Leveraging Ad-Supported Models for OTT Growth

When streaming first came out, it came with no ads and was a huge change to traditional broadcast television. People were willing to pay a fee for the streaming service, and this model worked for a while until broadcast television largely died and streaming services became more competitive and more expensive. Now, many viewers want an option for free or low-cost content access, and the best way for that to happen is to go back to the broadcast television model. In other words, pay for the viewing experience through ads that interrupt it.

These ads can pay for the viewing experience entirely, so that there's no fee at all for the streaming service, or they can partially pay for it. Many OTT distributors have tiered pricing plans, with the highest tiers offering an ad-free experience and the lower tiers offering different levels of ads depending on the tier. This kind of flexibility appeals to viewers because some don't mind ads and want to save money, while others prefer uninterrupted viewing and are willing to pay for it. These models work for you because advertisers pay to reach the platform's audience. The more viewers a platform has, the more it can charge for ads.

Not everyone can afford a monthly subscription, and not everyone wants to pay that subscription even if they could technically afford it. By offering free or cheaper access, platforms can reach a larger audience and offer more flexibility. Tubi is a great example here. Tubi has grown rapidly by providing free, ad-supported content and attracted millions who might not subscribe to a premium service.

Another benefit is increased user engagement. When content is free or low-cost, people are more likely to try out the platform in the first place and spend time exploring it. This typically means longer viewing sessions, which means more ads can be shown. Platforms can also use the data they gather from these viewers to personalize ads and make them more effective for advertisers. When you can demonstrate that ads are effective on your site, you can charge more for them and attract more advertisers.

To succeed with ad-supported models, focus on the user experience first. This means limiting ad frequency and ensuring your ads are as relevant and non-intrusive as possible. If you throw totally irrelevant ads in, or too many of them, you're likely to lose viewers. If you start out with limited, skippable, short ads, you'll be able to move to longer ones once you build viewer loyalty.

The other important strategy is working with the right platform, and that's where we come in. Contact us at Lightcast.com today and see how our all-in-one OTT platform can supercharge your growth.