Have you heard of OTT before? Is this term familiar to you? Well, maybe you may not know this term but you may already use OTT platforms. What is an OTT platform? OTT stands for Over-The-Top and it refers to the delivery of video, audio, and other media content over the internet directly to viewers. Which is more than the traditional ways of delivering media content to viewers such as cable or satellite TV providers.
OTT allows users to access and stream content on-demand, whenever and wherever they want, using various devices such as smartphones, tablets, smart TVs, streaming devices, and gaming consoles. But how do streaming services make money? What does SVOD stand for and what is its connection with OTT? Here is everything you need to know about OTT as a business.
Definition
As briefly mentioned above, OTT stands for Over-The-Top and it delivers media content directly to viewers. They can easily access this content using various devices. For example, they can use their smartphones which are portable and highly performant these days. Or, they can access it from the comfort of their own home or while traveling on their laptop. You can use all kinds of devices, such as Smart TV, Apple TV, or Chromecast to mirror Mac to TV using a cable or wirelessly. You can learn how to cast from macbook to TV or how to connect a computer to TV easily so that you can stream your favorite TV show. Through a screen mirror, you can connect your Mac to TV, and with the convenient use of OTT platforms, you can watch your favorite documentaries, TV series, sports events, and more. A few of the most popular examples of OTT platforms include Netflix, Amazon Prime, HBO Go, and Disney+.
Revenue Models
Most people have already subscribed to the services offered by OTT platforms. As you may know already as you might be among them, they generally generate revenue through subscription fees. However, advertising is also one of the ways they generate revenue. Subscription-based models (SVOD or Subscription Video on Demand) offer users access to content for a recurring fee, while ad-supported models (AVOD) provide free access to content with advertisements interspersed throughout.
Some OTT platforms offer specific content on a pay-per-view or transactional basis (TVOD). Users pay a one-time fee to access individual movies, live events, or exclusive content. This model is often used for premium or newly released content that is not included in the platform’s regular subscription offering. Examples of platforms using this model include Amazon Prime Video for certain movies or sports events.
OTT platforms may generate additional revenue through merchandising and ancillary products. They may sell merchandise related to popular shows or movies, such as t-shirts, toys, or collectibles. Platforms might also enter into licensing agreements to extend their brand into other consumer products or experiences, further monetizing their content.
Content Acquisition
OTT platforms secure content through various methods, including licensing agreements, partnerships, and original content production. Licensing agreements involve obtaining the rights to stream movies, TV shows, and other content from production studios or distributors. Platforms may also partner with content creators or invest in original productions to differentiate themselves and offer exclusive content.
Content acquisition for OTT platforms refers to the process of obtaining and securing the rights to stream or distribute content on their platforms. Licensing is the most common method for OTT platforms to acquire content. This involves entering into agreements with production studios, distributors, or content owners to obtain the rights to stream their movies, TV shows, documentaries, and other media.
To differentiate themselves and provide exclusive content, many OTT platforms invest in original content production. They develop and produce their own movies, TV series, documentaries, and other media. Platforms like Netflix, Amazon Prime Video, and Hulu have invested heavily in producing original content. Some OTT platforms acquire content libraries, either through purchasing existing libraries or entering into long-term licensing agreements with content owners.
Final Thoughts
OTT (Over-The-Top) businesses are revolutionizing the way we consume media content. These businesses deliver video, audio, and other forms of media directly to viewers via the Internet, bypassing traditional distribution channels. OTT platforms offer a wide range of on-demand content, including movies, TV shows, sports events, and more. They generate revenue through subscription fees, advertising, or a combination of both.
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