In present times, people usually prefer to stream videos online, instead of going for the traditional modes of video consumption. Be it for entertainment, education, or any other activities, you simply cannot deny the emergence and relevance of online streaming platforms. And this shift has come with its own challenges for content creators. The most prominent among those challenges has to be how to monetize the digitally published video content.
Whether you are just starting out as a creator or you are already an experienced professional, understanding the ins and outs of these monetization challenges and ways to cope with them can help you earn better revenues from your video streaming business. In this guide, we will explore the key challenges that make monetizing your content tricky and look for the most appropriate ways to overcome these challenges.
So, let’s get started!
Most Common Streaming Content Monetization Challenges
Generating revenue from streaming content is not easy. For example, if you are using an ad-based revenue model, you must beware of the ad-blockers. These ad-blocking technologies and attempted ad frauds can significantly reduce your revenue from ads. Whereas ineffective ad placement strategies complicate the process of delivering relevant ads to your audience.
Similarly, for the subscription-based model, Content Piracy and Subscriber Churn are two of the biggest challenges to conquer. Piracy takes away potential earnings, and subscriber churn keeps making it hard to have a stable income.
Let’s now take a deeper look into all these challenges one by one.
1. Ad-Blocking
Recently, there has been significant growth in the use of ad-blocking technology, with millions of individuals worldwide now using ad blockers to shun annoying ads. Since the viewers get rid of ads, they obviously like the experience, and hence get motivated to use it for longer.
However, such tendencies pose serious challenges for streaming businesses that opt for ad-supported video-on-demand (AVOD) models. The revenue in AVOD solely depends on the number of ads seen by the viewers. The ad blockers reduce the ad views drastically. As a result, the revenues also decrease, so as the advertiser’s preferences for the platform.
2. Ad Delivery Efficiency and Ad Frauds
Placing targeted advertisements to audiences is one of the most significant challenges in ad delivery. Your streaming platform might have viewers from all over the world. Thus many times, the targeting of ads might not be right for every viewer. If there is poor targeting, there will be low engagement rates because people will not take any action on the advertisements they see.
Hence, the ads cannot be just thrown around. The advertisements need to be strategically placed to make the most out of them. For example, when a video ad is skippable, the chances of engaging the audience go down. Furthermore, deciding how the ads will be arranged is also crucial.
Ad fraud is another significant challenge. Scammers can deploy bots or various automated methods for creating fake user engagement, an activity that involves generating clicks or views where no actual human interaction takes place. Hence, companies will spend money on advertising campaigns that people never saw or interacted with.
3. Content Piracy
Content piracy deeply affects the revenue generation strategies of most streaming services. Once the content is leaked on a free platform like YouTube, viewers consume the pirated content with no registration or payment to your platform. This leads to significant loss of revenue.
Moreover, there have been many instances of mass illegal distribution of such content which dilutes the whole purpose of creating premium-priced content in the first place. This also negatively impacts the chances of future revenues from this content via licensing.
4. Higher Cost of Production
The revenue and profitability of streaming services are directly affected by the costs of production and licensing. The audience will always demand premium quality shows and movies with original content. But this type of content will need a lot of resources including human, technical, and financial resources for production.
For example, Game of Thrones had a production cost of 10 million dollars per episode last season. And similar is the case with any premium original content.
But even after spending so much, not all productions of high budget gain success. A show or a film that has not been embraced by the audience may not provide sufficient ROI and will cause losses.
5. Subscriber Churn
Subscriber churn refers to the situation when users decide to cancel or not renew their subscription. And it obviously creates a negative impact on revenue and long-term performance for most, if not all, of the streaming platforms.
Most streaming platforms are subscription based which means they collect regular fees from their subscribers as their main source of revenue. But such income is easily lost due to churn especially when the platforms cannot replace the lost subscribers.
Also, it means the platform has to spend more on customer acquisition in order to get the same or a growing level of revenue, hence increasing customer acquisition costs.
In order to gain subscribers quickly, the platforms even offer huge amounts of discounts and other promotional offers to the customers, which affects their profit margins. It also creates unevenness in the subscriber bases making the forecasting of revenues and budgeting for content quite difficult.
The Solution to OTT Content Monetization Challenges
Features like multi-DRM can drastically reduce content piracy, while advanced Ad-Tech infrastructure can improve the overall ad efficiency and placement. Hybrid Monetization and subscriber engagement programs can help tackle the churn rate, while platforms like allrites help acquire content easily.
Let's take a deeper look at these potential solutions to content monetization challenges one by one.
Advanced Ad-Tech
Technological advancements in Ad-Tech like the SCTE markers, VMAP, and VAST have significantly helped tackle some of the AVOD monetization challenges. SCTE-35 markers make sure that the ads are placed at accurate positions during a live or linear stream so that it does not disturb the viewer’s experience.
The precisely executed Dynamic Ad Insertion can help platforms target ads effectively, optimize inventory, and monetize unused ad slots during playback.
The Video Multiple Ad Playlist (VMAP) protocol combats the issue of inconsistent ad placement and standardizes ad scheduling across libraries. It also works efficiently with any third party ad server.
The Video Ad Serving Template (VAST) takes care of ad interactivity and tracking capabilities. It helps insert clickable overlays and CTAs. When used alongside SCTE and VMAP, VAST can deliver relevant advertisements, increasing viewer retention and engagement rates.
And if you want to create a streaming platform that has all of these capabilities, Muvi One can help you out. Muvi One - the flagship SaaS platform by Muvi - an allrites partner that helps you create a feature-packed streaming platform without coding, in minutes. Powered by VAST, VMAP, and Dynamic Ad Insertion supported by SCTE markers, you can deliver the perfect ad-based streaming experience to your viewers.
Multi-DRM Security
To manage access to video contents, multi-DRM systems such as Google Widevine, Microsoft Playready and Apple FairPlay encrypt video streams using special keys and deliver the decryption keys to authorized devices and individuals only.
This directly prevents unauthorized access to content, therefore keeping the content safe from piracy. The DRM systems also minimize ‘over the counter’ redistribution of content via screen captures or hyperlinks.
Apart from DRM encryption, some advanced content security systems also include static, dynamic, and forensic watermarks. They leave traceable information as watermarks within the content. In case of piracy, the source can be identified using these watermarks.
SaaS platforms like Muvi One offer advanced content security infrastructure including multi-DRM, forensic watermarking, screen capture protection, geo-blocking with VPN detection, and URL Whitelisting. These features help ensure overall content security.
Hybrid Monetization Models
Hybrid monetization approach combines subscriptions, advertisements, and in-app purchases among other revenue models. It is important because not every user would like to spend money on a subscription.
Giving freemium or ad-based content access can gain users who are not ready to pay a high subscription fee, while keeping all the high-paying users intact. Also, giving options to users helps in increasing user retention.
Muvi One supports technology for all types of monetization models, including subscription, ad-supported content, and hybrid monetization, while we at allrites will help you with the content licensing part. Hence, you can create multiple pricing plans and let your users choose the best one for themselves.
Subscriber Engagement
Subscriber engagement programs such as dedicated email campaigns help minimize subscriber churn and increase customer lifetime value.
Emails are sent out to users notifying them about some new features, special promotions, offers, and events, assuring them the service is still valuable. For example, tutorials, tips or user guides contribute to subscriber satisfaction by helping them use the service effectively.
Also, emails with user activity context (i.e. movie recommendations based on user’s viewing history) increases user interaction. Celebrating anniversaries or other achievements, with email tag lines like - ‘1 Year With Us!’ - develops long-term customer relations.
Emails can also help activate inactive users. Emails can be sent out to inactive users with certain offers, such as discounts, exclusive packages or simple reminders of the advantages of being a subscriber.
And if you are using Muvi One, you can easily integrate email marketing tools, making your task even easier.
Easy Content Acquisition
Allrites makes content acquisition extremely easy for you. Hence, you don't need to spend a hefty amount of money or other resources on content production. Thus, ROI from content automatically increases.
To Sum Up
Streaming content monetization involves multiple challenges like content piracy, ad-blocking, and subscriber churn. On top of that, the higher cost of content acquisition makes it hard for your business to become profitable.
However, the combined solutions and expertise of Muvi One and allrites will help you tackle all these challenges effectively. If you want to try Muvi One, you can do it for free for 14 days.
Click here to get started.
About Muvi
Muvi is a SaaS Platform to launch your own streaming service. Muvi is dedicated to providing high-quality streaming experiences for users around the world. Muvi with its multi-faceted products enables media content & owners to effortlessly monetize their video and audio content outside of traditional advertising channels. They accomplish this by providing a self-service white-label platform through which you can build your own Multi-Screen Video and Audio Streaming (Live & On-Demand) platform.
About allrites
Located in Singapore and operating globally, allrites is a premier marketplace for buying and selling film, TV, and sports rights. We provide a vast catalog of Film and TV content, from major studios to independent producers, available in any language and genre. Our innovative licensing models, including allrites Content-as-a-Service, offer flexible and efficient solutions for content monetization and acquisition, accommodating the evolving needs of content buyers and sellers worldwide.
Contact us to learn more about us and our revolutionary CaaS model.
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