OTT subscription revenues may not be enough. Welcome to ad-supported content.
It's no secret that subscription revenues from over-the-top (OTT) content providers have lagged behind. In fact, a recent report shows that only 29% of consumers are willing to pay for an OTT service.
This leaves providers with a difficult decision to make: continue to rely on subscription revenue or return to the ad-supported model?
The advertising model has its advantages. First, it is a more familiar model for consumers. They are used to seeing ads on TV and other platforms, so it is not a big change for them. Second, it's a more sustainable model for suppliers. In the long run, it is more likely that providers will be able to generate more revenue from ads than from subscriptions.
However, the advertising-based model has some drawbacks. First, it requires a larger upfront investment to build the infrastructure to serve the ads. Second, it can be annoying to viewers who are used to an ad-free experience. Third, it may not be as profitable in the short term as subscription revenue.
Ultimately, the decision to return to an ad-supported model will depend on the individual circumstances of each provider. If they are having difficulty generating sufficient subscription revenue, it may be worth considering. However, they should carefully weigh the pros and cons before making a final decision.
