5 Key Research Insights from the OTT Content Monetization Report

BlogDec 13, 2022

The research paper Optimizing Video: Enhancing Content Performance for OTT Success, from Parks Associates and SymphonyAI Media, provides critical insight into the content monetization trends shaping the future of the OTT streaming market.

In this briefing, we offer content sellers and streaming platforms an inside look at key takeaways and the latest OTT video trends. For more on data-driven approaches to content performance measurement and optimization, access a complimentary copy of the full report here.

 

Top 5 Insights from Optimizing Video: Enhancing Content Performance for OTT Success

 

1) SVOD content investment continues as market matures

The Optimizing Video report offers compelling evidence that the SVOD business model has reached or is near reaching peak maturity levels in the United States. That evidence includes the high SVOD penetration rate of 87% for US internet households, Netflix’s addition of an AVOD tier, and steady subscriber growth for new services while growth at leading SVOD platforms leveled off in 2022.

But despite seemingly slow subscriber growth, large SVOD platforms are continuing to compete for viewership with massive investments in new content. The report highlights some of the staggering content budgets announced by leading SVODs in 2022: a $33 billion investment from Disney, $18 billion in content spending from Warner Bros. Discovery, $17.5 billion from Netflix, and more than $6.5 billion in content spending for Apple TV+.

Industry analysts are projecting that the constant growth we’ve seen in content investments may start to slow down in the coming months, but there’s no indication that investments will actually decline in the near future. Ongoing content investments by SVODs of all sizes create a positive outlook for content sellers hoping to monetize their assets on SVOD video streaming platforms.

 

2) Unique content is top driver of ad-based services

The Optimizing Video report talks about the growing adoption of ad-based video streaming services like AVOD and FAST, with OTT video advertising projected to generate $119 billion in 2023.

The rise of combined AVOD/FAST services like Tubi, Crackle Plus, VIZIO, and The Roku Channel is creating new opportunities for content sellers to monetize video assets by creating their own FAST channels and even distributing them across multiple platforms.

With inflation on the rise and fears of economic recession looming, it was no surprise that over half of viewers said they were driven to adopt ad-based services because they were free. But an even greater proportion – 65% of survey respondents – said they were driven to use ad-based OTT video services by the availability of unique and desirable content.

Top AVOD Drivers

 

3) New OTT business models are continuing to emerge

The Optimizing Video report explains how new OTT business models are emerging to provide audiences with more choice and help established platforms extend their total addressable market (TAM).

As the OTT video streaming market continues to grow, both established and fledgling streaming services are experimenting with hybrid monetization strategies that combine subscription, advertising, and transactional monetization. Hybrid monetization gives viewers more options for how to consume the service while extending a platform’s TAM, maximizing average revenue per user (ARPU), and off-setting slowdowns in subscriber growth.

Another shift noted in the white paper is the rise of OTT aggregation services like Amazon Channels that will allow audiences to access full content libraries from multiple OTT video streaming services on the same platform.

 

4) Content partnerships are evolving

The Optimizing Video report explains in detail how content partnerships, including licensing and distribution deals between content sellers and OTT platforms, are evolving to suit the changing landscape of OTT distribution.

Fixed, multi-year contracts with established SVODs based on minimum guarantees and predictable revenue sharing still exist, but the proliferation of FAST and AVOD platforms is leading to more diverse, experimental, and short-term licensing agreements.

These agreements give content sellers more flexibility to test the performance of their video assets on different platforms and in front of new audiences, but content sellers will need modern data analytics capabilities to efficiently normalize and compare content performance data across multiple distribution channels.

The report also discusses the emergence of new content partnerships that didn’t exist before: sports leagues making deals with OTT streaming services, major studios releasing movies direct-to-streaming, and connected TV manufacturers making deals with FAST service providers and social media platforms.

 

5) Tech is driving efficiencies in OTT content monetization

Data-driven technologies are a key driver of content monetization efficiency for media businesses, according to the Optimizing Video report.

Content sellers licensing their video assets to multiple distributors face significant challenges when it comes to measuring content and distributor performance. That’s because the data they receive from distributors comes in a non-standard format, and the process of aggregating, normalizing, and analyzing the data is both time-consuming and costly.

But with the right technology and software tools, content sellers can capture a complete picture of asset performance by aggregating, normalizing, and analyzing content, distributor, revenue, and advertising data from multiple distributors into a single platform.

Modern data analytics platforms like Revedia Digital are empowering media companies to make smarter and faster content investment and distribution strategy decisions that maximize OTT revenue.

 

Ready for the full report?

Ready for all the insights? Check out the full report from Parks Associates for even more insights on OTT video monetization, including:

  • Impact of FAST on the competitive landscape
  • Trends in subscriber behavior the streaming industry
  • Strategies that optimize content portfolio value
  • Advice on managing and analyzing complex data sets