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License Types (Ad-Supported, Subscription, and Transactional)
License Types (Ad-Supported, Subscription, and Transactional)

How our Channel partners generate revenue.

Alan d'Escragnolle avatar
Written by Alan d'Escragnolle
Updated this week

3 MIN READ

A license type is the way in which a Channel generates revenue from the end consumer. Our Channels monetize via three license types: Ad-Supported, Subscription, and Transactional. Each has its own revenue model and payment allocation process.

In this guide:


1) Ad-Supported

“Ad-Supported” means access to Titles on an exclusively advertisement-supported basis. Below are examples of Ad-Supported business models:

  • ⏯️ AVOD (Ad-Supported Video on Demand)

    • AVOD channels are free to consumers, but they need to watch advertisements. The channel generates its revenue through advertising that is shown before (pre-roll) and/or during (mid-roll) a view of your title.

  • 📺 Digital linear television

    • Digital linear television is a broadcasting technology that transmits Shows and Movies in a digital format.

    • It is called "linear" because the content is broadcast in a pre-programmed schedule, which means that viewers can only watch what is being shown at that particular time.

    • This is different from on-demand services, which allow users to watch content whenever they want.

  • 🆓 Free Ad-Supported Television (FAST)

    • FAST is a type of streaming service that allows users to watch television programs and movies without paying for a subscription. Instead, the service is supported by advertisements that are displayed during the programming.

Examples of Ad-Supported Channels:

  • Cineverse

  • Freevee

  • Tubi


2) Subscription

“Subscription” means access to Titles on a subscription basis for viewing over a finite period of time. The subscriber may be the Channel and/or the end user. Below are examples of Subscription business models:

  • 💳 SVOD (Subscription Video on Demand)

    • SVOD Channels charge a flat rate fee (usually monthly) to users for access to a collection of titles. This allows the user to watch any content available on the channel without any additional charges.

  • ✈️ In-flight and other transportation access

    • In-flight Subscriptions refer to the access to titles on a subscription basis for viewing during a flight or other transportation. It allows passengers to watch movies and shows during a flight by paying a subscription fee to the airline or transportation company. This service is usually provided by airlines to enhance the in-flight entertainment experience for their passengers.

Examples of Subscription Channels:

  • Amazon Prime Video

  • FuboTV

  • Revry


3) Transactional

“Transactional” means access to Titles for viewing pursuant to payment of an a la carte fee, where the access duration may be over a finite or indefinite period of time, including theatrical, pay-per-view, electronic sell-through (EST), and download to own (DTO). For clarity, the a la carte fee may be paid by the Channel and/or the end user. Below is an example of a Transactional business model:

  • 💸 TVOD (Transactional Video on Demand)

    • A TVOD Channel charges a user for either the right to limited views (rental) or unlimited views (purchase). 

      • Rental: Renting a Movie or Show on a Channel usually allows consumers to stream as often as they want but for a limited time, typically 24-48 hours after they start watching.

      • Purchase: Buying a Movie or Show usually grants the consumer an unlimited streaming period on that channel. Sometimes channels allow Download to own, where the title is downloaded to the local computer/device, often in a DRM-protected format.

Examples of Transactional Channels:

  • Amazon Prime Video

  • Apple TV

  • Vudu


💰 How Producer Earnings Are Calculated By License Type

💡 Important Note: There is no universal standard for how earnings payments are calculated. We can provide you with guidelines that will help you better understand the process. We are unable to provide specific details on Channel Payment schemes for contractual reasons.

Also, if we published these it would give us less leverage in negotiating higher pay rates for you.

How Ad-Supported revenue is calculated

  • Generally, Ad-Supported rates are expressed in CPM (cost per thousand impressions).

  • The CPM rate is multiplied by the number of CPM units.

  • For example, 100,000 impressions at a $10 CPM would equal a $1,000 total price.

  • Ad-Supported Channels typically show multiple ads every time your title is watched.

How Ad-Supported revenue is allocated

There are two basic models for the allocation of Ad-Supported revenue.

  • Individually: Payment is calculated based on the number of impressions watched during views of your title. (Impressions multiplied by CPM).

  • Collectively: All Ad-Supported revenue for all titles is pooled and then allocated by the channel to each title based on the amount each title was watched compared to all titles.

How Subscription revenue is allocated

There are three basic models for the allocation of Subscription revenue:

  • Time Watched: Filmhub negotiates an hourly rate for titles watched on a Channel. The Channel then pays based on how long each title is viewed.

  • Pooled: The Channel pools all subscription fees, which are then divided between the Channel and rights owners at a rate negotiated by Filmhub. The rights owners’ pool of money is then allocated to each title based on how much it was watched relative to all other titles.

  • License Fee: Filmhub negotiates a flat license fee that allows a Channel to license a title for a specific period of time (for example, one year). License fees are generally paid in installments.

How Transactional revenue is allocated

Whether Transactional revenue is for a rental or for a purchase, the amount paid by the user is divided between the Channel and the rights owner based on rates negotiated by Filmhub.

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