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Monetizing video

Video is one of the most powerful tools for audience engagement on the web, and it’s also one of the most valuable. Whether you’re a broadcaster, publisher, or enterprise content creator, finding the right strategy to monetize your video content is essential to building a sustainable business model.

In this guide, we introduce you to the fundamentals of video monetization. You learn how advertising and subscription models work, how ads are delivered and tracked, and what tools are available to protect and deliver your content securely. Use this guide to make informed decisions about how to generate revenue from your video content, using flexible strategies to scale with your goals.

Ads, in general

You already know what ads are, but let’s take a quick look at how they work in the context of online video.

Most online video advertising is powered by programmatic advertising, which means ad space is bought and sold automatically. You, as an Arc XP customer, are on the sell side, offering ad inventory (or impressions), and advertisers are on the buy side, look to place ads in front of viewers.

Arc XP’s Video Center helps you deliver those ads to viewers by inserting them into your video content.

Video ad insertion

Video ad insertion, commonly called ad-based video on demand (AVOD), involves inserting ads directly into video streams. Two primary types of AVOD exist: client-side ad insertion (CSAI) and server-side ad insertion (SSAI).

Client-side ad insertion (CSAI)

With CSAI, the ad is loaded by the viewer’s device, not the server. Here’s how it works:

  • Cue marks point where ads can appear (pre-roll, mid-roll, post-roll).

  • When the player hits a cue point, it sends a request to the ad server (like Google Ad manager or SpringServe).

  • The ad server replies to a VSAT response, which is a standardized format for video ads.

  • The player pauses playback, plays the ads, and then resumes the video.

  • Tracking and analytics data is collected during playback.

Because the ad loads separately from the video, it’s easy for ad blocks to detect and block CSAI.

Server-side ad insertion (SSAI)

SSAI works differently than CSAI: the server “stitches” ads into the video before the video reaches the viewer.

  • Arc XP’s Video Center makes a request to an ad-stitcher, which contacts the ad server.

  • If an ad is available, the ad is stitched into the stream and transcoded as needed.

  • The viewer receives a single stream with ads embedded, which is much harder for ad blocks to detect.

SSPs and the ad server

Ads come from two main sources: direct campaigns and supply-side platforms (SSPs). Direct campaigns are pre-arranged deals between publishers and advertisers, while SSPs manage inventory and auction ad slots to the highest bidder.

Here’s a simplified flow:

  1. A viewer starts watching a video.

  2. The player sends an ad request to the ad server.

  3. The server checks for direct deals. If none exist, the server sends the request to SSPs.

  4. SSPs reach out to demand-side platforms (DSPs).

  5. DSPs evaluate the user and bid in real time.

  6. The highest bid winds, and the ad is delivered to the video.

This process takes milliseconds and is how most web video ads are delivered.

Ad blocking

Ad blocks are constantly evolving. CSAI is easily blocked by browser extensions and is quickly falling out of favor with video providers. SSAI was developed as a workaround, but even SSAI can now be blocked in some cases (for example, uBlock Origin).

The battle between platforms like YouTube and ad blockers continues, with browser-level restrictions being introduced to limit blocking.

For publishers who rely on ad revenue, SSAI offers the best protection against ad blocking.

Over-the-Top (OTT) platforms (like Roku, Fire TV, and smart TVs) are even harder to block, which is one reason they’re popular among video publishers.

Subscription-based video

Subscription-based video is subscription on demand (SVOD). Think Netflix, Disney+, and so on. Subscribers pay for access, and in return, they get content, sometimes ad-free, sometimes not.

Subscription content is protected by Digital Rights Management (DRM), which does two things:

  • ensures only authorized users can view the content.

  • prevents piracy by encrypting the video.

Here's the DRM workflow:

  1. During video preparation, the content is encrypted using DRM keys.

  2. When a subscriber plays the video, the player checks with the DRM service to confirm the user has access.

  3. If authorized, the DRM service provides a license to decrypt and play the video.

Note

Arc XP’s Video Center does not currently support DRM, but if you’re interested in this functionality, visit our Ideas Portal to let us know.

Learn more

Arc XP’s Video Center gives you the flexibility to monetize your videos through both advertising and subscriptions.

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