What is an OTT Platform and Why is it Important?
At present, the popularity of OTT platform is increasing rapidly, and it has become an integral part of our daily lives. OTT stands for Over-The-Top, which is a term used to describe the delivery of video content through the internet. It allows users to stream video content on their own devices, such as smartphones, tablets, and laptops. The main reason behind its popularity is that it offers users more freedom and control over the content they watch.
What is OTT?
OTT stands for “over-the-top,” a term used to describe the delivery of video and audio content over the internet without the involvement of a traditional cable or broadcast TV service provider.
OTT services deliver content directly to viewers through the internet using dedicated apps or websites. This allows users to watch their favourite shows and movies on-demand, on any device with an internet connection, without the need for a traditional TV subscription.
OTT services include video streaming platforms like Netflix, Amazon Prime Video, Hulu, and Disney+, as well as music streaming services like Spotify and Apple Music. OTT platforms also offer live streaming of events, such as sports and concerts, and other types of content, such as podcasts.
The popularity of OTT services has grown rapidly in recent years, as more consumers seek greater control over their viewing habits and the ability to watch content on their own terms. OTT services have disrupted the traditional TV industry, and the growth of OTT platforms has led to the development of new business models and revenue streams for content creators.
How do OTT platforms work?
OTT platforms work by delivering video content over the internet directly to the user’s device. The content is streamed through a dedicated app or website, and the user can access it on various devices like smartphones, tablets, laptops, or smart TVs.
OTT platforms are different from traditional TV services because they do not require any physical infrastructure like cables or satellite dishes to deliver the content. Instead, the video content is delivered through the user’s internet connection.
When a user selects a video on an OTT platform, the video is delivered in real-time and begins streaming immediately. OTT platforms use adaptive streaming technology to adjust the video quality based on the user’s internet speed and available bandwidth. This means that the video quality can change dynamically, and users with slower internet connections can still watch videos without buffering.
OTT platforms offer various types of content, including movies, TV shows, original series, live sports events, and more. Users can choose to watch their favourite shows at any time, pause, and resume them on any device. The platforms also offer personalized content recommendations based on the user’s viewing history and preferences.
They generate revenue through various subscription models, such as monthly or yearly subscriptions, pay-per-view, or advertising. The revenue generated by OTT platforms has been steadily increasing over the years due to their growing popularity and user base.
Why Are OTT Apps Important?
OTT (over-the-top) apps are important for several reasons.
- Firstly, they provide a more convenient and personalized way for users to access video content. OTT apps allow users to watch their favourite shows and movies on-demand, whenever and wherever they want, on a wide range of devices. This flexibility and convenience make OTT apps a popular choice for many viewers, especially younger audiences who prefer to consume content on mobile devices.
- Secondly, OTT apps offer a wide range of content that may not be available through traditional TV services. OTT platforms often produce their own original content, which can be exclusive to their app, making them more attractive to viewers who are looking for fresh and unique content. OTT apps also provide access to international content that may not be available on local TV services, which can broaden the scope of the viewer’s entertainment choices.
- Thirdly, OTT apps have disrupted the traditional TV business model, which was based on advertising revenue and subscription fees. OTT platforms have introduced new models, such as subscription-based services, which have led to increased competition and innovation in the industry. This competition has driven improvements in the quality of content, user experience, and pricing, making the industry more consumer-friendly.
- Finally, OTT apps provide a new revenue stream for content creators, which can help to fund the creation of more high-quality content. The rise of OTT apps has also provided new opportunities for independent content creators, who can now distribute their content directly to viewers without the need for a traditional TV network.
Types of OTT Platforms:
Subscription Video-On-Demand (SVOD): SVOD platforms like Netflix, Hulu, and Amazon Prime Video offer users access to a vast library of movies, TV shows, and other content for a monthly fee.
Ad-Supported Video-On-Demand (AVOD): AVOD platforms like YouTube, Vimeo, and Dailymotion offer free content to users, but with ads.
Transactional Video-On-Demand (TVOD): TVOD platforms like iTunes and Google Play allow users to rent or buy movies and TV shows on a pay-per-view basis.
Live TV: Live TV platforms like Sling TV and DirecTV Now offer users access to live TV channels for a monthly fee.
How OTT Platforms are Changing the Industry:
OTT platforms are disrupting the traditional TV and movie industry in many ways. With OTT platforms, new and emerging content creators have a platform to showcase their content, which was not possible earlier. Moreover, OTT platforms are democratizing the video content industry, which is leading to more diversity in the content available.
OTT platforms are also changing the way we advertise. With targeted advertising, it is easier for advertisers to reach the right audience with the right message, which leads to higher ROI.
How does OTT Make money?
OTT (over-the-top) platforms make money through various revenue streams. Here are some of the most common ways OTT platforms generate revenue:
- Subscription fees: OTT platforms often charge a monthly or yearly subscription fee to access their content. These subscription fees can vary in price, depending on the platform and the type of content available.
- Pay-per-view: Some OTT platforms offer pay-per-view options for specific content, such as newly released movies or live events.
- Advertising: OTT platforms can also generate revenue through advertising. They can sell ad space to brands and companies, or display their own ads on their platform.
- Sponsorship: OTT platforms can partner with brands and companies to offer sponsored content, product placements, or other types of sponsorship deals.
- Licensing: OTT platforms can generate revenue by licensing their content to other platforms or broadcasters. For example, a streaming service might license a popular show to a traditional TV network in another country.
- Merchandising: OTT platforms can also generate revenue through merchandising. They can sell merchandise related to their content, such as t-shirts, posters, or other products, to fans.
Benefits of OTT Platforms:
- Flexibility: With OTT platforms, users can watch their favourite shows anytime, anywhere, and on any device.
- Personalized Content: OTT platforms offer personalized recommendations based on the user’s viewing history, making it easier for users to discover new content.
- No Commitments: OTT platforms don’t require any long-term commitments, and users can cancel their subscriptions at any time.
- Cost-Effective: Compared to traditional cable TV, OTT platforms are much more cost-effective, and users can save a lot of money in the long run.
- Ad-Free: OTT platforms offer ad-free content, which is a significant advantage for users who are tired of interruptive ads.
How can you launch your own over-the-top platform?
Launching your own OTT (over-the-top) platform can be a complex process, but here are some steps you can take to get started:
- Identify your niche and target audience: Determine what type of content you want to offer on your OTT platform and who your target audience is. Consider factors such as age, location, interests, and viewing habits.
- Plan your content strategy: Develop a content strategy that aligns with your target audience and overall business goals. This can include creating original content, licensing content from other providers, or a combination of both.
- Choose a technology platform: Select a technology platform to host and deliver your content. This can include options such as cloud-based solutions or on-premises software.
- Develop your platform: Work with a team of developers and designers to build your OTT platform. This will involve designing the user interface, creating the necessary features and functionality, and integrating any third-party tools or services.
- Secure licensing agreements: If you plan to license content from other providers, you will need to negotiate and secure licensing agreements. This can involve negotiating fees, usage rights, and other terms and conditions.
- Market your platform: Develop a marketing strategy to promote your platform and reach your target audience. This can include a combination of online and offline marketing tactics, such as social media advertising, email marketing, and public relations.
- Launch and maintain your platform: Once your OTT platform is launched, you will need to monitor and maintain it to ensure it is operating smoothly and providing a high-quality user experience. This can include regular updates, bug fixes, and ongoing content development.
Launching your own OTT platform can be a challenging but rewarding endeavour. With the right strategy and approach, you can create a successful platform that delivers high-quality content and meets the needs of your target audience.
In conclusion, OTT platforms have changed the way we consume video content, and it has become an integral part of our daily lives. It offers users more freedom, control, and flexibility, which makes it a preferred way to watch video content. With the increase in the popularity of OTT platforms, it is essential for businesses to adapt to the changes and leverage the benefits of OTT platforms to reach their target audience.
Read Next Blog: