If you follow viewing trends and the consumption of streaming video, you won't be surprised by the results of a study recently released by Applicaster. The State of OTT Revenue for 2021 respondents include broadcasters (52%), D2C video brands (27%), multi-channel aggregators (20%) and video game developers (1%). The United States is represented by 75% of the sample. The report explores business models, monetization plans and future strategies to aid understanding OTT revenue in 2021.
It’s apparent that cord cutting and COVID-19-related lockdowns have made streaming more popular than ever. Researchandmarkets predicts an 11.2% CAGR for OTT in the U.S. by 2025. The proliferation of smart TVs and smartphones, the growing demand for VOD content, and a high rate of per-user payment are some of the major factors driving the country's OTT market.
According to streamingmedia.com, the major ad-supported streaming platforms (Roku, Hulu, Peacock, Pluto TV, and Tubi) showed a 31% year-over-year increase to reach $849 million in Q2 2020. That was only the beginning, and it shows no signs of slowing! The study only confirms our suspicions and broadens our understanding OTT revenue in 2021.
Understanding OTT revenue in 2021
Plans for growth
Smart TVs (+45%) and connected “box/stick” devices (+35%) have shown the highest growth rate year-to-year. 18% of respondents expect their audience to grow more than 75%. This is driven by their expansion to new platforms as well as launching of additional apps. More than half of the respondents expect their reach to increase by up to 50%.
Mobile fill rates (70%) exceed those of TV (56%). 66% of platforms use an advertising model (AVOD) as part of a monetization mix. Direct ad revenue driven by in-house sales teams are preferred by nearly half (49%) over programmatic advertising (20%). 40% say local advertising is growing faster than national accounts. Streaming platforms also sell product placement and sponsorships to drive additional revenue.
Revenue models and their trends
Respondents in the study shared 19 different revenue model combinations! 75% rely on multiple revenue streams while 67% of respondents use advertising to fund their apps. Around 27% that count on a AVOD+SVOD hybrid model, look for AVOD to grow in 2021. Only 13% solely rely on advertising to monetize their content. Be aware that 54% plan on changing their monetization model in the next 6 months.
App store revenue sharing is distasteful, yet 46% currently share a 30% slice of the pie with these channels. 23% are seeking a workaround and 20% offer access only from their website.
OTT revenue in 2021 will likely evolve to a multi-platform app strategy. Mobile will be a crucial device in the platform mix, followed by smart TV and a neck-and-neck race between box/stick and gaming consoles. Growing market share is a key goal. 66% of respondents plan to grow by adding new platforms, and 55% plan to launch more apps on the platforms they already use. 33% hope to use both tactics to grow share. It is ever more apparent that a mobile-only strategy won’t cut it. Viewers use multiple platforms and devices, and brands that seek to monetize this tide of growth must be everywhere their viewers are. Expanding to new platforms is the easiest way to add new viewers in bulk, which will increase ad revenue and/or subscriptions.
To help your clients reach the OTT audience, check out the AudienceSCAN profiles on AdMall by SalesFuel.
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