (AVOD)

If you are starting a video streaming business that is new and needs to gain traction, AVOD is a good business model to implement. In AVOD, the user has free access to all the content on the OTT platform. The video streaming business generates revenue from advertisements. These are ads that the viewers cannot skip.

Businesses generate revenue from this model by receiving payments from the advertisers on their platform. The viewers pay for the platform by consuming the advertisements while watching the video content they prefer. For any business to gain huge revenue from advertisements on their OTT platform, it is important to have a large audience that will attract brands to reach a huge segment of the audience on the platform using paid ads.

YouTube, Pluto TV, Roku, Daily motion are some of the players who use the AVOD pricing model to generate huge revenue. YouTube generated a revenue of $6,005 million in the 1st quarter, $7,002 million in the 2nd quarter, and $7,205 million in the 3rd quarter of 2021 globally from advertising.

Transactional video on demand (TVOD)

In the TVOD video streaming business model, the video streaming business generates revenue by renting or selling individual videos to its customers. There are two types – electronic sell-through (EST) and download to rent (DTR). In EST, the user pays one time to gain permanent access to the view. In DTR, the viewer rents the video for a specific period.

The trade secret of generating revenue using the TVOD model is to consistently provide high-quality video content to the audience. This will not only increase the reach of the audience globally and attract more viewers, but it will also retain existing audiences. Since revenues are not consistent in the TVOD model, OTT businesses usually use these along with SVOD or AVOD pricing models.

Premium video on demand (PVOD)

Production houses began releasing movies on OTT platforms since the Covid-19 lockdowns. OTT users could pay a fee to gain prior access to the video content (before its launch for the audience on other subscription models). It is a huge hit in the video streaming industry.

This could be movie premieres, movie releases, TV series, shows, etc. Since the subscriber is gaining early access to the content when compared to subscribers of other pricing models such as SVOD/AVOD, the pricing of PVOD is higher. PVOD has raked in great profits since 2020 globally.

Coupons and promotions

Video streaming services for businesses offer coupons and promotions that the platform can use for marketing. The features in video streaming that the platform provides can be utilized to the fullest to cater to all segments of the audience.

Server-side ad insertion (SSAI)

Inserting ads in high-quality and long-form video content can be done in the on-demand video content and live video content. SSAI can be utilized to target every individual viewer.

Third-party ad integration

Third-party ad integration has made it easy for video streaming platform providers to work with advertisers throughout the world. This is helpful for both new and established video streaming solutions.

Final word

Using video streaming helps a company that is involved in any form of entertainment improve their business. Entertainment companies that broadcast content on television channels and release films can have their own video streaming platforms.

For those who would like to get into this business: