As consumer expectations continue to rise and competition intensifies, the challenge of attracting new audiences, retaining existing ones, and generating profit from subscription revenues is becoming increasingly complex. To navigate this landscape successfully, it’s essential to explore new avenues for monetization without compromising the quality of the viewing experience.
One promising solution in this regard is Dynamic Ad Insertion (DAI), with a particular focus on Server-Side Ad Insertion (SSAI). SSAI technology empowers you to seamlessly introduce addressable ads before, during, and after content in all viewing modes: live broadcasts, catch-up content, and video-on-demand (VOD). It also offers the flexibility to insert ads on any device that complies with HLS or DASH standards.
What sets SSAI apart from Client-Side Ad Insertion is its ability to replace ad breaks in live streams with personalized ads, ensuring precise and uninterrupted ad placements. Moreover, SSAI circumvents ad blockers, guaranteeing that ads are displayed even on devices equipped with ad-blocking software.
In straightforward terms, SSAI is the ideal technology to monetize your complete video inventory and maximize revenue across all screens.
To estimate how much revenue can be generated from SSAI:
The average consumer dedicates approximately four hours each day to watching video content*. In our industry, it is customary to maintain an advertising duration of eight minutes per hour, equating to 480 advertising seconds for every hour. Furthermore, a 30-second ad is gradually becoming the standard ad duration in numerous countries.
For service providers, the following calculations can help determine the size of their advertising inventory:
- Total yearly watch hours per viewer = 4 hours per day X 365 days per year = 1,460 hours/year
- Ads viewed per hour per viewer = 480 seconds per hour / 30-second slots = 16 ads per hour
- Total ads viewed per year per viewer = 1,460 X 16 = 23,360 ads per viewer per year”
*Note: The provided information is based on the assumption that the average consumer watches approximately four hours of video content per day.
North America
“In the USA and Canada, advertisers typically pay an average of $25 for every thousand ad views on studio-grade content, a metric commonly known as the Cost Per Mille (CPM) price. While this price can rise to as much as $50 for premium sports content*, for the sake of a conservative calculation, we will stick with the $25 price point.
The annual revenue from advertising per viewer in North America can be calculated as follows:
Revenue from advertising per viewer per year in North America = 23,360 ads per year X ($25 / 1000 ad views) = $584 per year”
**Note: The provided information is based on the assumption of CPM rates for studio-grade content in the USA and Canada.
***Note: Premium sports content may command higher CPM rates.
In North America, SSAI can generate $584 per subscriber per year
In other words, with SSAI, each North American subscriber has the potential to generate approximately $1.60 in daily revenue.
To provide a clearer understanding of the potential revenue loss for all your subscribers annually when not utilizing SSAI, please refer to the following table:
| Number of Subscribers | Daily Revenue Loss (per subscriber) | Annual Revenue Loss (for all subscribers) |
|---|---|---|
| 1,000 | $1.60 | $584,000 |
| 5,000 | $1.60 | $2,920,000 |
| 10,000 | $1.60 | $5,840,000 |
| 50,000 | $1.60 | $29,200,000 |
| 100,000 | $1.60 | $58,400,000 |
This table illustrates the potential annual revenue loss for different subscriber counts if SSAI is not implemented, based on the daily revenue per subscriber of $1.60.
Europe
Indeed, with an average CPM of $15 for every thousand ad views in Europe, the calculation for annual revenue from advertising per viewer in Europe using SSAI is as follows:
Revenue from advertising per viewer per year in Europe = 23,360 ads per year X ($15 / 1000 ad views) = $350.4 per year
This means that in Europe, SSAI has the potential to generate approximately $350 per subscriber per year. To break it down further, each European subscriber can contribute approximately $0.95 in daily revenue with SSAI.
European SSAI Revenue Estimations
| Number of Subscribers | 50,000 | 100,000 | 200,000 | 300,000 | 500,000 | 1 Million | 2 Million | 5 Million |
| Advertising Revenue Per Subscriber Per Year | $350 | $350 | $350 | $350 | $350 | $350 | $350 | $350 |
| Total Advertising Revenue Per Year | $17,5 Million | $35 Million | $70 Million | $105 Million | $175 Million | $350 Million | $700 Million | $1.75 Billion |
Latin America
With an average CPM of $5 for every thousand ad views in Latin America, the calculation for annual revenue from advertising per viewer in this region can be determined as follows:
Revenue from advertising per viewer per year in Latin America = 23,360 ads per year X ($5 / 1000 ad views) = $116.8 per year
In Latin America, SSAI can generate $116 per subscriber per year
That is to say that each Latin American subscriber can generate $0.32 daily revenue with SSAI.
Latin America SSAI Revenue Estimations
| Number of Subscribers | 50,000 | 100,000 | 200,000 | 300,000 | 500,000 | 1 Million | 2 Million | 5 Million |
| Advertising Revenue Per Subscriber Per Year | $116 | $116 | $116 | $116 | $116 | $116 | $116 | $116 |
| Total Advertising Revenue Per Year | $5,8 Million | $11,6 Million | $23,2 Million | $34,8 Million | $58 Million | $116 Million | $232 Million | $580 Million |
Asia
If Asian advertisers also pay around $5 for every thousand ad views, the calculation for annual revenue from advertising per viewer in Asia would be the same as in Latin America:
Revenue from advertising per viewer per year in Asia = 23,360 ads per year X ($5 / 1000 ad views) = $116.8 per year
In Asia, SSAI can generate $116 per subscriber per year
That is to say that each Asian subscriber can generate $0.32 daily revenue with SSAI.
Asia SSAI Revenue Estimations
| Number of Subscribers | 50,000 | 100,000 | 200,000 | 300,000 | 500,000 | 1 Million | 2 Million | 5 Million |
| Advertising Revenue Per Subscriber Per Year | $116 | $116 | $116 | $116 | $116 | $116 | $116 | $116 |
| Total Advertising Revenue Per Year | $5,8 Million | $11,6 Million | $23,2 Million | $34,8 Million | $58 Million | $116 Million | $232 Million | $580 Million |
In summary, the potential revenue generated through SSAI can be significant, but the actual revenue distribution will depend on the specific agreements and negotiations between service providers and content owners. Typically, content owners request a share of the revenue since it’s their content being monetized. The specific revenue split percentages can vary based on factors such as the type of content and the bargaining power of the service provider in negotiations with rights owners.
To determine how much revenue you could potentially make with SSAI, it’s essential to plug in the expected revenue split percentage based on your agreements with content owners. SSAI is indeed a monetization strategy that should be taken seriously, as it has the potential to enhance revenue streams for both service and content providers.
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