SVOD and brand partnership: A successful revenue model

In the current era of continuous WFH and lockdown status, OTT has earned widespread acceptance globally. Worldwide over-the-top (OTT) market registered a revenue of nearly $110.1 billion in 2018 and is anticipated to grow at a 19.1% CAGR surpassing $438.5 billion by 2026 according to a report by Research Dive. “Content gone digital” is the mantra that has gripped the globe and is driving the growth and revenue in double digits.

The pandemic saw OTT pick up traction, which has prompted brands interested in reaching the elusive demographic to consider subscription video-on-demand streaming platforms (SVOD) that are ad free platforms. SVOD will be the prime driver of revenue, increasing at a 30.7 percent CAGR from US$708 million in 2019 to US$2.7 billion in 2024, according to a report by PWC on Global Entertainment and Media Outlook. The report also stated that India is the fastest-growing OTT market at 28.6 percent CAGR; to become the sixth-largest market in 2024. As per the same report, India’s OTT market to overtake South Korea, Germany, and Australia and become the sixth-largest market in 2024.

Since many streaming platforms are ad-free; product placements, brand integrations, and co-promotions are becoming significantly more important. Branded integration goes further as a strategy since it allows the brand deeper engagement with the platform audience as well as a longer shelf time as well as being endorsed by celebrities, thereby also gaining audience attention and trust. The massively aggressive world of brand marketers is thus now actively engaging with SVOD platforms as well.

The PwC Global Entertainment & Media Outlook for the year 2020-2024 indicates that for the first time, subscription video-on-demand revenues have surpassed box office revenues with the closure of cinema halls and multiplexes due to the pandemic. With the aid of research and brand recall tactics, predicting viewership before shows launch can help marketers decide where to place their bets.

The focus is now shifting towards the dashboard that recognizes the audience’s behaviour, the engagement metrics, the shows binged, what’s on the audience watch-list, etc. The possibilities of gauging behavioural data through data science are endless. It’s essential to be a part of the consumer journey right from the beginning as the AI can map content according to their watch patterns and preferences, thereby enhancing their engagement experience. With segment-specific content usage, brand associations and hyper-personalization are leveraging analytics and trying to personalize the communication, thereby leading to an enhanced and engaging experience with our subscribers.

Parallelly, brand partnerships have also helped OTT apps increase visibility to the audience, amplifying the platform presence and creating a revenue model, however the model is still an evolving process. It is a highly crucial time for marketing innovations as the opportunity to get discovered today is more significant than it has ever been before. Brands looking to cement their market position in a post-lockdown digital-first world must speed up their digital efforts by creating an engaging digital ecosystem as essential to their business strategy.

With timing being the tight ropewalk between the winners and losers, for players focusing on this, now is the time to take that leap. The current era is perfect for responding and rethinking how we market and connect with our audiences in this new digital landscape.

As the race to grab audience loyalty intensifies, every OTT platform’s fate and success will be decided on how they acquire new subscribers, retain what they have, and at what cost. These three fundamental elements will drive every single decision made by players in the streaming video industry. Business Insider