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The Next Step for SquadOV - Monetization with a Freemium Model

Michael Bao
June 15, 2022 3:12 PM

We are starting the process of rolling out freemium monetization for SquadOV - ending the era of storing videos for free forever on the cloud since we launched in February 2021. In this blog post, I'll explore how we got here, and why we're moving forward with freemium monetization.

History

A bit of history first. I got the idea for SquadOV while playing Valorant with friends in the summer of 2020. We were hard stuck Platinum and couldn't figure out how to improve. Sure, we could just "play more" to improve, but let's be honest, the most effective way to improve as an individual and as a group is to review video recordings. So we tried to do that. That started with trying to record locally using OBS. But then I'd just end up with a 3 hour long video that I have to scrub through with VLC. Painful - plus, not only is it ridiculously annoying to find the right moment, I'd have none of my friend's perspectives as well. The same problem exists with trying to upload VODs to YouTube or Twitch. And let's be honest, for those of us who've tried to record their games using OBS, we definitely have had days where we recorded 0 videos because we forgot to start recording. Fast forward a few months, and that's when the first prototype of SquadOV came out. And in February 2021, it started trickling out to users on the internet. First for Aim Lab, then Hearthstone, before we hit the communities that really took off with SquadOV: World of Warcraft and Valorant.

Today

Today, we have 17,000 users actively using SquadOV every month - a solid amount for a year of tremendous growth. However, along with that growth comes significant costs in the form of cloud storage costs.

Our AWS costs every month.

You can see the first month where we ran out of using AWS credits in March 2022. Unfortunately, spending around $40,000 (and most of it for storage and bandwidth) to serve 17,000 active free users is, unfortunately, not a tenable long-term solution. For context, in April 2022, we recorded 373,568 hours of video which translates roughly to 8.5 hours of new videos per minute. That's roughly equivalent to the amount of new video YouTube was ingesting in its early days in 2008 (note: after it was acquired by Google in 2006 and also back when videos were 480p pixelated monstrosities). So something has to change.

Target Users

However, unlike YouTube, monetizing gaming VODs with ads is not a viable solution. First off, while ads allow the product to be free, the product will ultimately be geared towards selling and/or leveraging your personal data (e.g. to sell more ads). This becomes profitable at massive scales with videos with high view counts. But let's be honest, your Bronze 3 gaming VODs are never getting that many views (sorry). Ultimately, it's a question of who our target "creators" (i.e. the people recording videos on our platform). Are they large influencers who want to share their videos with literally everybody or just an average gamer who probably just wants their videos just for themselves or their friends? With SquadOV Pro, a monthly subscription (with a free tier) that grants you access to higher quality videos and longer storage, I am making a conscious choice to target the latter since the former is not viable without massive influencers with millions of views.

Pricing and Features

In its initial release, SquadOV Pro will come with 4 tiers: free, $5 USD per month, $10 USD per month, and $15 USD per month. For users who have been SquadOV since before monetization, you'll be able login and go to the pricing page to see your user-specific price with a discount as a thank you for using SquadOV over the past year! Over the course of the past year, we've occasionally floated the idea of monetization in various channels - surveys, forms, and even a podcast (thanks Technically PvP!). And the general consensus is that for a good chunk of people, $5 per month seems like a fair price point for what SquadOV offers. Which is why for $5 USD per month, you'll get the same experience as you do now with 1080p 60fps recordings stored forever. In its current form, the $10 USD and $15 USD tiers are for users who want to unlock higher quality and higher resolution videos as well as those who just want to a throw a bit more money our way as a way of saying thank you (I appreciate you!). You'll also get some extra perks in the app and in our Discord. Meanwhile on the free tier, you'll be limited to 720p 60fps recordings that are stored for 7 days. Clips, however, will be stored for free forever. Woohoo!

I will note however that the unlimited storage aspect of the plans may not last forever. I will be monitoring this to see its viability and profitability long term. For reference, both Google One and Dropbox charge $10 per month to allow for a maximum of 2TB of storage, and given that SquadOV automatically records while you play, it's likely that over the course of multiple years, storing things "forever" might not be viable and will need to change to be limited based on total storage space.

There's a lot more to be done with SquadOV and we're going to continuously roll out new features to provide more value to users who have upgraded to SquadOV Pro. And I'd be remiss if I didn't briefly address all our users who use SquadOV internationally (especially in the Philippines and India) or those who just use SquadOV to locally record. Especially for the latter, it might seem strange that SquadOV is gimping your recording quality even though you'll (probably) never upload a single byte to our servers. Unfortunately, I don't have a great answer for you yet, but in the coming months and years, SquadOV will be adding features exclusive to the pro tiers to make the upper tiers more valuable even to our local recording-only users. And for our international users, we are rolling out SquadOV Pro with USD only currently, and I'm well aware that $1 USD is drastically different for users depending on where you live. That'll be something I'm going to be keeping an eye out as I look to prioritize various features going forward so make sure you make your voice heard on our new feedback site.

Rollout

Everyone will be starting out on the free tier which means that your videos will start being deleted from our servers 7 days after they are recorded. For videos already uploaded, you will have 2 weeks after the release of the patch to download the videos you wish to keep around (or just upgrade to SquadOV Pro). The only exception to this are the videos we have stored on Google Cloud (before July 2021 approximately), which we will delete in its entirety to help us consolidate our hosting solutions all in one place on AWS. Note that once your videos are deleted from our servers, we can not help you in recovering those videos even if you upgrade to SquadOV Pro afterwards.

Conclusion

SquadOV Pro isn't the perfect (and even necessarily the final) solution. However, it is the first step into the world of building a viable and sustainable business. If you wish to embark on this exciting journey with me, please do consider subscribing. It really does mean a lot and will go a long way in keeping SquadOV online.

And of course, I'm always on the lookout for feedback so checkout our new feedback site or drop by our Discord and let me know your thoughts!