OTT Monetization: A Practical Guide

In 2024, 50% of viewers already spent most of their time on streaming platforms  (TGI Consumer Data 2024, Kantar)

The rapid growth of the streaming market makes it increasingly attractive to content owners.

However, profitability depends not only on the commercial value of the content but also on the right monetization strategy. Regularly revisiting that strategy helps scale revenues.

We’ve compiled a list of effective criteria for OTT monetization.

If you are currently at the content ownership stage, our VOD Portal service will help you quickly launch a VOD library with high-quality streaming and built-in analytics for stable revenue generation.

Content Type

Exclusive content with long-term value is best monetized via subscriptions (SVOD).

Netflix, for example, focuses on premium content that justifies subscription fees. The company allocates nearly half its annual revenue to content production (USD 18 billion in 2024, or around 46% of its yearly income).

Time-sensitive content - such as premieres, major sports events, or concerts - is best monetized via transaction-based models (TVOD), offering purchase or rental options.

In 2024, we saw a significant shift of major sports and cultural events to streaming platforms. Amazon Prime Video secured multi-year deals with the NFL, while HBO Max and Disney+ are exploring live broadcasts of basketball and football championships. These will be available via subscriptions or one-time payments, depending on the urgency of access.

Short-lived content with broad audience appeal is typically monetized through ads (AVOD, FAST). Free ad-supported channels also serve as effective marketing tools.

This type-based monetization approach is a fundamental rule for successful streaming platforms. Although the industry changes, the last ones have stuck to this principle for years while diversifying their revenue streams.

Target Audience

User age, purchasing power, and content consumption habits significantly impact monetization model selection.

Subscription (SVOD) and transaction-based models (TVOD) work well with users who are willing to pay for quality content.

Netflix, a subscription-only platform since its inception, remains a market leader. In 2023, it reported nearly USD 40 billion in revenue and 301.6 million subscribers, exceeding Wall Street forecasts.

Meanwhile, Netflix has introduced cheaper ad-supported plans. Disney+ and HBO Max followed the same path to engage audiences unwilling to pay full price.

Ad-supported models (AVOD and FAST) serve heavy content consumers who are not ready to pay for it - often due to habit, not just affordability. In 2023, around 30% of European households watched only free-to-air TV (Future of TV Distribution 2024, DCMS, UK). In France alone, 62% still rely on it.

Audiences accustomed to linear TV with scheduled programming and ad breaks are naturally more receptive to FAST formats. Platforms like Pluto TV, Samsung TV Plus, and Rakuten TV continue expanding in such regions.

Viewers who value flexibility - such as the ability to pause, rewind, and choose from a wider catalog - tend to prefer AVOD if it’s free. This is reflected in YouTube’s massive Europe penetration (70,4-89,3%, depending on the country).

Market Landscape and Competition

OTT market density and regional characteristics also influence monetization strategy.

In oversaturated subscription markets like the U.S., cheaper ad-supported plans may offer better results. 

If competitors rely only on subscriptions, offering your premium content via TVOD can help you stand out. 

Introducing free or lower-cost access tiers can also help attract and retain users while generating additional ad revenue.

AVOD and FAST models work better in regions with low purchasing power, as users can’t afford multiple subscriptions.

Revenue Sources

SVOD ensures stable recurring revenue but requires significant investment in content production.

In recent years, subscription services have responded to ad growth - ads now make up about 60.4% of the OTT market value - by offering ad-supported tiers. Hulu reported that 63% of its users access content through this model.

TVOD generates high per-view income, but it’s hard to convince users to pay for each piece of content. We found no major platform that relies solely on TVOD. Instead, it's often used alongside subscriptions.

AVOD can quickly generate mass-audience revenue, but its success depends on the advertisers' interest. That’s why leading OTT players diversify revenue sources. YouTube, for example, has offered TVOD options since 2010 and ad-free subscriptions since 2016.

Free linear channels with ads help generate additional income from older content. Major OTT services also use FAST channels to drive traffic to their paid offerings - highlighting key episodes or seasons.

Platform Flexibility

A flexible approach to monetization allows platforms to expand their audience reach by adapting to content consumption behavior and local market conditions.

For example:

• Amazon Prime Video provides access to its own catalog and external platforms like HBO and Starz through different subscription options, plus the ability to rent or purchase individual titles.
• Peacock (NBCUniversal) allows ad-supported free viewing or an upgraded ad-free experience.
• MEGOGO, the largest media platform in Ukraine, also offers flexible monetization through ads, subscriptions, or content-specific payments.

These cases illustrate the increasing trend toward hybrid monetization. However, this approach is resource-intensive because it must support payment and ad tools simultaneously, as well as various content types and users segments.

That’s why gradual expansion across monetization models is often the most effective path.

Conclusion

Choosing a monetization model depends on your platform strategy, content type, audience profile, and market conditions.

Still, the most successful cases demonstrate the power of a hybrid strategy implemented step by step.

No matter what monetization path you choose, the VOD Portal service will be your reliable technical foundation - enabling quick content library creation and high-quality, on-demand streaming for millions of viewers via your website and app, supported by broadcast analytics and control tools.

Sources

https://assets.publishing.service.gov.uk/media/672cafe262831268b0b1a2f4/Future_of_TV_Distribution_FINAL__7_Nov_2024_-accessible.pdf

https://www.antenna.live/insights/a-closer-look-at-the-growth-in-ad-supported-streaming

https://www.broadbandtvnews.com/2024/01/31/62-of-french-households-use-dtt/

https://www.statista.com/statistics/1219589/youtube-penetration-worldwide-by-country/