The OTT industry changes, and it changes often. Staying abreast of what's going on and how it can affect your growing video business is paramount, so we here at Zype would like to bring a trend to your attention — because it could involve your monetization strategies.
Roku has made a billing change, and they’re not the only marketplace to do this. In fact, most marketplaces seem to be moving in this direction, so let’s take a look at what’s happening.
The Roku Billing Change
At Roku, any app that you now submit with Universal Subscription monetization (such as clicking on a video that says "Visit this to subscribe"), will need to include a Roku Native Subscription option.
Roku is OK with, however, authenticating a user who is already subscribed by some other means (for example someone who has already subscribed to Star Talk via their website). Roku just won't accept any hint at "subscribe via this external payment source" popping up on the Roku app.
This is how the models differ, plainly:
Native Subscription vs. Universal Subscription Models
Native subscription models (Native SVOD) go through the device itself. For example, in order to watch content on Roku, a native subscription model would require that viewers have a Roku account. Any content paid for via Roku native SVOD would be charged via Roku to the user’s credit card on file and subject to a percentage fee paid to Roku.
Universal subscription models (Universal SVOD) require a unique PIN or login for the content, and is accessible through any device; Netflix is a great example of a universal subscription service. The video businesses then do not have to give a percentage of the subscription fee to the platform.
As it turns out, this isn’t just a Roku-specific situation. It’s happening in many different places, too.
All app marketplaces seem to be moving in this direction, and it definitely seems to be to their benefit to gain some cut of revenue from native billing options — like we said, if you go through Roku’s native subscription model, they get a cool percentage. You might have noticed that Apple did the same thing about a month or two ago, and Zype updated the app to use email and password fields to authenticate users accounts instead of saying "Go to to subscribe.”
Workarounds and quick fixes aren’t ideal, however, and we’re on a path to concrete solutions.
On one hand, it’s easy to see why this is happening. It’s a simple way for Roku, Apple, and others, to make a little more money. There’s nothing inherently wrong with it, but the app owners do lose revenue this way vs. being able to point all their customers to a website to sign up for services, where ALL of the revenue gets collected.
Luckily, the Universal option doesn’t disappear entirely: it just becomes more difficult to educate customers about the way to pay that doesn’t have to be split with the marketplace.