Is subscription-based revenue model the future of video monetization?

Learn how subscription can be one of the effective business models that can help you monetize your video.

As per studies, the subscription economy grew by 435 per cent over the last decade. Reports also suggest that it will reach a massive market size of $1.5 trillion by 2025. That makes sense as reportedly the average person spends about $133 per month on subscriptions, adding up to $1,600 per year. All of this leads to the point that people are opting for a subscription-based model and doing that incessantly. Video creators, on the other hand, are doubling down on this positive trend to sell their content online.

In this article, we will look at the subscription-based revenue model, its impact on video creators, and trends in consumer behaviour. We hope this will help you decide if going down the subscription route to monetize your videos makes sense to you and your audience. 

Rise of subscription over ad-based revenue

Although advertisements appear to be an adequate choice for customers unwilling to spend money on subscriptions, consumers, in general, tend to dislike advertisements and find them annoying. According to a 2019 Edelman study, three out of every four consumers disregard ads and 47% people have modified their media habits to see fewer of them, while others use ad blockers to avoid them entirely. 

Additionally, the younger generation dislike ads to such an extent that they are willing to spend money on subscriptions. As per Joanna Coles, and Marc Pritchard, Chief Brand Officer at Procter & Gamble, many ads are not just irrelevant but also "silly, ridiculous, or stupid."

When consumers are exposed to too many ads, they develop ad fatigue. This reduces their propensity to pay attention or click on advertisements. Streaming services such as Netflix, Hulu, and Amazon Prime Video provide an ad-free viewing experience, making them popular among consumers who want to watch their favourite episodes and films without interruptions. While not everyone hates advertisements, an increasing number of people are willing to pay to escape them. This trend has the potential to transform how content creators and businesses finance their work by favoring subscription-based platforms over advertisements. 

Benefits of subscription-based revenue 

According to Angel Investor Eric Stromberg - 

 “Subscription is a powerful business model because it creates an environment where the default customer behavior is retention, as opposed to one where the default behavior is churn’’. 

Customers who subscribe to a creator’s content do so because they want to be personally involved in their video creation journey; hence, subscription-based revenue has high customer retention, allowing creators to give their customers personalized content, resulting in stronger customer connections. Furthermore, by keeping subscription packages flexible, video creators can reduce turnover by letting subscribers choose from different packages or tiers or by offering free trials. 


As a consumer, if you believe that memberships will be too costly, it is time to reconsider. For example, if you want to watch a movie, buying a DVD is far more expensive than signing up for a Netflix account, which gives you access to thousands of movies. 

As a creator, you can initially start pricing your content at a low rate, thereby selling the content at the value you initially wanted to sell at. This is known as foot-in-the-door technique, a psychological concept used as a marketing strategy. The "foot-in-the-door" strategy helps customers by giving them a low-risk, affordable way to test out new services and a way to gradually invest more in products and services that suit their needs.

Sell exclusive content

Video artists are on the lookout for new payment structures that would allow them to have greater control over the type of video they generate. Instead of depending entirely on indirect payments for free content, creators are experimenting with 'Premium' or exclusive content on alternative video platforms. For example, the content on video streaming platforms is only available to customers who pay for a subscription. This availability of special content encourages customers to sign up for the service. Creators are also broadening their reach across platforms like Discord, Instagram, and Twitter and are building a devoted community. While YouTube's massive reach is evident, video creators are increasingly gravitating towards platforms that allow them to interact directly with their audience.

Are video creators opting for subscription ? 

Creators are switching platforms to seek more sustainable income. 

This is because free video platforms like YouTube make all of their money from advertisements, forcing video creators to be at the mercy of the platforms or rely on product placements and affiliate marketing to make a living. Many creators have been expressing their frustration over YouTube’s payout model and the platform’s orientation towards advertisers. This is leading them to explore alternative platforms such as Patreon or independently pursue brand partnerships. According to The Verge, YouTube produced a staggering $34 billion in advertising revenue from 2017-2020 leaving content creators with comparatively little income. Rod Breslau, an Esports consultant and journalist, said that a big chunk of YouTube's advertising payouts go to the top 1% of creators. He went on to say that creators who are struggling the most with ad-based revenue are those at the middle and bottom of the pay scale. 

Vivek Saxena, co-founder and CEO of Thinkly says that as power passes to creators, the subscription model is the way forward. Neha Nagar, an influencer, founder and CEO of TaxationHelp. shared her personal experience of how she and other creators are getting a lot of attraction on paid courses, live streams, workshops, and much more. This helps the audience to get all the premium quality content in one place. 

Furthermore, an interview  conducted by Tien Tzuo, CEO of Zuora with content creator and journalist Stefan Etienne, digs into what Gen Z and millennial video creators are doing in the field of video creation. When questioned about the current focus for video creators, Etienne emphasized on monetization and escaping the constraints imposed by ad platforms such as YouTube and Twitch.

He added that many creators are trying novel techniques to overcome these limitations. For example, to reach a larger audience, they are separating their video distribution between YouTube and Twitch, while giving longer, uncensored, or early-release versions on paywalled platforms such as Patreon, Fanhouse, or OnlyFans. This strategy not only broadens their reach but also allows for direct revenue via monthly subscriptions, However, it is not only individual efforts that are gaining attraction. Prominent streamers are launching media and talent management organizations, such as Pokimane's ( twitch streamer and Youtuber) RTS ( Real time streaming) or Naomi Osaka's collaboration with LeBron James to launch a media venture that will focus on scripted and unscripted television series, documentaries, anime. 

Etienne emphasized three essential points when diving into how subscriptions will benefit the creative economy. For starters, subscriptions allow content creators to build direct and meaningful ties with their viewers by providing exclusive fan experiences and conversations. Second, subscriptions promote creative freedom and flexibility, allowing creators to experiment with unconventional content formats. Finally, creator-specific subscriptions provide content creators more control, alleviating concerns about policies and revenue sharing.

The transition to subscription-based revenue models represents a significant advancement in the monetization strategies. Creators are looking at new opportunities to develop sustainable careers because they are no longer entirely dependent on advertisements. 

Understanding consumer behaviour 

Based on our research we have highlighted a few important trends among consumers in the subscription economy - 

  • According to the Deloitte Digital Media Trends Survey, 48% of consumers in the United States, the United Kingdom, and Germany are rapidly embracing streaming services. Consumers want relevant, accessible content that caters to their preferences.
  • Younger generations are eager to pay for content. However, they want media companies approaching them with enticing offers. When it comes to subscriptions, the elderly prefer convenience and may opt for ad-based revenue. 
  • Research by Samala Nagaraj, Soumya Singh identified key factors influencing consumers' decisions to subscribe to OTT video streaming services. Content, convenience, features, price, and quality all play a significant role. These factors, along with demographics like age, education, occupation, and household structure, impact subscription choices.
  • Marketing studies indicate that consumers are willing to pay for subscription services, but there's a limit. The price range appears to be $20 to $30. Consumers may become apprehensive if they exceed this threshold.
  • Research from Bitmovin highlighted a compelling trend. In the US, over two-thirds of consumers (68%) would pay a subscription fee to an entertainment streaming service to remove ads. In the UK, it was a similar figure, with the majority, 58% (rising to 67% in those aged 18-35), saying they would rather pay that little bit extra to remove ads. The survey also found that the services where viewers are happy to tolerate ads are free streaming services. The research also found that 58% of the consumers in the US and 60% in the UK don’t mind watching advertisement for free streaming services
  • The subscription world isn't without its challenges. Research from Antenna suggests that while there's significant growth in subscribers, there's also a noteworthy churn rate. Even streaming giants like Netflix experienced a surge in churn rate, emphasising the importance of retaining subscribers. 

To summarize, consumer behaviour in the subscription space is dynamic. Understanding these consumer preferences will be critical for determining the future of subscription services. 

Monetizing your content with skara 

Skara is a no-code platform that allows video creators to launch their own video streaming / OTT service app and website within minutes. It follows a recurring revenue business model i.e. you can monetize your content through monthly and yearly subscriptions. 

As a video creator, you can sell your exclusive content with us and establish a direct connection with your audience. 


Overall, when choosing a subscription-based income model, personalization should be at the forefront of your approach. It is critical to understand your target audience's demands and preferences to properly price your content. We cannot ignore the fact that consumers are sometimes unwilling to pay for subscriptions while also becoming increasingly resistant to advertising. To overcome this challenge, consider selling your content for free on a platform like Skara and gradually transitioning to subscriptions. Remember that flexibility, adaptability, and a thorough understanding of your content are the keys to success in the subscription economy.


Q: How does a subscription business work?

A subscription based service charges customers a fee to access the videos on a recurring basis.  

Q: Why do video creators prefer subscription based service?

With a subscription service a creator can forge a deep connection with the audience. A customer becomes a part of the creator's video creation journey that helps the creator build a community of fans over time. 

Q: What is a subscription strategy?

The main strategy is the focus on customer retention i.e the process of engaging the existing customer so that they continue to buy your services. The aim is to create an environment where a single customer does multiple payments for a long period of time.

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