Explore the world of OTT and understand how it works

During the COVID-19 epidemic, the digital world saw a significant shift. The popularity of over-the-top (OTT) platforms has spread from cities to the countryside. People can now watch their favorite web series, movies, and TV programs immediately on their mobile phones, removing the need to go elsewhere for amusement. In the short period since the epidemic, 'OTT' has become a vital part of everyone's life, making entertainment widely available to individuals from all demographics. This generates not only cash for people, but also significant revenue for films and online shows.

What is OTT?

The full name for OTT is 'Over the Top'. It is a platform that allows you to view web series, movies, and serials via the internet using an app. OTT platforms provide access to a diverse range of materials. Some OTT platforms charge consumers for viewing material, while others are absolutely free. OTT platforms operate over the internet.

Revenue in billions.

OTT platforms and enterprises worldwide generate revenue models in the millions of crores. In India alone, there are 45 crore OTT customers, which generates 22.62 billion rupees in income for OTT providers. As OTT popularity grows, income is predicted to reach 9.367 billion rupees by 2025, according to Stock Grow research. However, the question arises: how do they earn? Let's look at the full ABCD of OTT revenue.

The OTT business model

TVOD (Transactional Video on Demand): Under this approach, the consumer pays to download material from the platform. For example, if you want to view a web series or movie that is offered for rental on an OTT platform, you must pay the platform to download the material.

SVOD (membership video on demand): In this approach, the customer purchases a membership for a month or a few days and then views their preferred material. You may think of this as paying a monthly membership to watch a movie on an OTT platform. This money is sent straight to the OTT business.

Advertising Video on Demand (AVOD): This is absolutely free. There is no need to pay anything. However, commercials often occur in between the materials. These advertisements cannot be avoided. OTT platforms also profit from these advertisements. This leads to large profits.

The multi-screen model (OTT revenue model) is rather straightforward. If someone owns a smartphone, they can view material on a variety of devices, including computers, televisions, iPads, and tablets. Multi-screen subscriptions are often more expensive than single-screen subscriptions.

Income Sources

In addition to these techniques, OTT platforms generate income via direct advertising. OTT determines when and how much money they may make by displaying which ad to viewers. This aids in developing relationships with advertising, broadening your reach, improving the overall user experience, and increasing profits.

In layman's terms, direct advertising refers to reaching viewers directly on any device. Direct advertising often works directly with advertisers or advertising agencies rather than exchanges or other middlemen. Advertisers often pay to have their advertising shown on OTT platforms, and ad placements may take several forms, including pre-roll ads that run before a video, mid-roll commercials that run throughout a movie, and banner ads that run during a video. The platform's website or app may feature these ad placements.

Business model in simple terms.

Overall, the business model for OTT is fairly straightforward. The platform first spends money to develop or purchase content, then charges viewers or users for such material. Making an OTT platform is a time-consuming operation that, on the other hand, results in a negative cash flow system for businesses. Several platforms, on the other hand, provide payment schemes based on the user's convenience, such as per week, per month, per day, and per year.

Top streaming platforms.

Popular over-the-top (OTT) platforms include Netflix, Amazon Prime Video, Disney Plus Hotstar, Zee5, Sony Liv, MX Player, Alt Balaji, Voot, Hoichoi, and Eros Now. Prime Video, Netflix, Zee5, and Jio Cinema are the next five in terms of revenue after Hotstar.