How Do Video Streaming Sites Make Money

Making money is an art and finding ways to make money is a talent. Today’s digital world provides huge platforms for earning money in different ways. Increase in customer engagement is what every business wants to witness. And deciding upon the source of engaging the customers has become very crucial. Let us now look at one brilliant source of making money: video streaming services. Video streaming service sites provide continuous videos to the viewers without having them to download and watch. It could be a cricket match; a live concert or a news report, there is nothing which cannot be streamed online these days. And as if this is not enough, we also have sites which live stream the videos, as and when the events happen. So one need not worry about missing a football match being played in a far-away country! We find many of them watching brand new movies on video stream sites, rather than going to theatres and paying for the tickets. Why waste your money when you can watch them for free?

Well, coming to the point of maintaining video streaming services, why and how does one maintain such sites? Do they provide video streams for free or do they get anything in return? We might well not imagine, but the video streaming sites make more money than we expect them to. Let us now see how they make it happen.

Advertisements: Website Ads and Video Ads

Advertisements are one major source of income to the video streaming sites (many of you might have even got vexed with various ads showing up). There are two kinds of ads through which these sites make money – Website ads and the Video ads. Website ads are the ones which appear once we open the video streaming sites. They might appear immediately after opening the site, or might appear as pop-up boxes. Sometimes we even witness links, which when clicked upon redirect us to some other pages. As the businesses aim at reaching out to large number of audience at once, why not choose the sources which provide them. For example, where else is it best to endorse your sports shoes if it is not where the users are watching a football match?

Video ads mostly appear while the video stream is being played. The stream content is paused and the video ads are played; this is an efficient way of advertising products as the user will not be willing to forward the video stream just for a period of 1-2 minutes. Thus, awareness of one’s products improves among the viewers. The video ads might also be played as soon as the user opens the site, grabbing the attention of the user immediately. But one thing that has to be kept in mind while including ads in a video streaming website is that you avoid spamming.

Spam ads will not only create a bad impression on the advertiser but also would reduce the customer engagement with the video streaming site.

Sponsorship

Another source of making money through video streaming sites is sponsorship. It is something similar to advertising and works in a way that a video or a part of the video is sponsored by some business. We can see this showing up in the form of a text or an audio message – ‘This video is sponsored by company X’. We happen to see these messages less often these days as sponsorship has to be practiced by the business on a long run to engage customers.

Cost Per View Model

Let us now learn about the most popular video streaming site, YouTube. While we all know that every person who has a YouTube account has access to his/her own YouTube channel, where one can post videos and make money. But how does this work? Well it’s quite a lengthy process, yet an effective process to earn. While most of them think that the number of views for an ad determines the income, it is the amount of people’s engagement with the ad which matters more. The income from the number of views per ad, according to the study, is supposed to be around 1$ per 1000 views. Discussing about the people’s engagement with an ad which means either clicking on or watching the ad for a proposed amount of time, there are two models that are in practice. The first one being the Cost Per View (CPV), where the advertiser pays the amount PER VIEW for his ad. And a view is supposed to be viewing the ad for at least 30 seconds or at least half of the ad. In this model, even if the viewer clicks on the ad for ‘n’ number of times, it would charge nothing to the advertiser as it is a CPV model.

Cost Per Click

On the other hand, the Cost Per Click (CPC) model charges the advertiser per click. And these ads pop up in between the video or at the end of the video in the form of square banners. The ads in YouTube are also categorized into three based on the way how and when they appear: In-Search ads are surrounded by a yellow border and come up in the search results, In-Display ads which appear in the ‘suggested videos’ and Pre-Roll ads which stream right before the original video content plays (the pre-roll ads can be skipped after 5 seconds of time).

Merchandizing

Merchandizing is also one of the contributors for making money. It is better to show off your merchandise during a video stream and make the viewers aware of your business, and there are cases where merchandising brings in more income to a business than advertising does.

Subscription Based Revenue Model

Coming to the most important and popular source of income, let us now see how Subscription exactly generates revenue. A subscription model is generally adopted by those video makers who are confident about their video content being one of its kinds and by those who believe they can attract audience effectively. These video stream sites charge the viewers on per video or per month or per year basis, based on the type of videos they broadcast. And if you can embed advertisements into your video, you are making sure you increase the revenues of your site. One might have to design a proper website/app by using a PHP video CMS (Content Management System) or any other platform in order to make it eligible for subscriptions. The best examples for such sites are Netflix and Amazon.

You create a website first and then embed the videos into the website to increase the traffic to the site. YouTube however doesn’t work this way. YouTube doesn’t consider the number of subscriptions for a channel, as it focuses only on the CPV and CPC models. But subscribing to a YouTube channel helps in filtering the content as per the user preferences. The videos from the channel you subscribe appear first when you open YouTube, lessening the burden to search for them. As a matter of fact, subscriptions generate more revenue for the individual video streaming services, while advertising generates more revenue for YouTube channels.

To conclude, it is important to make correct choices when you are considering maintaining a video streaming sites. To create a video streaming site, try StreamNow, a popular turnkey software which has been doing phenomenally exceptional service to its clients. If you have any doubts or concerns, feel free to drop a line in the comments section. I shall reply in a day or two. My best wishes are with you and your video streaming site. Cheers!