The Road to NAB - Chapter 3: Four revenue models for your own online video platform
Kenneth Stamp is a storyteller at TradeCast.tv, the Dutch startup that’s disrupting publishing and television with an all-in-one platform for starting your own online TV channel and content platform. Leading up to NAB 2017, the world’s biggest broadcasting trade show where TradeCast.tv is selected as one of thirty leading TV startups, Kenneth shares his vision on the radically changing worldwide television landscape. This is the third of six chapters:
The Road to NAB 2017 - Chapter 3
Four revenue models for your own online video platform
It’s not without reason that more and more brands, sports clubs and celebrities choose to start their own online video platform to publish their content on. In a time where watching video online is becoming increasingly popular, starting your own content platform is by far the best way to react to that change in viewer behavior. But a content platform where you - and not YouTube or Facebook - are in control, is also a source of new revenue. How do you earn money with your own online video platform? Well, for example in these four ways!
A successful online video doesn’t necessarily mean ‘money in the bank’. It takes a whole lot more than a creative idea for a video on a big social media website to become a source of income. But how do you establish a strong business model around your online video content? Starting your own online content platform offers a lot of opportunities to establish new revenue models. From branded content to AVOD and from sponsored live events to e-commerce: there are countless ways to make money with your own online TV channel. But before you can start earning from your content, a solid business strategy is an absolute must. That’s why I’ll list four revenue models that you can use to create revenue with your own content platform.
Revenue model #1: SVOD, TVOD and AVOD
Allright, these are actually three revenue models. The abbreviations SVOD, TVOD and AVOD stand for Subscription Video on Demand, Transactional Video on Demand and Advertising Video on Demand. I’ll walk you through them one by one: SVOD is a revenue model used by content platforms like Hulu and Netflix. Users of these platforms sign an agreement to use that content platform limitlessly for a set period of time, in exchange for a monthly fee. After payment, users can (mostly) watch the content on the platform where and whenever they want. A reason to use an SVOD service is the exclusive content that specific platform offers. The SVOD model is ideal if you have a vast content library with lots of different types of video content and you want to service and bind your audience for the long haul.
TVOD (also known as ‘Pay Per View’) can best be compared with how you used to rent or buy video tapes. You pay a set fee and after that the video is yours (for a set amount of time or forever). But just that one video and not the entire video collection that the store or platform offers. Examples of platforms that use the TVOD/Pay Per View model are iTunes, Google Play, and educational course website Udemy. Pay Per View is also used a lot for live events: viewers interested in the live event can pay a set fee to watch an exclusive stream of their favorite sport or contest. For years, this is the go-to (and proven) business model for the WWE in the United States.
Then there is AVOD: with this revenue model - which is one of the most used online - you give your video content away for free but you earn money by showing adds from advertisers at the start, middle and/or end of your content. With the AVOD model, viewers don’t pay you with their credit cards, but rather with their eyeballs. And looking at the change in viewer behavior (more and more people are watching video content online, in stead of on their TV’s), online video ads are becoming more and more important. This means that advertisers are also willing to pay more money to show their commercials on your on-demand platform. The best example of the success of this business model is YouTube, where you as a viewer can stream (mostly) all content for free, but have to watch a commercial every now and then. The advertiser decides if these commercials can be (partially) skipped and usually offers shorter versions of its television commercials for use on VOD-platforms. All to service that increasing number of mobile video watchers with relevant ads.
Revenue model #2: sponsored/branded content
The effects of a sponsored article or advertorial are well known and those effects also translate to video, in the form of branded content. An example of this is when a content creator collaborates with a brand or company to make a video item about a certain product. Nowadays, big brands and companies like to work with online influencers, internet celebrities with a huge audience. An influencer in the field of body care products can be approached by a make-up brand to make a video item in which he or she tells why they’re such a fan of that specific eye liner. An advertiser doesn’t pay you for an add, but for a content item on your platform that appears in between your other content. That branded content item targets the exact audience the brand wants to reach. Sponsored content works, as long as it abides by three rules, according to the experts of Edelman Berland: relevance, authority and authenticity.
Revenue model #3: live events
Also an ideal revenue model for online video platforms: the broadcasting of live events. If the content platform you’re using allows for it, broadcasting a live event is a great way to reach a huge audience with content they can’t see anywhere else. Also, it’s ideal for targeting your viewers with ads, where you reap the benefits from. Like I said, the WWE is a market leader when it comes to broadcasting live events. In fact, the WWE shows in its financial overview of the fourth quarter of 2016 that they’ve earned over 38 million dollars by broadcasting live wrestling matches. And that’s seventeen percent more than they earned the year before. Yes, live broadcasts cost money (camera’s, lights, people on the floor, bandwidth, etc.), but you can make all that worthwhile by for instance selling the recording afterwards, by making it a pay-to-watch event (there’s that Pay Per View again) or by approaching sponsors that want to connect their name to your event.
Revenue model #4: interactive videos
Another technological marvel that makes it possible to earn money with your content is interactivity in e-commerce. Certain video platforms, including the TradeCast platform, make it possible to add interactive layers to your content and add e-commerce links (which is smart!). That way, a viewer can watch an item about a certain product and immediately buy the product discussed in the video. This ‘watch and buy’ technology is a rather new development, but a great way to upgrade your videos and make it easier for viewers to commit to buying the products your selling.
The shift in viewer behavior makes publishing video’s online more and more interesting and revenue models based on online video more lucrative by the day. In the end, distributing content on your own platform all revolves around gathering data from your viewers. More on that can be read in the next article in this series. In the fifth and final article in this series I’ll state the ways you as a video platform owner can interact with your audience to better bind them to your brand. More to come, so stay tuned!
If you want to learn more about the opportunities your own video platform and targeted advertising can bring your company, contact TradeCast, check out our video below or meet TradeCast at NAB 2017: we’re part of the Sprockit HUB (North Hall, booth N2732) from April 22nd to 27th.
tel: +31 85 201 09 80