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It’s no secret that subscription revenue for over-the-top (OTT) content providers has been lagging. In fact, a recent report showed that only 29% of consumers are willing to pay for an OTT service.
This leaves providers with a tough decision to make: continue to rely on subscription revenue, or return to the ad-supported model?
The ad-supported model has its advantages. First, it’s a more familiar model for consumers. They’re used to seeing ads on TV and other platforms, so it’s not a huge shift for them. Second, it’s a more sustainable model for providers. In the long run, it’s more likely that providers will be able to generate more revenue from ads than from subscriptions.
However, there are some drawbacks to the ad-supported model. First, it requires a larger up-front investment to build out the infrastructure to serve ads. Second, it can be disruptive for viewers, who are used to an ad-free experience. Third, it may not be as profitable in the short-term as subscription revenue.
Ultimately, the decision of whether to return to the ad-supported model will come down to a provider’s individual circumstances. If they’re struggling to generate enough subscription revenue, it may be worth considering. However, they should weigh the pros and cons carefully before making a final decision.
