Online streaming services like YouTube, Netflix, and Hulu have fundamentally changed the way we watch TV shows and videos. This proved particularly correct in 2020 when Video on Demand services were tagged as one of most daring success stories of the year. In fact, Digital TV Research predicted that subscriptions in online video providing platforms across 13 Arab countries would reach 12.27 million by 2025 tripling from 4.13 million in 2019.
The rapid shift toward VOD is radically changing the way content is consumed, but also how it is sold. Hence, determining the right monetization model of your platform is one of the most critical questions. Should one adopt an AVOD model where users can watch for free but the content is intercepted with advertisements as a revenue stream, or SVOD where users must pay a recurring fee to watch the content?
Salloum El Dahdaah, Chief Technical Officer at ITWorksME, answered this question during a panel at the MENA OTT and Anti-Piracy Webinar hosted by BroadcastPro and held between November 3 and November 5, 2020: “It all depends on content type and strategy. Content is the compass that will lead you to the definite answer,” he said.
“SVOD allows consumers to access an entire catalog of content with an ensured image quality and continuous content additions. If you offer long premium formats such as series, documentaries, big productions or exclusive sports events you have to rely on OTT and SVOD. This type of content is costly and needs a strong sustainable technical infrastructure to be consistently available to end users,” he added.
“Our fellow panelists Peter Ritz, OSN CTO and Nauman Qureshi, StarzPlay CP of product come from that background,” he said. “They are aware of the production cost and the pivot role this cost plays in their decision-making. Such platforms need a sustainable system. They cannot take risks in offering content following an AVOD model. Premium content providers are confident consumers will pay for their content without disruptions.”
“However, if the bulk of your content is short videos, UGC, vlogs, tutorials, sports gigs, news segments… I consider AVOD to be the model of choice for you,” Salloum suggested. “Therefore, with lack of budget and sustainable content supply I advise you opt for an AVOD model that fits you. The primary goal of each of AVOD or SVOD is to generate revenue from streaming content.”
“In my opinion, the choice of the model and its features will not matter ultimately if your content is not driving your choice.”
ElDahdaah added that at KWIKmotion, we take an open and flexible technology approach balancing scalability, cost and quality of service. KWIKmotion operates following a hybrid approach by implementing a combination of revenue models following the needs and requirements of our customers.