Until now, at least here in the UK, OTT pay models have remained relatively simple. We have PVOD, TVOD, SVOD, AVOD and paid-by-licence-fee.

Am I missing any? 

None of the biggest players have experimented with AVOD-lite like Hulu. Companies like Channel 4 and ITV have, instead, encouraged viewers to subscribe if they want to remove ads. 

This status quo, such as it is, is set to be disrupted. With Disney+ and Netflix about to introduce AVOD tiers and ITVX – when it goes live later this year – due to launch with at least five different content types (live / simulcast, catch-up, box sets, OTT-first, FAST), OTT pay models will inevitably evolve. 

Here are four potential iterations as well as their upsides, drawbacks and related questions. 

Could any of them really be put into effect? Drop me a line on LinkedIn if you have any thoughts. 

#1) The “Binge-Booster” tier

A survey that we conducted with Whip Media in Q4 last year found that of our 32,741 respondents in France, Germany, Italy, Sweden, Spain, Italy, the UK and the US, 92% liked to binge-watch some, most or all of their entertainment shows (the breakouts were: ALL: 13.5%, MOST: 36.4%, SOME: 41.9%). 

Do adverts interrupt the binge-viewing experience? And if they do, could bingers – who might be on an AVOD or AVOD-lite package – be persuaded to upgrade to some form of “booster” tier (paying perhaps an extra £2.99 a month for three shows of their choice) so that they can watch without the intrusion of ads? 

Upsides

• Akin to TVOD, this would lead to an increase in ARPU – “Binge-Boosters” would pay more than AVOD / AVOD-lite users
• Boosters might be more amenable to becoming full subscribers especially if SVOD meant being able to binge all shows (and all episodes) without ads

Questions

A senior adtech exec that I spoke to about this idea suggested the following downsides / questions:

• Might “binge-boosting”, in fact, diminish the attraction of SVOD because subscribers could choose exactly the shows they might want to pay more for?
• Looking at the different business models (SVOD vs AVOD vs TVOD) what is the perfect mix for a content owner to achieve highest yield (or ARPU) whilst maintaining overall user growth?
• Are content owners willing to make new, high-quality content available on a “cheaper” TVOD model or would they rather lock it away within SVOD models only?
• Looking at the current economic situation, are people willing to pay extra for certain series or “forced” to take the cheaper alternative with ads?

#2) The “All Episodes” tier

Netflix recently reaffirmed its commitment to full season drops of its biggest shows. Sure, Stranger Things 4 was split into two releases in June and July (the rumour was that this was to help bump up its Q3 figures), but the company’s head of scripted series for the US and Canada, Peter Friedlander, told a panel, also in June, that: 

“We fundamentally believe that we want to give our members the choice in how they view… And so giving them that option on these scripted series to watch as much as they want to watch when they watch it, is still fundamental to what we want to provide,”

By contrast, Disney (with, for example, The Mandalorian and Only Murders in the Building), Amazon (Mrs Maisel), Apple (Severance, Ted Lasso) and Paramount (The Man Who Fell to Earth) have all experimented with weekly episodes. The rationale is obvious: to ensure that viewers remain subscribers for an extended period – certainly as long as their favourite shows are “airing” and, hopefully, beyond. 

Could a new tier, then, be introduced for people who want to watch full seasons and not have to wait for periodic weekly episodes? 

Upsides

• The “All Episodes” tier satisfies viewers who don’t want to wait – fostering goodwill toward the OTT service
• Tangentially (and note to self), has anyone done any research on whether viewers who do binge on all episodes of a show then watch it again, at a later date, at a slower pace – all the better to enjoy it more?

Questions

• Similarly, is there any research on the effectiveness of weekly vs. full season drops in encouraging sticky subscriptions? 
• How much extra might viewers pay to have all episodes made available?

#3) The “Premiere” tier

Over the past decade, Downton Abbey has been one of ITV’s biggest titles – both as a TV drama and with two standalone movies. And just as Season 5 was about to air in the UK, in 2014, I had a conversation with an ITV exec about Downton’s release strategy. 

Could, I wondered, the broadcaster make the entire series available for TVOD on its OTT platform, ITV Hub, once the first episode had premiered on the ITV1 channel? At the time, the show was averaging around 7m linear viewers and if ITV could persuade 5% of them to pay, say, £15 to watch the full season, it would raise over £5m. As an added bonus, I suggested, Downton was the kind of show that fans might want to watch again with their families, on Sunday nights. This meant that linear ad revenues wouldn’t be cannibalised. 

My idea remained just that, of course, an idea, but its interesting that the new ITVX will – for some shows at least – adopt a digital-first windowing strategy. 

Might users of other OTT services too be willing to pay more to watch their favourite new or returning shows?

Questions

• To date, streamers have used premieres to make their SVOD propositions more attractive. Would this extra PVOD / TVOD tier make the SVOD less valuable?
• Would it add too much complexity to the overall offering? 
• Is there even enough demand for it?

#4) ASSVOD

Forgive the unfortunate acronym. Where FAST stands for Free Ad-Supported Television, ASSVOD is Advertiser Supported SVOD. 

In this scenario, the customer would have their monthly Netflix subscription paid by, say, three advertisers of their choice. They might only see pre-rolls (so they would retain almost all SVOD benefits) but in return, their details would be passed to those three advertisers. 

Everyone wins: the customer because they get a free SVOD subscription, the advertisers because they acquire new customers and Netflix because they retain the full SVOD revenue but paid by the advertiser instead of the consumer.

Upsides

• As viewers could choose the advertisers they wanted to hear from – and who effectively paid their subscription – there’s a higher chance that they trust those brands and would therefore be more likely to engage with / buy from them

Questions

My adtech friend flagged up some challenges including:

• This model might not help smaller advertisers who are trying to get a foothold in a given market
• It would remove the serendipity of discovering new brands more naturally through their streaming experience
• How would this work with regards to data privacy and what data would be exchanged? (What does the advertiser receive in return to make this a valuable transaction? Email addresses / phone numbers / residential addresses / content and browsing history?)
• How does the advertiser attribute and measure success? Would they reach out to the viewers via email afterwards and send them offers etc?

Thoughts? If so, please do send them to via LinkedIn. We’ll be talking about OTT pay model innovations in an upcoming OTT Question Time. Let me know if you’d like to join our panel.