An advertising model means a site sells advertising to make money while offering sometimes free content in order for users to actually see the ads. A subscription model means that company charges users for services or content.
An advertising model allows you to offer free services or content to attract viewers. When you offer free content or at a lower price than your competitors you should be able to attract a sizable customer base. With a large user base you can attract companies that would want to pay large amounts of money to reach more people or a specific type of audience.
A con of an ad model is that you can’t generate direct revenue from your customer base, you’ll have to wait for a company to have interest in your audience to actually monetize from it. On top of that, you can become vulnerable if the companies, that are paying you for ads, face tough economic times. This makes you too dependable on other businesses, even if your data base is growing.
The main benefit of a subscription model is that you can generate revenue directly from your customer base. You just have to maintain engagement and keep attracting new customers to join. Plus you don’t have to worry about the economics of companies paying you to place ads. Signing up customers on a regular basis provides a more stable revenue than selling advertisements.What may concern you is that using a subscription model means that you depend on building a audience fast and maintaining it in order to generate revenue. You’ll need an efficient, effective system to manage customer payments while including secured data collection to protect customer privacy.
Some OTT companies, like Nunchee, allow you to create both subscription and ad model for your service. For example, for a certain audience in a different country you can charge a fee, while in a different country run the same service with ads. Or even have your service free with ads, but once viewers pay a subscription, run it without ads. Nunchee’s flexibility lets you create numerous models for your video business.If you have any other questions in regards to subscription based models, feel free to contact us.