Navigating a Saturated Market: 7 ways to keep your OTT video streaming service profitable

As we approach the final stretch of 2024, the streaming landscape continues to evolve at a rapid pace. With increasing competition from established players and new entrants, keeping streaming services profitable has never been more challenging. Add to that the shifting preferences of viewers, tightening economic conditions, and the rise of free, ad-supported platforms. Now more than ever, streaming providers must adapt and innovate to maintain profitability in this saturated market. This article breaks down how this is possible.

1. Leverage Data for Personalisation 📊

In an era where content is abundant, personalised experiences are crucial for retention. Streaming services should use data analytics to understand user preferences better and recommend relevant content. This not only improves user satisfaction but also keeps viewers engaged longer, which can lead to lower churn rates. Platforms that optimise their recommendations based on viewing habits, search history, and even social trends can differentiate themselves from competitors.

How to execute:

• Use AI and machine learning algorithms to enhance personalised content recommendations.
• Segment audiences to offer targeted promotions, improving the likelihood of upselling premium content or add-ons.

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2. Hybrid Monetisation Models 🚀

Relying solely on subscriptions is becoming a risky strategy. The rise of free ad-supported streaming TV (FAST) services has shown that viewers are open to trade-off between ads and free content. In 2024, a hybrid approach combining subscription tiers, ad-supported models, and transactional options will likely keep revenue streams more resilient.

How to execute:

• Offer tiered subscriptions, allowing users to choose between ad-free and ad-supported versions. A great example of this is when Netflix rolled out it’s ad-free tier in 2022.
• Explore the addition of pay-per-view events or premium content for a one-time fee.
• Consider licensing some content to third-party platforms or FAST services to generate additional revenue without cannibalising existing offerings.

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3. Enhance Advertising Solutions 🤔

For those opting for ad-supported models, optimising ad delivery is key to maintaining profitability. Server-side ad insertion (SSAI) technology ensures smooth ad experiences without disrupting content flow, while dynamic ad placement ensures relevant ads reach the right audiences.

In 2024, advertisers expect more than just eyeballs — they want measurable engagement. Streaming platforms need to provide rich analytics, highlighting viewership patterns and engagement with ad content.  

How to execute:

• Invest in advanced ad technologies such as SSAI for seamless ad experiences.
• Provide advertisers with real-time data on ad performance to justify higher ad rates.
• Use contextual ad targeting based on content, user demographics, and time of day to increase relevance and engagement.

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4. Content Diversification 👀

Content remains king, but the kind of content people are willing to pay for is changing. Blockbuster series and exclusive content are no longer the sole drivers of subscriptions. Niche content catering to specific audience segments — whether that’s live sports, foreign films, or niche documentaries — can drive new subscriptions and build loyalty.

How to execute:

• Identify underserved audience segments and invest in exclusive, high-quality content for those niches.
• Consider partnerships with influencers, sports leagues, or international production houses to offer unique experiences.
• Leverage live events and limited-time offerings to attract subscribers looking for exclusivity.

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5. Focus on User Experience and Tech Innovation 💡

To remain competitive, streaming services must ensure their platforms are user-friendly and optimised across multiple devices. High-quality streaming, quick loading times, and minimal buffering are table stakes in 2024. As well, offering compatibility with various platforms — like Smart TVs, gaming consoles, and mobile apps—helps extend reach.

Emerging technologies like 5G will further improve the ability to provide low latency video streaming, while AI (Artificial Intelligence) presents new opportunities for personalised content recommendations.

How to execute:

• Ensure your platform is optimised for adaptive bitrate streaming, providing uninterrupted experiences across different network conditions.
• Stay ahead with platform updates that improve the user interface and navigation, reducing any friction between content discovery and consumption.
• Begin experimenting with AI to generate better content recommendations and thus better viewing experiences.

6. Expand Global Reach 🌎

With growth in the North American and European markets slowing down, many streaming services are looking abroad for new opportunities. Markets in Asia, Latin America, and Africa offer significant potential for expansion, though content localisation and pricing strategies need to be carefully considered.

How to execute:

• Develop localised content that resonates with specific regional markets.
• Offer flexible pricing models tailored to the purchasing power of different regions, such as mobile-only plans.
• Partner with local telecom providers or entertainment brands to reach broader audiences.

7. Retention, Retention, Retention 🔄

While acquiring new users is critical, retention is where profitability truly lies. Offering exclusive perks, curating content that aligns with audience preferences, and incentivising long-term subscriptions with discounts are all effective ways to keep churn low.  

How to execute:

• Implement loyalty programs or rewards that benefit long-term subscribers.
• Regularly refresh content offerings and communicate upcoming releases to maintain excitement.
• Offer seasonal or event-driven pricing plans (e.g., a discount for a yearly subscription around major holidays).

In conclusion...

As 2024 draws to a close, the battle for profitability in streaming is only intensifying. By leveraging data, diversifying revenue models, investing in advertising innovations, and expanding into new markets, streaming platforms can sustain their profitability and remain competitive. Above all, focusing on the viewer’s experience—from content to usability — will help streaming services not just survive but thrive in this rapidly changing landscape.

Streaming in 2024 may be tough, but with the right strategies, there’s a clear path to success and improved profitability across the board.