What is OTT Monetization? Models, Strategy & All You Need to Know in 2025

Monetizing Over-The-Top (OTT) platforms is no longer just about turning a profit—it’s about staying relevant in a highly competitive entertainment ecosystem. Broadcasters around the world are navigating shifting consumer behaviors, subscription fatigue, and rising operational costs to deliver top-tier streaming experiences. For broadcasters, mastering monetization is imperative to drive revenue, build user loyalty, and carve out a competitive edge. 

In this article, we explore everything you need to know about OTT monetization—what it is, the challenges broadcasters face, and the strategies and models worth adopting to unlock sustainable growth. 

1. What is OTT monetization?
2. Challenges in OTT monetization
3. What are the different OTT monetization models?
4. Subscription-based monetization (SVOD)
5. Advertising-based monetization (AVOD)
6. Transactional-based monetization (TVOD)
7. Hybrid monetization
8. How to measure your OTT monetization performance and metrics
9. How to implement OTT revenue models into practice

What is OTT Monetization? 

OTT monetization refers to the methods and strategies OTT (Over-the-Top) platforms use to generate revenue from their content. OTT platforms deliver video, audio, and other media directly to viewers over the internet, bypassing traditional distribution channels like cable or satellite. Monetization is what keeps these platforms running, enabling them to offer high-quality content and features while delivering value to audiences.

For broadcasters, having an effective OTT monetization strategy is essential for several reasons for revenue generation, enhancing user experience and staying ahead of the competition.

However, building a successful OTT revenue model has its challenges. Below we take a look at the most common issues organizations face when it comes to OTT monetization. 

Challenges in OTT Monetization

1. Market dynamics and competition

The OTT ecosystem is booming with streamers, from global giants like Netflix to niche, regional platforms. But consumers only have so much money and attention to give. According to a July 2023 Hub Entertainment Research study, 35% of consumers believe seven subscription services to be their limit—and most aren’t even there yet. 

Staying ahead of the competition requires innovative OTT monetization strategies that resonate with specific audience needs. 

2. Subscription fatigue

Subscription fatigue has emerged as a significant challenge for OTT monetization, with consumers feeling overwhelmed by the growing number of subscription services vying for their attention and budgets. This trend forces platforms to innovate with flexible pricing, hybrid models, and value-driven content to retain subscribers and stand out in a saturated market.

3. Strategic balance: pricing, quality, and costs

High-quality content is expensive to produce or license, while platforms shoulder heavy infrastructure costs for cloud storage, support teams, and marketing. The key to long-term success lies in smart pricing strategies and well-negotiated licensing deals. Companies must find ways to efficiently monetize content and manage operational expenses without compromising quality, as budget cuts can hurt competitive positioning. The challenge is finding the right OTT monetization mix that balances platform growth with profitability while maintaining enough investment to keep content compelling for subscribers.

4. Balancing affordability and sustainability

Platforms must balance user expectations for affordability and accessibility with the need to sustain their business. Finding the sweet spot between competitive pricing and profitability is critical to maintaining user satisfaction and business viability. 

5. Ad fatigue

Ad-supported models have become a popular way to provide free or low-cost content, but overloading users with ads can drive them away. A balance between ad frequency and relevance is necessary to avoid frustrating viewers.

Overcoming these challenges starts with understanding OTT monetization models and finding the correct mix for your platform.

Overview of OTT monetization models

Over-the-top monetization models play a pivotal role in shaping the success of streaming platforms. By selecting the right mix of strategies, platforms can maximize revenue while delivering value to their audience.

Subscription-based Monetization (SVOD)

SVOD (Subscription Video on Demand) is one of the most widely adopted monetization models in the OTT space, offering users unlimited access to content for a recurring fee. Platforms like Netflix, Hulu, and Disney+ have popularized this model, making it a dominant force in the industry.

According to Cleeng x Omdia research, subscriptions currently account for the highest revenue share for OTT broadcasters. Statista projects that the SVOD market will reach 1.8 billion users by 2029, further cementing its dominance.

Features of the SVOD model

Platforms offering SVOD often include flexible pricing tiers, allowing subscribers to choose plans based on access levels, video quality, or additional features, that cater to diverse audience preferences. Additionally, the recurring nature of SVOD subscriptions provides broadcasters with predictable revenue streams, ensuring steady and reliable income.

Strategies to maximize SVOD revenue and retention

• Free Trials: allow potential subscribers to explore the platform’s content before committing. Engaging them during the trial period can significantly increase conversion rates.
• Promotional offers: use coupons or discounts to enhance the perception of value-for-money, encouraging new sign-ups and renewals.

• Flexible subscriptions: allow subscribers to upgrade or downgrade their subscription packages based on their changing needs and reduce churn.
• Refined subscription offers: use audience behavior insights to adjust pricing and offer personalized discounts, especially to inactive or churn-prone users. 
• Multiple price points for different audience segments and offer discounts for prepaid annual plans. 
• Employ data analytics to create tailored offers that win back inactive users or reward loyal customers.

By combining flexibility, data-driven insights, and audience-centric offers, SVOD platforms can create compelling value for subscribers while ensuring sustainable growth and revenue generation.

Advertising-based Monetization (SVOD)

AVOD (Advertising Video on Demand) platforms are redefining the streaming landscape by offering free, ad-supported content to users while generating revenue through ad impressions, clicks, and views. As consumer preferences shift toward cost-free streaming options, the global AVOD market is experiencing a significant surge in demand. The market is projected to grow at a  CAGR of 6.93% from 2025 to 2029, reaching an estimated revenue of $71.31 billion by 2029. Platforms like YouTube and Peacock exemplify this model’s success. 

Ad insertion conventions for OTT broadcasters

As an OTT broadcaster, ads can be inserted through two primary methods: 

In-Stream Ads

• Ads are embedded within the content (pre-roll, mid-roll, or post-roll).
• This ensures a seamless experience as ads become part of the natural viewing flow.

Programmatic Ads

• Automated, data-driven ads tailored to viewer behavior and preferences.
• These ads optimize placement and relevance, improving engagement rates.

Advantages of AVOD

Since AVOD platforms eliminate subscription fees, they can attract a broader audience, including viewers hesitant to pay for content but willing to tolerate ads. This opens opportunities to engage diverse demographics and grow viewership.

Balancing ad frequency and user experience

To maximize revenue and engagement, targeting and personalization play pivotal roles:

• Targeting: Ads can be tailored based on demographics, behaviors, or context. For instance, streaming sports content may feature sports-related ads to increase relevance.
• Personalization: Tailored ad recommendations enhance user experience by aligning with individual preferences, leading to better engagement.

However, what’s critical is that you balance the ad frequency and user experience. Inserting too many ads or keeping disruptive placements can lead to user dissatisfaction and churn. On the contrary, too few could pose a problem in covering costs. Thus, getting this balance right can be tricky. The solution lies in leveraging data analytics to gain insights into viewer behavior. By analyzing audience preferences, broadcasters can create targeted ad campaigns, optimize placements, and achieve sustainable revenue growth without compromising the quality of user experience.

Transactional-based Monetization (TVOD)

TVOD (Transactional Video on Demand) offers a flexible, pay-per-view model where customers pay only for the content they choose to watch. This model allows viewers to rent or purchase specific titles without the need for recurring subscriptions, making it ideal for premium or new-release content.

Examples of TVOD platforms include Apple’s iTunes and Amazon Prime Rentals, where users can pay for individual viewing rights, typically for a limited duration.

Key advantages of TVOD

• Flexibility for Viewers: Consumers can access only the content they want without committing to a subscription.
• Monetizing Premium Content: New releases or exclusive content unavailable on subscription-based platforms can generate significant revenue.

Boosting TVOD revenue

Boosting TVOD revenue is possible by employing several tactics, such as:

• Compelling content presentation: use eye-catching thumbnails and detailed descriptions to highlight the value of your offerings.
• Free previews and trailers: excite users with sneak peeks to encourage purchases.
• Personalized recommendations: suggest content based on user preferences to increase conversions.
• Promotions and discounts: offer time-limited deals to incentivize purchases.
• Excellent customer support: quickly address user inquiries to ensure satisfaction. For example, Cleeng's Hi5 tool is designed to do just that, offering AI-powered assistance for immediate responses to common questions and issues. If more complex support is needed, Hi5 seamlessly escalates the inquiry to real agents, ensuring a smooth and personalized experience. 

Transparency and user experience

In order to succeed in the TVOD sphere, you must ensure transparency in your pricing structure.

This includes clarifying all information for transactional content, including rental or purchase costs, access duration, and associated fees. Streamlining the checkout experience for utmost ease and integrating popular payment gateways is also crucial to monetizing with this model effectively.

Hybrid Monetization

In the competitive OTT landscape, hybrid monetization has emerged as a powerful strategy, combining elements of SVOD, AVOD, and TVOD to meet the diverse preferences of modern consumers. By offering a mix of free and paid content, this model enables platforms to attract a broader audience while creating opportunities for additional revenue streams.

How hybrid monetization works

1. Free and Paid Content: Users can access basic content for free (AVOD) while premium features or exclusive content are locked behind a subscription (SVOD) or available for one-time purchase (TVOD).

• Dual Revenue Streams: While advertisements generate steady income from free users, subscription or transactional options drive additional revenue from those willing to pay for premium experiences.

Advantages of the hybrid model

Hybrid monetization offers broader appeal by attracting both cost-sensitive users who prefer ad-supported content and premium customers seeking ad-free or exclusive experiences. This model enables platforms to cater to a wide range of preferences, making it easier to engage diverse audience segments. Additionally, it creates enhanced revenue opportunities by combining income from ads, subscriptions, and pay-per-view purchases, ensuring multiple streams of revenue.

Another key advantage is its ability to drive user conversion. By offering free content, platforms can entice AVOD users to upgrade to SVOD subscriptions, using the free content as a gateway to premium offerings. This strategy not only maximizes revenue but also helps build a loyal customer base over time.

Example strategies for hybrid monetization

• Freemium Approach: Offer an ad-supported free tier with limited content while encouraging upgrades to a subscription tier with ad-free viewing and exclusive features.
• Targeted Upselling: Use data analytics to identify highly engaged AVOD users and present tailored subscription offers.
• Content Exclusivity: Highlight premium content or early access to new releases to incentivize SVOD or TVOD purchases.
• Dynamic Ad Integration: Continue earning revenue from AVOD users while introducing non-intrusive ads to premium viewers at reduced frequencies.

Conversion tactics for hybrid success

• Offer free trials of premium subscriptions to AVOD users.
• Use data insights to craft personalized campaigns targeting frequent viewers with upgrade incentives.
• Provide seamless user experiences with transparent pricing and convenient payment options.

How to measure your OTT monetization performance

OTT monetization is ultimately about maximizing ROI, and the best way to measure performance is by leveraging actionable data. Data insights are pivotal in understanding user preferences, viewing habits, and engagement patterns. For example, they can highlight which content genres, formats, and themes resonate most with your audience.

This understanding enables you to refine your content offerings, optimize pricing strategies, and enhance user experiences to align better with audience expectations. Additionally, robust data analytics provides a clear picture of the effectiveness of different monetization models, empowering you to make informed decisions and drive sustained growth.

Here are the key metrics broadcasters should monitor:

• ARPU (Average Revenue Per User) indicates the revenue generated per user. 
• Churn Rate measures your site's subscriber retention. 
• CPM (Cost Per Mille) evaluates the cost-effectiveness of AVOD ad placements. 
• CTR (Click-Through Rate) reveals ad relevance to targeted audiences. 

Software like Cleeng’s ChurnIQ simplifies tracking these metrics, helping broadcasters refine their strategies.  

How to implement new OTT revenue models into practice 

Success in today's OTT market starts with identifying the right monetization model for your business. The key is testing different video offers to understand what resonates with your audience.

Through Core, our comprehensive Subscriber Management System (SMS), broadcasters can effectively experiment with various offer types. The platform enables you to craft specialized pricing models tailored to your content library while building stronger subscriber relationships.

Whether your strategy involves monthly or annual subscriptions, season passes, or one-time rentals, everything can be managed through a unified offer dashboard. Each offer lets you define essential parameters:

• Offer Title
• Price
• Access Period
• Billing Frequency
• Enhanced Options: Implement free trials or create localized offers with region-specific pricing and currencies

Our partnerships with leading providers ensure seamless Server-Side Ad Insertion and comprehensive advertising solutions. We help you develop effective strategies to transition subscribers from monthly to annual plans, significantly improving your service's revenue potential.

Take a tour of Cleeng's content monetization center with the short clip below:

Identify, experiment, and measure to boost OTT monetization outcomes

OTT monetization is a critical area for broadcaster business viability. However, navigating it at optimum can be a complex subject with no single right formula. The best way ahead lies in identifying your audience and their needs, experimenting with the different monetization models, and innovating on the go. At the same time, closely measuring outcomes and pivoting the approach is key to attaining excellent outcomes.

Dozens of world-renowned OTT platforms benefit from Cleeng’s monetization platform and expertise. Get in touch to explore your monetization options with Cleeng!