Commercial model for OTT TV

Models for monetising OTT TV

OTT TV is here but the commercial models will, and need to, continue to evolve. At the moment we have the predictable commerical models for OTT TV; pay per view and/or subscription based. No surprise here but there’s a real opportunity to get creative in our thinking.

First of all there needs be a shift in the current mindset regarding the ‘value’ of content. There’s clear benefits if there was an acceptance that content is too expensive.

1. A lower price would translate to more sales volumes. Of course a lower price means many more sales have to be achieved to off-set this reduction.

2. Low prices make it easier for the consumer to make casual purchases of more content more frequently.

3. A ‘de-valued’ perspective of the content is likley to reduce instances of piracy. Why would you bother fighting to download a bad copy of some content when you can watch it legitimately for the price of a chocolate bar?

This last point leads to the issue of content protection. It seems clear that if content is ‘de-valued’ and piracy decreases then less time, money and effort is required in the ‘bullet proof’ protection of that content. This in itself could be the the catalyst making OTT TV more commercially viable. Also a reduction in protection requirements lower the entry barrier to more players/stakeholders and so create a more competitive marketplace. Conceivably this could even lead to the ‘commoditising’ of content so that it’s as easy to buy as a can of baked beans.

Perhaps one of the limiting factors in that the content owners are keen not to burn any bridges with their incumbent distribution channels selling tghe content to consumers at the prices to which we have become accustomed. I guess the subscription operators would not like it if consumers could access an OTT TV platform and get the same content for half the price!

At some point though one of these content owners will make the jump, slash prices, lower barriers to buy for consumers and barriers to enty for new OTT TV players. And, like most things, when one goes they all go.