Scroll back through the history of online video services and it’s fascinating to see how their business models evolved.
Netflix, which has been running in some form since 1997, was originally - and famously - a DVD sales and rental company before introducing streaming in 2007. YouTube, perhaps the web’s first true home for short form video, was initially free at its outset in May 2005; its first targeted advertising capability wasn’t made available until the following year. And whilst Prime Video (formerly known variously as Amazon Unbox, Amazon Instant Video and Amazon Video) has always been tied to its parent company’s retail membership offering, Amazon also acquired LoveFilm, the DVD-by-mail and TVOD (Transactional Video-on-Demand) provider in 2011.
A commercial innovator amongst these other innovators was a specialist UK newspaper called The Racing Post. Together with the linear TV channel, Racing UK, it had - in 2005 - acquired the newly created rights to screen horse races online.
When its inaugural OTT service launched later that year, it did so with what we’d now call SVOD (a monthly subscription), pay-per-view (£1 to watch a race) and Bet2View (wager £5 with a bookmaker partner and watch the race for free).
These were real novelties at the time in a still embryonic video landscape. And despite having to build almost all of the architecture – the CMS, CRM, DRM, DAM / MAM and payment solutions – from scratch, we might now, on one level, regard this as a relatively simple project. In an age before smartphones and tablets it was, after all, only catering to a single viewing device: Windows computers.
Coming back to 2023, OTT service providers now habitually deploy multiple business models. They don’t launch with them all at once necessarily – they may be introduced more gradually – but the options include:
And in between these skyscrapers are a few townhouses too:
So which one, or ones, do you choose? The easy answer might be to try most (or all) of them at once. After all, don’t Amazon, Netflix and even the new ITVX (from the UK’s biggest commercial broadcaster, ITV) all operate using multiple models? They do, of course, but not everyone has the budget or resources of those three companies to be able to attempt multiple experiments.
The guiding factors in deciding which options to choose include:
This blog post marks the fifth and last blog post of a five-part series. Read more blogs here!