Content can be accessed from anywhere worldwide, but does its price change accordingly as it travels across borders?
In this article, we’ll explore:
- Why multi-currency pricing has become essential for OTT platforms aiming to make a global impact.
- The impact of multi-currency pricing on user experience and retention in various regions.
- How customizing this aspect of your service can improve customer satisfaction.
Multi-currency pricing and its importance in the global OTT market
We already know that it has become increasingly essential to provide viewers with a personalized and easily accessible viewing experience in the current age of digital streaming.
Creating a user experience that resonates with your audience goes beyond only understanding the types of content they prefer. It’s also about considering their economic situation and reflecting that understanding in your pricing model.
Imagine a person in Tokyo getting ready to watch a Hollywood blockbuster, only to be confused by the price displayed in dollars. Or a person in Paris trying to figure out the euro equivalent of a subscription fee listed in British pounds.
While it’s easy to figure it out with a quick search on the internet, it creates extra friction in your customer’s payment. Conversely, multi-currency pricing that allows users to pay for content in their preferred currency facilitates a more seamless and convenient payment experience.
In other words, multi-currency pricing isn’t just a feature — it’s a statement.
It says, “We know you, we value you, and we want to make your experience as effortless as watching your favorite show.”
Building a successful OTT platform for both viewers and broadcasters alike
End-users highly value multi-currency pricing as it helps them to make informed purchase decisions. But what’s in it for OTT service providers?
Broadcasters use multi-currency pricing for several reasons:
- It helps them increase global sales by conveniently targeting many geographical markets.
- It allows them to control their psychological pricing strategies across different regions.
- It enables them to avoid price fluctuations per country due to different tax and/or exchange rates.
- It helps reduce customer service inquiries and chargebacks.
Let’s look at an example to illustrate how multi-currency pricing works.
Consider an offer that is set up in France without leveraging multi-currency pricing. The price of the offer is 10 EUR, subject to the French tax system, where the broadcaster has to pay a 20% tax. Therefore, the net earnings are 8.33 EUR. However, if the broadcaster wants to sell in other countries, viewers in different countries will have to pay different prices.
As per the table above, the final price that the viewer pays is not entirely the same.
However, implementing multi-currency pricing can ensure that the final price in different countries will be the same, for example, €9.99 in Poland and France, regardless of the varying tax rates.
This approach would mean that the margin earned by the broadcaster would differ from country to country.
Such a strategy would also ensure that the psychological pricing strategy remains intact.
With multi-currency pricing, you can set different prices for different countries. For instance, you can charge viewers in the Netherlands €9.99, while viewers in France can be charged €8.99.
The best part of multi-currency pricing is that it simplifies managing pricing in foreign currencies. You can easily set and manage pricing in different foreign currencies and still receive settlements and reports in your home currency, making your job much simpler.
The future of OTT streaming services in navigating pricing and monetization
The future of OTT streaming services is not just about who has the biggest library of content but also about who can innovate in pricing and monetization to deliver value, engagement, and a personalized experience to the end users.
Multi-currency pricing in itself is a powerful tool. It breaks down geographical barriers and enhances the user experience by offering transparent pricing in the viewer’s local currency.
However, a one-size-fits-all approach to monetization is not always viable in the ever-changing world of OTT platforms.
The key to long-term growth in this field lies in diversifying revenue streams. OTT platforms can create multiple sources of income by implementing various monetization strategies, which also leads to a more robust and sustainable business model. For example:
- Subscription models that offer different levels of access, content, and user experiences.
- Ad-supported content based on viewer data to increase relevance and reduce viewer annoyance.
- Transactional video on demand (TVOD) to cater to viewers who are not ready for a subscription but are willing to pay for specific content.
- Freemium models attract a wider audience and users to upgrade for a better experience without ads or access to more exclusive content.
- Hybrid models that combine several elements, such as subscription, ad-supported, and TVOD models, to cater to diverse consumer preferences and maximize revenue opportunities.
- Merchandising and e-commerce to increase brand visibility and engage fans with the brand.
- Live events and pay-per-view to attract a niche audience willing to pay a premium for real-time experiences.
- Licensing content to other platforms or networks.
OTT platforms have many opportunities and strategies to expand and increase their revenue streams.
It doesn’t matter how we slice and dice the industry. The most crucial aspect is prioritizing customer satisfaction and loyalty above all else.
Revolutionizing OTT services ahead
OTT platforms increasingly use data analytics to customize pricing strategies, which consider individual viewer behaviors, preferences, and engagement levels. This trend is expected to impact the future of streaming services significantly.
Artificial intelligence and machine learning are also crucial in refining recommendation engines and pricing models, thereby boosting revenue efficiency and enhancing the user experience.
To expand their market and make content more accessible, streaming service providers are introducing region-specific pricing, thus enlarging their audience base.
Additionally, future trends indicate a shift towards hybrid models, combining subscription, ad-supported, and pay-per-view options. The reason? Such models promise greater versatility and appeal to a diverse audience, catering to different content consumption patterns and financial preferences.
Read more: Cleeng CEO predicts hybrid models, cost control & actionability in 2024
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Want to set up multi-currency pricing with Cleeng?
Multi-currency pricing can be easily enabled via the Cleeng API. It can be defined per specific country where a broadcaster plans to sell tickets, season passes, or subscriptions.
Currently, this type of pricing is used by some of our major SVOD service providers, like BroadwayHD and Mola TV.
Contact us for more details on activating this form of pricing.
