Industry leaders across consumer markets are taking note of untapped over-the-top (OTT) advertising opportunities—and adjusting their budgets accordingly. As a result, advertising spend is shifting from display and video ad budgets to OTT platforms such as Hulu and Peacock.
Take Expedia, for example. The company shifted its budget allocation, increasing expenditure on OTT advertising by 170% to $7.8 million from Q1 to Q3 in 2022. Similarly, the consumer packaged goods (CPG) market increased its OTT ad spend by 58% between 2021 and 2022.
Free ad-supported streaming television (FAST) platforms such as Tubi and Pluto TV are rapidly gaining in popularity. Coupled with the rise in OTT ad spend, a significant opportunity awaits content owners and networks. So, let’s look at what distribution through OTT platforms entails—and highlight strategies to optimize monetization.
What Is OTT Advertising?
In a nutshell, OTT advertising, or streaming video ads, are the ads that viewers see within video content. OTT ads allow content owners to market to their audience with targeted ads as they stream content.
If you had a library of phenomenal video content a few years ago, getting this broadcast on television was not an easy feat. In fact, it was impossible for most content producers and owners. But OTT platforms make it possible for content owners to share their work with the world—and monetize it too.
What are OTT Platforms?
OTT (over-the-top) platforms are streaming services that deliver video content directly to viewers via the internet, rather than through traditional cable or satellite providers. They bypass the need for a cable subscription and instead rely on internet connectivity to deliver streaming video content to a variety of devices. These include smartphones, tablets, computers, and smart TVs. Additionally, OTT platforms allow content owners and producers to create their own media streaming channels without using traditional cable or broadcast platforms.
Their popularity largely stems from viewing convenience and flexibility. They offer viewers the ability to watch their favorite shows and movies on their own schedule, from any device.
These platforms act as a driving force behind popular internet streaming services and generally include features like subscription management, built-in advertising, and content management.
The question for content owners, then, is how to choose the content to display, how to deliver that content, and how to monetize content on their OTT platform. Do content owners distribute to 3rd party platforms or do content owners build or launch their own services? Do they emulate streaming services like Netflix and Disney+, which have subscription paywalls for their content? Or do they want something more hybrid like Hulu and Peacock, which offer both ad-free and ad-supported plans?
How OTT Platforms Deliver Content to Viewers
OTT platforms use a variety of technologies to deliver content to viewers. One of the most common methods is via content delivery networks (CDNs). These networks of servers are located around the world, hosting and delivering content to viewers based on geographic location. CDNs help to ensure that content delivers quickly and reliably—even during times of high traffic.
OTT platforms also rely on adaptive bitrate streaming, which involves encoding video content at multiple quality levels and delivering the appropriate version to viewers based on their internet connection speed. This helps to ensure that viewers with slower internet connections can still watch content without buffering or interruptions, on any device.
Many platforms additionally include live stream, video CMS, and video hosting software functionalities.
OTT Must-Haves for Content Providers
While OTT platforms provide content owners with an extraordinary opportunity, there are criteria for inclusion in the category.
To qualify, an OTT platform must:
- Integrate with or natively provide a CDN
- Provide search functionality for viewers
- Organize and schedule content releases
- Include content filtering options
- Allow users to create profiles
- Provide storage
- Provide transcoding
- Geo-Rights Restrictions
- Monetization features
By working with an OTT distribution and monetization expert, you can significantly reduce these challenges. You can focus on your content—while the experts focus on streamlining distribution and meeting the necessary criteria.
Data shows that revenue in OTT video platforms is projected to reach $316.1 billion in 2023, with video advertising making up $205.1 billion of the market volume. With a predicted compound annual growth rate (CAGR) of 10.01%, revenue is projected to reach $462.9 billion by 2027. As technology develops and OTT platforms continue to find their feet, both content owners and advertisers will gain more benefits and face fewer challenges.
Moving OTT Advertising and Distribution to FAST Channels
With the growing popularity of FAST (Free Ad-Supported Streaming TV), some OTT platforms offer a similar programmed viewing experience to traditional television, but without the expenses and TV hardware. Here’s how FAST channels work:
- They are free—viewers don't need a paid subscription
- FAST channel delivery happens via OTT platforms directly from the internet, just like other streaming networks
- You can view content on any internet-connected device including tablets, mobile devices, and PCs (programming is, however, predominantly consumed on connected TV devices like Roku boxes, Chromecast sticks, and Samsung Smart TVs)
- Programming is scheduled in a similar way to traditional television formats and includes adverts
- Similar to linear TV channels, FAST channels include a TV guide or electronic programming guide (EPG), which displays every channel’s programming schedule
FAST Channel Benefits for Content Owners
While FAST formats are beneficial for viewers since they are convenient and free, they also provide significant benefits for content owners.
FAST channels offer increased flexibility for content distribution and delivery. The model is a cost-effective solution to reach a growing audience and monetize content through targeted advertising. FAST channels’ capability to laser-focus ad delivery to a specific audience makes advertising campaigns more effective, and boosts return on investment (ROI).
Since content is prescheduled, content owners are likely to engage viewers who would otherwise not necessarily watch their content. This is a good opportunity to draw new and unexpected followers and program demand. By cleverly packaging your available videos, scheduled linear models let you showcase new and older video content together. This helps engage audiences for longer periods; it also means you can maximize the potential of your entire content library, instead of only distributing and monetizing the latest or most popular videos.
With FAST channels, the more your content is out there, the greater the opportunity to monetize through advertising. A report from TVREV projects overall OTT ad spending will surpass cable and broadcast advertising in 2025. By 2027, OTT ad spend (or ad spend on streaming) will make up 68% of the total ad spend.
FAST Channel Challenges
As advantageous as OTT FAST channels are for content owners, distributors, and advertisers alike, there are some challenges to overcome.
Consumers are used to ad-free experiences on platforms such as Netflix and Amazon Prime Video. Distributors and advertisers must figure out how to deliver unobtrusive and meaningful ads that enhance the viewing experience, rather than causing frustration.
With no regulations currently ensuring the quality of OTT inventory and media, piracy and ad fraud can be a problem. Although OTT is less vulnerable than desktop computers, fraudsters have found their way into this space as well. To keep content secure, OTT needs measures such as invalid traffic detection, standard naming practices, and other protective conventions.
Small OTT platforms face high competition with tech giants such as Google, Apple, and Amazon. The rising prevalence of closed ecosystems and increasing consolidation in the market further compounds this challenge.
Varying platform algorithms and search capabilities for categorizing and delivering content can impact content delivery, ad visibility, and targeting accuracy.
Measurement and Attribution
While OTT platforms will become more interactive in the future, it’s still difficult to track conversions and tie them back to specific ads. Television is the primary device for viewing OTT content—but tracking actions on a TV isn’t as straightforward as tracking actions on digital devices.
Partnering with an OTT distribution and monetization expert can significantly reduce these challenges. Robust OTT platforms ensure that your content meets platform requirements and simplifies contract management by using one master agreement for all content deals. You avoid the trial and error of navigating these challenges and ensure the viewing experience is on-point from the start—developing a solid reputation on which to build your monetization strategy.
Key Considerations For Distributing Video Content on OTT Platforms
OTT platforms are increasingly popular as a method for content producers and content owners to distribute their videos to a large, engaged audience. But to make the most of OTT platform video distribution for your content, you need an optimization strategy. Let’s look at some key questions to ask yourself when trying to increase the reach of content on OTT platforms—ultimately helping you tap into your target audience.
How Should You Distribute Your Content on OTT Platforms?
Before choosing the best channels and methods to distribute your content, be clear about your target group. This is essential, as your entire strategy pivots around your ideal consumer. When defining this group, consider the following:
- What is their preferred mode of media consumption?
- Where are they watching video content?
- Which target audience segment has the highest revenue potential?
- Do you project a change in your target audience in the next three years?
Once you know who you’re targeting, you can choose the best strategy to distribute your content. Let’s explore some of the most effective OTT strategies for media distribution.
OTT Subscription Aggregators
Roku TV, Apple TV, and Amazon Fire TV are all examples of popular OTT subscription aggregators. These channels are third-party platforms that offer a bundle of video subscription services. The subscriptions are often available at an affordable rate as an add-on to the provider's primary OTT content.
These OTT platforms are beneficial for content owners since you can piggyback off the wide reach and solid reputation of an existing platform. The problem, however, is that you often have little control over how and to whom your content is showcased. You will most likely not gain access to detailed customer insights.
dotstudioPRO OTT distribution and monetization experts take care of these pitfalls with active content placement and transparent reporting. dotstudioPRO offers a low-risk opportunity to distribute to 40+ streaming platforms with a personalized dashboard that lets you manage your content and gain performance insights.
Free Ad-Supported Streaming Television (FAST)
FAST OTT streaming services receive payment from brands in exchange for showing their ads to viewers. FAST channel distribution offers content owners an opportunity to use older content libraries to build niche channels, and has significant revenue-generating potential with advertisers.
Doing this on your own means you don’t always have control over which ads your users see, and that third-party platforms take a cut of your ad revenue.
dotstudioPRO, however, offers a few distribution solutions for content owners. First, the dotstudioPRO aggregator, which helps get content placed on multiple third-party platforms on a rev-share basis with no platform delivery fees. There is also the dPRO FAST Engine, which helps any existing on-demand OTT network turn on a new revenue stream by integrating the FAST engine to deliver multiple FAST channels in a program guide. This supports provides a powerful yet adjustable server-side ad insertion (SSAI) to optimize ad relevance in Linear FAST streaming formats. You can autonomously insert your own ads or integrate your content partner’s streams and advertising parameters.
FAST Engine is compatible with reputable ad insertion platforms such as Wurl Ad Spring, Amagi Thunderstorm, Publica SSAI, and AWS Mediatailor.
Owned-and-Operated Apps (O&O)
Media distribution through third-party OTT platforms is optimal for audience diversification and building awareness. However, if you want to establish a brand as an OTT service provider, you will want to establish your own streaming app.
Instead of hiring a developer, you can use a cloud-based solution, such as dotstudioPRO to build your OTT app. You can integrate FAST linear programming and choose from a flexible build and/or managed options.
dotstudioPRO’s O&O solution offers an award-winning CMS with an intuitive design tailored to the specific needs of the video industry. It provides the best tools to build and grow your OTT network, enabling you to achieve success with your next-generation video network. dotstudioPRO manages the entire network of backend video streaming technicalities that your network requires, while you retain control of your content distribution.
Which is the Right CMS for Your Video Content?
A video content management system (CMS) lets you build a scalable video ecosystem without intensive technical knowledge. A robust CMS is critical to seamlessly manage, distribute, monetize, organize, and store your video content. It’s also key to achieving an intuitive backend experience for your team and a front-end experience for your end consumers.
Consider the following features when choosing the right CMS for video:
Video Encoding and Transcoding
To provide a great viewing experience, your video CMS must have encoding and transcoding functionality. You need to compress raw footage for smooth streaming; Embedded video encoding and transcoding functionality automates this process, optimizing videos for playback. The CMS will also adjust video formats to match the user’s device.
White Label Player
Investing in a video CMS with white-labeling options enables levels of customization, including your unique brand identity. This is essential for building a strong brand image.
Choosing a high-quality video CMS is the first step toward monetizing your videos. Ensure the video CMS you choose features a built-in, SSL-protected video paywall with top-class security features and a variety of payment options.
Batch Uploading Tools
Bulk-uploading videos significantly decreases upload time and requires manual labor. You can also easily migrate a large video library from another platform to yours.
Customized Video Captioning
Closed captions can greatly improve the viewing experience for your audience. The video CMS should provide the option to select captions in any language and customize the color, font, size, and placement.
Video analytics are essential to see how your content is performing. Your video CMS should provide the following data:
- Viewer demographics
- Viewer geolocation
- Viewer device
- Number of views
- Total minutes watched
- Most watched videos
Choose a video CMS that can easily scale to accommodate your storage needs. It should also facilitate easy uploading and smooth delivery of large files.
An ideal CMS should allow anyone—with or without training—to upload, tag, and categorize videos easily. Well-organized videos ensure your users and team can find what they’re looking for effortlessly. It also helps users find videos similar to the ones they already enjoy.
How Can Automating Workflows Help?
Automated workflows for video CMS replace human intervention in the video management lifecycle, freeing up resources and saving both time and money. In video content management, there are many opportunities to automate repetitive processes, which provide the following benefits:
A video CMS with automated workflow capabilities is essential to make the most of a large video archive. It provides tools to classify and organize content, as well as add metadata to help describe it. Additionally, it offers powerful search capabilities, allowing content owners and users to quickly find what they're looking for.
Automated workflows can make the production and distribution of videos and rich media much more efficient. With features like file conversion, distribution, and social media publishing, you can automate processes that used to be laborious and time-consuming, speeding up the entire cycle.
A CMS with automated workflow capabilities gives you full control over your business's video content creation, distribution, and monetization, rather than needing to depend on external contractors. You have the authority to delegate tasks, upload, index, and publish videos, and make design or workflow changes as needed.
Furthermore, you can monitor performance and viewer behavior through comprehensive analytics and dashboards, allowing you to make decisions that optimize your content's performance.
Monetizing Video Content Through OTT Distribution
As OTT platforms continue to gain traction, on-demand streaming networks seek different methods to monetize their content and generate revenue.
For content owners and producers, successful OTT video content monetization entails maximizing the ROI of each asset. The OTT platforms you choose must provide monetization capabilities and robust analytics.
To choose the best distribution deals, you need to understand the market value of your content. Effectively evaluating content requires aggregating ratings and behavioral data across platforms.
Another challenge for content owners when it comes to OTT distribution is managing all distribution partnerships cost-effectively. Not only do you need to negotiate the best OTT service and licensing agreement terms with every partner, you also need to keep track of renewals, content requirements, and payments.
Regardless of whether you choose a subscription, video-on-demand, ad-supported, or combination monetization model, you need an OTT platform that streamlines agreements, tracking, content management, distribution, and payments in a single hub. In addition, you need to ensure you meet the technical streaming and security requirements before even considering monetization through video content distribution. All of this and more is why you should look for a robust platform such as dotstudioPRO.
Maximize Your Video Content Potential With dotstudioPRO
The use of OTT platforms has revolutionized the way video content is delivered and consumed. Content creators have a wide range of options for getting their content in front of their target audience—it’s easy to get overwhelmed. You need a full content strategy that employs on-demand and FAST programming, so your users can watch and engage how they want to—while you monetize your content to its greatest potential.
With dotstudioPRO, you can launch a DTC streaming network quickly and cost-effectively. In addition, dPRO FAST Engine makes it easier than ever to create or add a Linear FAST EPG to your network no matter what technology you’re using.
The complete back- and front-end solution comes with an award-winning management system, which enables publishers to manage monetization through SSAI, normalize metadata, and accelerate app development. You can also stream your content to other smart TV apps like Apple TV, IOS & Android Mobile and Tablet, Google Play, Android TV, Amazon Fire TV, Vizio, LG, Samsung, and Roku.
Don’t let the technicalities prevent you from maximizing the potential of your video content. Reach out to us today for a simplified and effective OTT platform solution.