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Video Monetization Options: Pay Per View vs Subscription

According to Cisco, video will account for 69% of Internet consumer traffic by 2017. You can see why it’s so important to get the best returns on your video content. What is the best way to do this; by offering a pay per view (PPV) system, or by providing a subscription service?

The truth is that there may be no one size fits all answer to that question. To understand the pros and cons in different situations it’s probably easier to look at both options separately.

Offering a PPV provision

PPV obviously gives the viewer the option to watch one piece of video content for a one-off fee. If you are new to proving video content online this can be the perfect way of introducing people to your content without expecting them to immediately commit to a subscription package. It’s also an excellent means by which to attract a casual viewer; someone who doesn’t necessarily spend a lot of time online but has spotted your brand and wants to interact. Of course PPV is extremely popular for sporting events as it allows the viewer to watch a one-off event without having to subscribe to watch a whole range of sports they have no interest in. Many TV networks provide this option; for instance Wrestlemania 30 was watched by approximately 667,287 subscribers and a further 400,000 on PPV.

The downside of PPV is that people are not committing to your brand in the long term, and this means that your long term forecasting is not as accurate as it can be if the majority of your viewing figures are subscription based.

Providing a subscription service

From a viewing point of view subscription is ideal if you want to follow a particular brand of videos without having the hassle of paying every time you watch; it has the added benefit of generally being a cheaper option than paying for each piece of video content individually. This means that for people who have an established interest in your content, providing a subscription option is an excellent idea. It also means that you can plan ahead in a more organised manner. Once someone has taken out a subscription they generally don’t cancel for at least four to six months, so you can forecast viewer numbers in a far more reliable manner.

SVOD usage in Canada and US

Source: Subscription VOD usage growth in Canada and US (Digitalsmiths)

 

Which is the best option for you?

Deciding whether to offer PPV or subscription often depends on your own circumstances. Are you new to the world of video monetization? In which case you may want to offer PPV initially and analyze your figures to monitor how people are engaging with your brand. It could be that a mixture of PPV and subscription, or a hybrid of subscription with certain premium content as PPV, works best. Essentially you need to choose the option that is going to secure the maximum amount of revenue and brand attraction, whilst not forgetting that it’s important to have a certain level of reliable viewing in order to plan ahead and sustain growth.

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