Summary:

Here’s a news story we don’t get to hear all that often: Live streaming provider Livestream won’t show any ads anymore on any of its new live streams – even of the producers don’t pay for them. But the company still has a plan to make money.

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Do you hate pre-roll ads? Then this story is gonna make you happy: Live video streaming provider Livestream is ditching any and all advertising on its new entry-level live streaming tier. The company is now offering event producers and other video broadcasters a chance to stream their video feeds for free on Livestream, without any pre-rolls, interstitials and overlays. It’s a pretty bold move, and one that marks Livestream’s most significant step towards a new business model.

Livestream has been offering ad-free live streaming in the past, but for a fee: Customers until just a couple of months ago had to pay at least $269 per month to remove ads from their streams. The company also offered free streams, but monetized them through a variety of ad formats, including pre-rolls interstitials that would interrupt a live performance. “We don’t think the viewers are enjoying that experience,” Livestream CEO Max Haot told me during a video chat Monday, adding that overlays often feel spammy. “The user experience is really subpar,” he said.

But what really caused Livestream to move away from advertising was the success of other social platforms, including Instagram, Facebook and Twitter. “None of these are plastered with banners,” said Haot. But all of them have tons of users, and often a lot of valuable knowledge about these users.

Livestream’s future: native monetization

Livestream now wants to follow the example of these successful social platforms. The key to generating revenue in such an pre-roll-free environment is native monetization, Haot told me. Much like Twitter is getting paid to promote accounts and tweets, Haot is envisioning a future in which Livestream can make money through promoting publishers and their events.

Of course, this only makes sense if the company has lots and lots of publishers as well as users, which is where the free and ad-free plans come in. The free service tier comes with two caveats: Users have to get a Livestream account to tune in, and publishers can’t embed these streams on their own sites, but rather need to broadcast through Livestream’s platform. That way, Livestream wants to become a destination site for live events.

The idea of such a completely different business model for Livestream has been long in the making. The company launched a new live streaming platform with a cheaper premium tier eight months ago, and is slowly shifting its promotion from its legacy plans to the new platform. Getting rid of ads for free streams was an important next step in that transformation, explained Haot. Now it’s about growth, and in a couple of months, Livestream might start to experiment with native monetization, he said, adding: “We don’t get paid by adverts, we get paid by users.”

Image courtesy of (CC-BY-SA) Flickr user Sweet One.

Disclosure: GigaOM has a business relationship with Livestream.com for delivering live video content from its events.

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