Background and challenge

A leading U.S. media conglomerate was preparing a product and go-to-market strategy for its new direct-to-consumer over-the-top (OTT) offering. The company had valuable intellectual property, but had yet to establish a strong presence among consumers in the OTT marketplace.

The company enlisted L.E.K. Consulting to determine the optimal product configuration and develop a business plan for the ad-supported tier of its proposed OTT service.

Approach and recommendations

We conducted a robust evaluation of the advertising video on demand (AVOD) opportunity, assessing demand from both advertisers and consumers.

To assess advertiser demand, we conducted an interview campaign to understand demand for premium AVOD ad inventory (both traditional and innovative formats) and best practices for ad-supported platforms.

To assess consumer demand, we conducted a conjoint survey to test consumer adoption of the service based on a range of attributes (e.g., content, price, ad load, types of ads). We also created a detailed simulation model to estimate AVOD revenue under 35,000 different permutations, including both advertising and subscription revenue, and accounting for cannibalization of existing/other planned linear and OTT services.

In addition, we benchmarked existing OTT services to establish norms and best practices for AVOD products (e.g., content, price, ad load/ad types).

Our work culminated in the creation of a business plan for upper management, which included recommendations on the optimal product configuration and detailed next steps for the go-to-market strategy.


We provided a detailed evaluation of the different strategic options for an ad-supported OTT service, a clear recommendation and business case for the optimal product configuration, and next steps for the go-to-market strategy. This gave the client the confidence to move forward to the next phase of strategic and product development.

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