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OTT Apps For Sports: How OTT is Helping the Sports Industry Reach Millennial Fans and Increase Revenues

February 3, 2017

Every day, marketing teams are working hard to onboard their target audience — often, that means millennials. The earlier they onboard this group, the better, especially given that the Over-The-Top (OTT) industry is still in its early stages to match up to its enormous projections for 2021 (which is estimated to be an industry worth $751BN).

Despite being in its infancy, there are still many tried and true revenue models for OTT as it pertains to sports. Let’s discuss some of the proven revenue models — feel free to adapt them at will, and your bottom line will thank you for it.

  1. Sell ad space: For OTT, content is king. Content includes videos, audios and other media. For content, the universally accepted revenue model is selling ad space. If you are giving away content for free, build your strategy around selling this real estate. If it’s a VOD platform, then an ideal ad model will be to show video ads between the content. It could be before the video or in between. But please don’t use this as an opportunity to sell ad space for every video; be kind to your users. Sell ads for popular videos or the channels they regularly follow, but create the ad engine to be a functioning as a friend (but not that annoying friend who talks too much).

For sports, there are always ads displayed in breaks and match interruptions. However, for sports like cricket where there is a break every 2 minutes, it will become excessive for users to keep seeing ads. For match videos or highlights, if a user is choosing to watch, then they will likely have the patience to see a short ad. The key point here is: leverage ads, but don’t oversell to your consumers.

  1. Try a subscription model: This is where you are getting a user to subscribe for a specific time period. Enable multiple models, like a plan for 2 weeks, monthly, quarterly and annually. If there is a subscription model, the user will need to be convinced of its strong value proposition. Be objective and explain what they will get for each of these plans. Perhaps a difference in price for each of these plans will give more options for a user to invest appropriately. If you offer a free trial, that can certainly motivate them to give it a shot.
  1. Pay close attention to the number of devices and video quality: This aligns with the subscription model. Depending upon the number of devices for accessing the content and the quality of video access, create separate plans. Just like what Netflix does. On the tech side, limit a username or account email ID to be accessible only through the registered devices. The video quality also has to be addressed in these models. For higher resolution (4k, 8k) you should consider spiking those rates. The data storage cost is higher and only a few products in the market currently enable that level of video quality. So only people who can afford to spend such large sums of money will pick up such products.
  1. Offer a “family and friends” plan: This is an extension of what we’ve just discussed. A family with more than 2 members or a group of friends would ideally like to consolidate their accounts to make it as cost effective as possible. Apple Music, Spotify and many others do this. Keep an upper limit; consider scaling this to corporate connections too.
  1. Leverage corporate connections: Give corporate discounts. Build your network. Run events/sessions for corporates. Get on the ground and make your voice heard.
  1. Create short plans: Subscriptions for short time periods can be sold particularly quickly: for instance, a pay-per-game or even a pay-per-league. Let’s say getting a subscription for the French Open makes sense if you only follow clay court tennis. Likewise, creating plans for leagues and tournaments or maybe just for a match will give more options to consumers who only need specific things from you.
  1. Establish access tiers: For sports, since your main revenue happens during events, give users free access to a game with a delayed telecast (let’s say 5 min). If they want the live feed, get them to subscribe. Maybe after the game is over, if a consumer wants to rewatch it or watch highlights, give them access only if they are a premium member. Otherwise, give access only to a delayed live telecast. Or, considering giving premium users special access to post-game press conferences, training sessions or exclusive interviews.
  1. Casting: Disclaimer — I am personally not a big fan of this revenue model because my entertainment system at home just took a hit when Spotify made casting to Google Chromecast for premium members only. That said, you can keep Airplay and Google Chromecast accessibility only for premium users, making more people like me sad. Bad boy Spotify. So if a match has to be cast on a smart TV or Airplay and Chromecast, you’ve got to be a premium member!

There are a number of additional strategies you can pull off, but these should give you a good place to start. You can always iterate later. These are easy strategies which are already practiced by OTT providers, and can make you good money. Don’t stick to a single model, work around, be dynamic, add some gamification features to keep it more exciting and enticing. Let us know in the comments section if you want to share some of the interesting revenue models you’ve seen with OTT for the sports industry.

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