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Monetization in digital content ranges from ad-based models like AVOD to sponsored content, with platforms like Hotstar offering freemium access and SVOD models like Netflix focusing on subscriptions, reflecting the diverse strategies in a competitive landscape.
In the realm of digital content, monetization strategies vary widely, from advertising-driven models such as AVOD to innovative approaches like sponsored content and subscription-based services like SVOD. Take, for instance, platforms like Hotstar, which employ a freemium model, offering a blend of free and premium content, while giants like Netflix concentrate solely on subscriptions, providing exclusive content to paying members. These diverse strategies underscore the competitive nature of the industry, each aiming to capture and retain audiences while generating revenue.
The advertisement based (AVOD) model essentially aims at monetising the traffic/impressions on a particular video by showcasing advertisements,which may be in the form of video or text. One of the most viewed video ondemand platforms in India, YouTube, is based on the AVOD model.Bulk of content is available on the internet because of AVOD and has alsobeen adopted by many broadcasters in India owning their in-house bulkcontent. For small content producers, this model is helpful as it helps themrealise the revenue without any investments in the underlying. However, thecost provided with original content, most platforms are leaning towardsAVOD models may not even lead to a breakeven on every video.
To have an effective means of monetisation, content producers are understanding the benefits of sponsored content. It also helps in recovering the content production costs, while advertisers benefit by having the brand message baked into the content, without risk of losing customer attention due to intrusive advertising.
Many OTT platforms offer freemium features to have access to the tour of their luxurious and ‘lot of options’ content. Freemium models are a mix of AVOD and SVOD, in order to foster the customer engagement on a platform through a critical mass of library content and helping our customer to understand the content offered and eventually looking to convert customers to a pay model through original programming. The leading OTT platform, Hotstar, follows the Freemium model, with television dramas and serials largely available for free, while latest movies, Live sports and global series such as Game of Thrones etc. available for a monthly subscription.
Global OTT platforms like Netflix, Amazon Prime Video have SVOD models. These models have seen tremendous success, especially in markets such as the US, where OTT platforms emerged as alternatives to television, rather than the complimentary presence in India. Unlike global markets, India has a robust cable TV landscape, with a wide array of channels available for INR 100 and above, and in some cases, free of cost through the DD FreeDish platform, which makes the SVOD play challenging for operators. However a SVOD play is essential for long-term sustenance of a platform, one which is especially focussed on original content.
