OTT
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This article is written by Shivani Garg, pursuing a Diploma in Business Laws for In House Counsels from Lawsikho.com.

Introduction

It can be rightly said that the 21st century is all about innovation and new with all kinds of generations happily involved. This century has brought life to the media culture that was impossible to even think about back when it all started or even in the 90’s if we say. It was only in 2008 when India launched its first OTT platform named BIGFlix, while one of the most popular American OTT platforms today Netflix had already spread its wings around. Now, in 2020, OTT platforms are blooming like the craziest thing all around the world. Well, not to ignore this year pandemic COVID-19 made a huge contribution to spread it like fire in a forest. It would be interesting to know about the things that relate to this OTT platform along with the concept of starting one of your own.

Let’s see what exactly this OTT platform means. OTT, the acronym, stands for Over-the-top which indicates streaming across different devices, irrespective of the location and whenever we want is possible. This media service is quite popular as it bypasses cable, broadcast, and satellite television platforms. However, this term OTT, does not imply it is cost free, as we now know that the term encompasses services such as Netflix, Amazon Prime etc. Over the top refers to films and television content provided via a high-speed internet connection. 

“Necessity is the mother of invention”- Plato

As OTT service gained so much in popularity along with profitability, especially with younger audiences, there has spurred a wide range of competition. Although these platforms started with streaming old movies and TV programs initially, but later they started developing their own original contents too, which includes series as well as movies to stay as well as stand out in the market and attract more audience. For any of the services like Netflix, Amazon, Hulu, etc., people just have to subscribe to the channels with monthly or yearly packages according to their needs and choice. Well, it literally was the answer to one of the questions in any person’s head, ‘I only watch four channels. Why do I need to pay for over 500?’

What are OTT platforms and how do they work?

OTT platforms are the way of delivering all the films and TV contents that are made out there over the internet without the need to local cables or satellite TV services. In plain language, people instead of paying for TV cables and stuck in one place to watch the content, now they have to pay for the internet to watch their choice of thing from anywhere. You see, the catch about OTT is the accessibility of its content, which becomes one of the many reasons for its popularity as its customers only require an internet connection and a compatible hardware device, to stream OTT, namely – Mobile OTT Devices (iOS and Android), Personal Computers/Laptops, Smart TVs. The users can access curated content at any time with a monthly or yearly subscription for these services. Not only OTT streaming has changed the way we get television, but it has also changed the way we watch it too. Isn’t that really fascinating for the generation full of curiosity to bring success like a piece of cake? Not just that, there are various types of OTT platforms available out there which gives the option to every person to choose according to one’s own personal choice. 

Who doesn’t like a variety to choose from, especially when it comes with affordable prices? We can all give the credit to NETFLIX who started this OTT phenom.

Types of OTT platforms

Listed below are the few OTT platforms that can be expected in future.

  1. News OTT Platforms
  2. Political OTT Platforms
  3. National OTT Platforms
  4. Yoga OTT Platforms
  5. Entertainment OTT Platforms
  6. Music OTT Platforms
  7. Gaming OTT Platforms
  8. Kids OTT Platforms
  9. Travel OTT Platforms
  10. Technology OTT Platforms
  11. Startup OTT Platforms
  12. Business OTT Platforms
  13. NBA OTT Platforms
  14. Sports OTT Platforms
  15. Cricket OTT Platforms

Choosing a business model

Startups don’t fail because they lack a product, they fail because they lack customers and a profitable business model. – Steve Blank

Choosing a business model for OTT platform can be a tough challenge as you need to analyze the various business models that are already in the market and then choose one which serves your purpose as well as brings money home. You need to customize the monetization model according to your requirements and goals. I have listed a few of the models for video on demand services:

Advertising Video on Demand (AVOD)

  • As the name states, it provides its viewers content for free, but along with advertisements like YouTube. Yes, the main source of revenue for YouTube is advertisements.
  • This one is great for VOD businesses who have a huge amount of user base and an impressive number of views and engagement.

Subscription Video on Demand (SVOD)

  • Giving unlimited content for a subscription until validity allows, this model is one of the most successful models picked up by many OTT businesses. Some of the popular examples of this model are Netflix, Amazon Prime, Hulu, Hotstar, etc.
  • This model is the best for VOD businesses that mainly focus on content, including entertainment, health, fitness, eLearning, or something engaging with long-term value. 

Transactional Video on Demand (TVOD)

  • Also known as pay-per-view is a video monetization where users just have to pay for the videos they want to watch like iTunes, Google Movies and YouTube Movies are a few examples. This model is great when you have some exclusive content to offer.
  • The model works on two bases, either on the Electronic sell-through (EST) or Download to own (DTO) basis.

Hybrid Video on Demand

  • This model is the combination of two or more models discussed above. A strategic combination of AVOD, SVOD, and TVOD monetization model can help you make money with your OTT content. The example of this model is YouTube which is a combination of all models in one.

Essential elements for setting up

Three elements for a successful OTT business are:

  1. Experience: which is to manage and optimize high-quality of content and ads
  2. Content: get a proper sense of distribution, marketing and production of video content
  3. Monetization: reduce subscriber churn, drive ad-based revenue

All the decisions made must be data driven for setting up OTT platforms successfully but one needs to keep in mind the legal parameters too that already persists.

Basic steps for OTT app development 

  1. Setup: basically, configuration of the app like branding, logos and colors, along with how you’ll monetize it.
  2. Technical build: Here, all components decided during setup are compiled into a downloadable OTT application.
  3. Test: QA (Quality assistance) the app. This is the step where you review your app for functionality and CX (Customer Experience- marketing talk among people). Testing includes coding and other basic things like structuring, organizing the content in a way that looks great on the platform and smooth to use.
  4. Submission: Most crucial steps are where your app can be accepted or rejected, depending upon the norms of the platform. The review can take a few days to a few weeks, depending on the platform. If the app is kicked back to you by any of the platforms, then there are few more steps that need to be done.
  5. Revise: Repeat step 2 to implement the requested changes.
  6. Retest: Repeat your step 3 to QA the new build and recheck your CX.
  7. Resubmit: Click your heels three-four times, send the app back to the platforms. You are good to go!

While developing OTT apps, one needs to keep in mind the legal obligations that already exist so that things go smoothly even at a later stage.

Legal and regulatory compliances

  • In India, with government’s control over the contents that is being broadcasted on OTT platform is still in debate, the Internet and Mobile Association of India (IAMAI) is already setting up a self-regulatory body to keep its eye on the content of OTT platforms as various platforms has faced multiple objections on airing of uncensored contents. The content provides code that is already released and has been signed by OTT platforms like Hotstar, Voot, Jio and SonyLIV.
  • The Digital Content Complaint Forum (DCCF) will be held responsible to address all the complaints from the viewers.
  • It is the duty of DCCF to acknowledge the complaint that is being made within three working days and further, resolve it in 10 days from the date of receipt.
  • According to this draft content code, it will apply and extend to all members of the online curated content industry, who are signatories to this code and agree to abide by and also affirm the principles and norms contained within this code.
  • Also, the OTT platforms will be held liable for non-compliance of the code.
  • Further, there is a financial penalty of Rs 3 lakhs imposed on defaulters.
  • The first version of the code is signed by Netflix, Hotstar, Voot, Zee5, Arre, SonyLIV, ALT Balaji, Jio and Eros Now.

SaaS V. SaaP

Both these terms refer to the software solutions that are developed by a third party that you have to pay for to download and use. The term ‘SaaS’ here stands for software for a service and ‘SaaP’ term stands for software as a product. 

  • SaaS solutions are basically the subscriptions ones where you pay on the monthly basis to use the third-party software program. In this solution, cost covers both the usage of the software along with its maintenance. SaaP solutions work like once in a lifetime payment, where you buy a license by paying for that once to download and then use throughout your life.
  • In SaaS, the cost depends on the usage as per the month. In SaaP, once you pay for and download the solution, you will own it.
  • SaaP solutions provide more freedom when it comes to the usage along with that it saves the costs of upgrades as it’s completely one’s choice whether to do it or not. In SaaS solutions, updates and upgrades are available to you providing more future proof. It can be updated alongside new hardware and emerging cybersecurity risks.
  • SaaS is basically the popular choice for both businesses and providers because of its flexibility and usability.

Content creation and uploading

Well, when it comes to OTT platforms, creating a content and its upload doesn’t require the kind of money you require to create the platform itself nor does it need a huge audience. OTT is now ripe for niche content that’s focused on a very particular audience with very particular interests. Hence the content is created keeping in mind that particular audience to make the talk among the people. 

The big entertainment companies usually charge less per subscriber due to the increase in competition, and there happens to be a significant subscriber churn as well.

Even when the subscription cost for a niche channel is low, once the user chooses to subscribe, they stay subscribed. That gives the niche content creators a stable, recurring revenue stream.

Monetization

Literal meaning monetization is the process to turn a non-revenue-generating item into cash. Website owners monetize their websites by making rooms to advertisers, thereby earning payment from various types of contents published on their sites.

There are certain ways you can monetize your video without relying totally on YouTube:

  1. Barter exchange: Does this name take you back to the stone age? It’s just like that. You can monetize your videos by sponsoring a third-party product or service in your video and getting another business to mention your offerings in their video. You can relate to the concept of bloggers that has become popular in the last few years.
  2. Affiliate marketing: all must have heard of the commission system. This is exactly the same thing, link outside products and services in your video content and take commission on every purchase or click, whatever your agreement says.
  3. Gated content: by providing digital downloads like e-books, short films and so on to your audience.
  4. Selling your merchandise: Bhuvan Bam, known for his self-deprecating humor on video, sells hoodies with captions like “I don’t know” and “well-intentioned,” along with sweatshirts and t-shirts with equally witty messages. The merchandise captures his awkward yet confident personality effectively.
  5. Content syndication: In this, one can partner up with TV channels, local operators, to reach to more audiences and generate more money out of it.
  6. Your video streaming apps and website: through ads, subscription, one-time sales and the combination of these three models, you can monetize.
  7. Social media watch: like on fb, Instagram by giving ad breaks and Brand Collabs Manager.

So, what happens is that you bring the audience to your native OTT app and convert your viewers into paying subscribers. Once the monetization is sorted and in order, another important aspect is launching and promoting.

Launching and promoting

While launching and promoting your OTT platform or videos, there are some basic and most important things you really need to keep in mind to make it a big success.

  1. Give your audience what they want and are literally looking for.
  2. Grow and scale out your business:
  • Growth
  • Churn
  • Lifetime value
  • Average revenue per user (ARPU)

Things that will make you sure that you are launch ready:

  1. Work very thoroughly on the content: content that serves the niche audience.
  2. Make content strategy: ways to keep your audience involved and not lose the interest.
  3. Customer acquisition strategy.
  4. Existing customer base.
  5. Subscription/pricing strategy. 

Why OTT platforms are better than cable?

  1. They offer more options for the content you really want, consumption is personal.
  2. It is a way to be in more places all at once, you know, stream anywhere.
  3. OTT is literally ‘out of box’.
  4. It provides with consumer freedom, granularity of choice is what we call it.
  5. Multiscreen Solutions for the Digital Generation.
  6. Benchmarking the H.265 Video Experience.
  7. Ads Free Content. 

Let’s check out what all OTT platforms are making their mark till now.

Top OTT platforms in India

There are currently 40 providers of over-the-top media services in India out of which the leading ones are given below:

  1. Amazon Prime Video: launched in 2016, it is available in six Indian languages.
  2. Netflix: comes with three subscription plans including Basic, Standard HD and Premium Ultra HD.
  3. Disney+ Hotstar: owned by Novi Digital Entertainment, it features two paid subscription plans- VIP and Premium.
  4. Voot: An Indian subscription video on demand (SVOD) service that launched in 2016 and only available in India.
  5. ZEE5: launched in 2018 with content in 12 languages is run by Essel Group via its subsidiary Zee Entertainment Enterprises.
  6. Sony LIV: owned by Sony Pictures Network India Pvt. Ltd., it is the first Indian OTT media service platform to produce music content for a Hollywood feature film (Passengers) – producing the Hindi version. 
  7. MX Player.
  8. ALT Balaji: owned by Balaji Telefilms Ltd. is available across 32 different interfaces to its viewers. It is claimed by their website that the platform is the largest content bank seen in India.
  9. Eros now: launched in 2012, it is owned by Eros Digital.
  10. Arre.

Conclusion

With the coming of OTT content, services such as Netflix, Hulu and others, subscribers could finally disconnect themselves from linear television, and they could just download what they wanted (i.e. any content), when they wanted (i.e. any time) with the luxury to watch whenever they desire. There is no doubt American culture literally brought something way too cool. Further, it has been stated about subscribers for OTT services that, “If the subscription fee is set out correctly, consumers’ perception of being able to access any content outweighs the value of ownership.” According to Cisco,it is expected that online video will make up more than 82% of all consumer internet traffic, which is 15 times higher than what it was in 2017- by 2022. If one is planning to get into OTT business, he/she has to be very thorough while analyzing the various aspects steps taken to launch the platform to make it a success. Due to COVID-19, OTT platforms turned out to be a game changer for the media industry as every movie is now launching on these platforms only as the result of that subscription charges have increased. 


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