Is OTT Ad-Based or Subscription-Based?

OTT video services like Roku or YouTube allow creators to publish content, reach an audience, and eventually turn a profit thanks to monetization. Platforms want you to make money since they'll get a cut as well. However, how those platforms promote monetization varies. Some prefer an ad-based model where you get paid when viewers see ads on your content. Others focus on subscription-based revenue. Consider the differences between the two and which will work best for your content.

Ads vs. Subscriptions

Ad-based and subscription-based monetization methods are extremely different. Ad-based monetization pays you when viewers see ads connected to your content. Ads can appear at the start of your video, at various points in the middle (similar to commercial breaks on TV), or after your content has finished. Advertisers can also pay you to promote their products and services within your content, either through live reads or product placement.

Subscriptions, on the other hand, promise to remove ads for viewers in exchange for a monthly fee. When subscribers view your content, you get a portion of the revenue they contribute to the platform based on how much of your content they watch. Some platforms even allow you to offer subscriptions for your content alone, which will give you a greater cut of the revenue.

Ad-Based OTT Platforms

Most OTT platforms use ads to support their platform and creators. For example, YouTube is primarily driven by ad revenue. Since ad-based services are free for users to sign up for, they tend to attract a wide audience. OTT services like Roku and Amazon FireTV use an ad-based model.

Ad-based OTT is best for new creators. Without the barrier of having to pay for a subscription, users are more likely to test out the service and find your content. However, you shouldn't ignore subscription-based monetization entirely.

Subscription-Based OTT Platforms

While there are subscription-only platforms like Netflix, most OTT platforms actually use both methods to generate income. For instance, YouTube offers its YouTube Premium service, which will remove all ads on the platform and give creators more revenue when premium users watch their content. Even many ad-based TV channels have a subscription option to remove ads.

Amazon FireTV, while it is entirely ad-based, allows you to subscribe to specific channels. As a creator, you can create a channel on FireTV and leverage both methods to maximize revenue. Once your free ad-based content builds an audience, your fans will be more likely to support you directly through subscriptions.

The Hybrid Approach

The best approach to monetization is to get your content on as many platforms as possible. Exploit all models of monetization for best results. Don't limit yourself and your content to a single platform with a single audience. The more viewers you reach, the more opportunities you'll have to monetize your content.

The easiest way to publish across multiple platforms is to use the Lightcast Media Cloud. Our content delivery network allows you to upload once and publish everywhere. Request a callback from Lightcast or send us an email to learn more.