While Bullish on OTT, Execs Shift Strategies

Applicaster Zapp
(Image credit: Applicaster)

NEW YORK—Media executives are not only bullish on the streaming business, nearly half say they are budgeting for growth to exceed 50% this quarter, according to a new survey from Applicaster.

Overall, 84% are planning for streaming growth to continue in 2021 and a surprising three-quarters of the respondents say they will change or are considering a change to their monetization model this year. 

Applicaster’s “The State of OTT Revenue 2021” also found that the shift to new, often more complex business models, is being driven by the expansion of the increasingly competitive streaming industry, with audiences expecting customized experiences from streaming platforms, both in terms of viewing and pricing.  

“The study clearly shows top media executives are diversifying streaming and revenue models amidst this tsunami of digital content demand,” said Ido Hadari, CEO of Applicaster, which works with broadcasters, content publishers and OTT providers to drive their digital strategy, engage with audiences, and monetize media assets. “Covid-19 changed how we consume media, and brands are getting increasingly creative in mixing and matching different revenue models to be able to serve the expanding number of cord-cutters, cord-nevers and cord-shavers.”  

As OTT brands move from single to hybrid revenue models, advertising remains the most prevalent revenue model, currently used by two-thirds of respondents. 

But the study found that 54% of OTT brands plan to change their business models in 2021 to appeal to a wider range of viewers, with an additional 22 % considering a change in their business strategies. Two-thirds of OTT brands are now transitioning to a hybrid monetization approach—only one-third are employing a single model. 

Illustrating the growing complexity of the streaming business, the study found that 19 different combinations of revenue tools are currently utilized across platforms.

Brands also plan to expand their streaming efforts, with 66% of respondents planning to launch apps on more platforms, 57% ramping up to create more content for their apps, 55% expecting to launch more properties and apps on existing platforms and 49% preparing to license more content for their apps

“It’s not enough to keep pace by making changes in their app offerings, they need to continuously adapt their business models as well,” said Devra Prywes, CMO and CPO of Applicaster. “It’s clearly important for these businesses to create a matrix of options and experiment with offering low-priced, or free, options to be accessible to an even greater audience, especially price-conscious ones.” 

The survey was based on insights from 95 streaming executive decision-makers in broadcasting, direct-to-consumer video brands and multichannel aggregators.

The full report is available on Applicaster’s website (opens in new tab).

George Winslow

George Winslow is the senior content producer for TV Tech. He has written about the television, media and technology industries for nearly 30 years for such publications as Broadcasting & Cable, Multichannel News and TV Tech. Over the years, he has edited a number of magazines, including Multichannel News International and World Screen, and moderated panels at such major industry events as NAB and MIP TV. He has published two books and dozens of encyclopedia articles on such subjects as the media, New York City history and economics.