Why Use Pay-Per-View in Your VOD Strategy?

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So you’ve hunkered down on social video and video marketing, and may have even put on a live stream or two. What next?

Many businesses and organizations rely on video to deliver, distribute, and/or market their content. A sizable percentage of these organizations hope that said videos will attract consistent viewership, and with that, advertising revenue. With banner and pre/mid/post roll ads, the monetization options are endless. With that in mind, pay-per-view isn’t generally the first in line. But PPV has come a long way from the old days of watching B-list movies and boxing matches on cable TV. Millions of people are tuning into PPV events, both live and on-demand. Many of these viewers even end up attending future events of the same caliber in person. The pay-per-view model works.

But the first P in PPV is, of course, pay. You may think that such a straightforward price tag can potentially turn off a few viewers who aren’t diehards or generally dedicated to the content, but watching something with the feeling of being there in real time in addition to great audio/video quality is likely to sway them. This sense of real time connection with the video content can be, and has been, capitalized on: think college football and graduations. Simply put, dependent on your audience size, it’s guaranteed revenue (whereas ad revenue can be a gamble).

It’s an important if not obvious aspect to keep in mind that the function of your content is a big indicator of whether or not PPV should be a part of your online video strategy. You would probably be sending the wrong message by charging for Sunday church service like you would charge for McGregor vs Mayweather–the higher powers might not be too pleased with that. But with all other video content that’s marketable and in demand, it’s likely that you can find success with PPV. We’re already running at hyper-speed towards a cordless but always connected world. People have been spending more time in front of laptop screens instead of TV and consequently spending more on a-la-mode subscription and PPV services.

According to Statista:

  • The global VOD market was about $16.3 billion in 2016
  • Accounting for 16% of the digital media market, VOD is significantly larger than digital music and on a similar level with ePublishing
  • In 2017, revenue for PPV in the TVoD segment amounts to about $3.4 million
  • The top country for PPV generated revenue is the US ($1.9 million in 2017), followed by the UK, Germany, China, and Japan
  • In Europe, the PPV market is growing with an average of 5.7% per year
  • The video market globally is growing at a compound annual growth rate of 8.3% to 2021
  • By 2021, around 77 million people will be PPV (TVoD) users
  •  Revenue is expected to show an annual growth rate (CAGR 2017-2021) of 4.5% resulting in a market volume of $4 million in 2021
  •  User penetration is at 5.8% in 2017 and is expected to hit 7.2% in 2021

The most successful organizations using video platforms always include pay-per-view options for good reason. It wraps premium video content into a neat little box. It gives you insight into what’s on demand and the freedom to monetize without all the clutter. Your audience receives exactly what they want without having to shell out for extras. Ultimately, you have to ask yourself whether you are providing an experience that people are willing to pay for, and if that experience is up to par.

 

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