An OTT platform is an outlet for delivering content directly to viewers, without going through a cable or broadcast media company.
It gives creators more flexibility in the types of content they want to produce, as well as wider control over their data and processes.
What is OTT, Anyway?
OTT stands for “over-the-top”. It’s a type of streaming service offered via the internet, bypassing traditional content delivery methods like cable, satellite, and broadcast.
Most people think of video on demand (VoD) when they think of OTT, but a variety of content can be delivered via an over-the-top platform.
- Audio (Spotify, Apple Music )
- Messaging (WhatsApp, Telegram)
- Visual media like digital books and comics (Panel Syndicate)
- Voice calls (Skype)
- Video (Netflix, Hulu)
Many platforms provide more than one type of OTT content. For example, WhatsApp users can send messages, make voice calls, or hold video calls.
There’s a growing market for VoD in particular. America is one of the largest consumers with more than half the population using over-the-top platforms daily. It’s a truly global trend, though: households with WiFi watch an average of 100 minutes per day of OTT VoD.
How are they getting their video? There are two main ways to get around the cable box:
OTT Device
Users plug into a dedicated device to view OTT content. This doesn’t mean a computer or mobile device. Over-the-top devices could be a Smart TV, Roku, Firestick, or even a game console.
Internet-based OTT
This is OTT with no third-party hardware involved. Users log on through a computer, smartphone, or other mobile device to access their OTT content. Hulu, Netflix, and creator apps are all examples of internet-based OTT.
What Are Some Benefits of OTT?
As attractive as OTT is for viewers, it’s winning even more support among creators. There are unique advantages to owning an OTT platform.
Flexibility is a major bonus. OTT platform owners create what they want to make, when they want to make it.
They can hold live events, post original content, curate forums, and shape their platform however they see fit.
The customization possible with OTT appeals to many creators who have been frustrated by network interference.
By owning an OTT platform, those creators can tailor content to their fanbase instead of having to find a middle ground between personal style and network pressure.
Access to an audience is something that’s been restricted by traditional networks for a long time. Over-the-top bypasses that roadblock.
Creators have direct potential access to anyone with an internet connection.
In the usual course of things, actual creators don’t have a lot of control over their content once it’s been sold or released.
There is a massive web of producers, network executives, and agents to be consulted on major decisions.
OTT platforms give that control back to creators, with full data transparency and final say in advertising partners, subscription levels, and content style.
Plus, constant feedback allows creators to rapidly adjust their strategy to provide a better customer experience.
Of course, there’s no denying that the lower cost of OTT is behind its rise in popularity. Building your own over-the-top platform lets you take advantage of existing internet infrastructure rather than having to build your own from scratch.
That infrastructure is already in place and maintained by internet providers.
Content creators who choose an app as their OTT platform can build in scalability from the start.
They pay only for what they need at first, with the power to scale up as their audience grows.
Finally, established over-the-top platforms generate ongoing revenue for their creators. With fewer middlemen involved, there’s also a much more favorable split of that revenue.
A creator might only have to split revenue with their development partner, for example. It’s a highly functional model for profit-minded creators.
How To Make Money With An OTT
Where does the money actually come from with an OTT?
Platforms generally follow one of three models.
Subscription video on demand (SVOD)
Viewers pay a regular subscription fee to access content. There might be subscription tiers, where the lowest tiers have ads and higher levels are ad-free. SVOD provides a consistent revenue flow. However, “subscription fatigue” can complicate subscriber acquisition.
Advertising video on demand (AVOD)
Use of an AVOD platform itself is free for viewers. The model is supported by ad revenue from ads either overlaid on the interface or shown during videos.
Plenty of advertisers are following viewers to OTT; digital ad spend on OTT should reach $5 billion this year.
It’s much easier to grow an audience when they’re not paying for a subscription, but there is a higher burden on the creator to manage their advertising partners.
They have to find a content-to-ad balance that audiences will accept, which can be tricky.
Transactional video on demand (TVOD)
Viewers pay one-time fees for specific content (like pay-per-view). This can be used alone or in tandem with AVOD.
For example, a singer with an AVOD-based app might offer an exclusive virtual concert and charge a one-time fee for the event.
There’s less consistent revenue with TVOD but also less commitment to a specific production schedule.
It’s mainly used for special events or as an addition to other models.
Putting It All Together
Still have questions? Convinced there’s a case for over-the-top, but not sure how to get started?
Let us take you through a demo of one of the custom OTT platforms we’ve built for clients.
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