If you want to understand the importance of OTT for your business, then you must read this article first. This article will teach you what OTT is, how OTT works and why it’s important for your business. It also discusses the challenges of launching an OTT platform and how to create one for your brand. In addition, we’ll discuss why OTT is the next big thing and how it’s the best for your business and what exactly the future of OTT looks like. So without further ado let’s jump into the basics.
What is OTT?
OTT stands for Over-The-Top content distribution channel (Read: streaming service). It is a streaming platform that allows users to watch content directly on their device, and it can be accessed through a web browser or by using an application on their phone or smart TV. OTT platforms have become very popular in recent years—with hundreds of millions of people using them every month. This has caused many traditional TV networks to begin exploring ways to launch their own OTT services.
In the modern era of entertainment, consumers can sign up for streaming services like Netflix or Spotify, which deliver their services over the internet rather than through a cable provider. The cable provider now only provides an internet connection and has no ability to control what you consume. This differential revolutionized the way we consumed content as well as created big implications for advertising strategies as brands found another way to target their consumers. This time through the web rather than the traditional means of targeting via cable television.
History of OTT Platforms
The origin of the OTT concept came into play with the breakthrough in the traditional television broadcasting system, when in 1994, DirectTV made history as the first satellite TV service. In the next eight years, cable providers invested US $165 billion to upgrade their networks to support high-speed internet. Such advancements were nothing but the foundation stones for the future OTT sector. Within the next few years, the emergence of American media service provider and production company Netflix was another important milestone denoting the origin and evolution of the OTT concept.
Founded by Reed Hastings and Marc Randolph in 1997, Netflix first started as a dedicated subscription-based service for end-users where the audience could access unlimited video content at $19.95. With time, it started drawing even more customers. In 1999, Netflix witnessed 239 million subscribers sign up and its video library was expanded to more than 3000 titles. While Netflix has left a significant mark in the history of OTT rise and growth, the emergence of other players has made this sector more potential than ever.
With time, several other sectors have come into the picture to cater to the growth of the OTT industry such as –
Media & Entertainment
IT & Telecommunication
Education & Training
Health & Fitness
To name a few.
Apart from catering to the core entertainment requirements, OTT platforms hold the ability to outperform traditional television broadcasting due to their widespread use cases. Let’s have a glimpse at some of the key OTT statistics to estimate the high potential of the OTT sector.
The number of global OTT viewers is expected to surpass 3.508 billion by 2027
The OTT user penetration is over 35.5% in 2022 and is subject to reach over 44% by 2027
The average revenue per user in the OTT video segment is set to reach US $ 480.40 by the end of 2023
The overall OTT media revenue is predicted to reach over US $224 billion by 2027
Benefits of OTT Platforms
OTT (Over-The-Top) platforms have gained significant popularity in recent years, and there are several reasons why you should choose them over traditional methods of content consumption. Here are some reasons why you should ditch linear TV and choose OTT platforms:
1. OTT Viewing Experience Over the Traditional Cable TV
Overall, the convenience, content variety, personalization, and flexibility offered by OTT platforms have made them a popular choice for many users, leading to a significant shift in the way people consume entertainment media.
2. OTT Leverages Businesses and Enterprises
The trend of OTT is also expanding its reach to enterprises and facilitating them to communicate with each other for an affordable cost and sometimes at no cost. OTT services play a critical role in holding businesses and enterprise-level apps. Also, they offer some exclusive features that attract viewers and flexibly accentuate business growth.
3. Data Transparency and Micro-Targeting
While traditional TV consumption metrics were based on larger sample sizes and interpreted data, OTT advertising is more transparent regarding who is watching the delivered content. Not only the OTT service providers can know who is watching, along with other valid data but also know what they are watching when they are watching, and on what device they are watching. This gives the ability to target your ads very specifically to garner the highest rates of return.
Further, viewers like the ability to choose and feel to have more control or their media consumption including the ads they view. Most OTT media companies offer the ability for viewers to choose between potential ads during an upcoming content break. This not only leads to a better sense of engagement by the audience but also allows your message to reach them better.
4. Content Variety
OTT platforms offer a wide gamut of content to choose from, including movies, TV shows, documentaries, web series, and more. They have extensive libraries that cater to each and every genre and interests, from sci-fi to magic realism allowing users of different tastes to access a diverse selection of content from around the world at the flick of a button.
5. Convenience and Flexibility
One of the primary advantages of OTT platforms is the convenience and flexibility they offer. Users can stream content anytime, anywhere, as long as they have an internet connection. Waiting to watch their favorite shows on primetime is a thing of the past now. Users now decide what content to watch at their own sweet time making them the masters of their own mind when it comes to OTT. They can access their favorite shows and movies on-demand, without being tied to a specific broadcasting schedule. Additionally, many OTT platform providers like Muvi provide cross-device compatibility, allowing users to watch content on smartphones, tablets, computers, smart TVs, and other devices.
6. Original and Exclusive Content
Here’s where OTTplatforms rule- churning out original content that cannot be accessed anywhere else. OTT platforms have invested heavily in producing original and exclusive content. These platforms often collaborate with talented actors, directors, and writers to create high-quality shows and movies that are not available on traditional television or cable networks.
7. Personalized Recommendations
OTT platforms employ sophisticated algorithms to personalize the user experience after analyzing various metrics like viewing habits, preferences, and historical data to offer tailored recommendations based on individual tastes. This personalized approach enhances user satisfaction by suggesting content that aligns with their interests, making it easier to discover new shows or movies they might enjoy.
OTT platforms lets you watch premium content at a minimal subscription plan providing users with the flexibility to choose a pricing option that suits their budget. Compared to traditional cable or satellite TV subscriptions, OTT platforms can be more cost-effective, especially when considering the range of content available and the ability to cancel or change subscriptions at any time.
9. Ad-Free Experience
Many OTT platforms provide ad-free streaming experiences, which can be appealing to viewers who prefer uninterrupted content consumption. By eliminating commercials and ads, users can enjoy their favorite shows or movies without interruptions.
10. Cloud Hosting
Most of the OTT platform providers are using Amazon Web Service (AWS) cloud services as their premier cloud storage component. The cloud-based solution helps businesses in launching the OTT platform to extend the scalability and consumer engagement to magnify business revenue. Some solutions also come with integrated CDN which offers great performance on a real-time basis.
Overall, the convenience, content variety, personalization, and flexibility offered by OTT platforms have made them a popular choice for many users, leading to a significant shift in the way people consume entertainment media.
Why is OTT Better than YouTube?
Many of you might be wondering if we can watch free content on YouTube and even host content for free rather than subscribing to OTT channels. Although YouTube can be a popular choice for beginners who want to reach out to a huge section of the audience for free without investing too much initially, there are a lot of security concerns as well as branding limitations making YouTube a not so great choice for serious streaming professional who want to make it big in OTT streaming business. Here’s why OTT platforms are a much better choice than YouTube:
- Tighter Security– Undoubtedly, a professional online video platform is equipped with tight security like access control, encrypted streaming, dynamic watermarking, password protection, DRM, domain control, etc that protects your exclusive content from the prying eyes of hackers. All these premium security features are not available in YouTube making your content open and free for hackers to tamper with.
Muvi One is equipped with security features and Studio Approved DRM that help us protect your platform and media assets and your users from various security threats.
- Customization and Branding– YouTube will not give you desired customizations or enhance your brand name. In contrast, creating a video streaming website/app would showcase your brand name by incorporating your own branded video player that would allow you to incorporate custom branding and colors.
- Monetization– Video monetization is one of the most important features for a content creator. Professional video platforms have multiple content monetization methods including subscriptions, ad-based and PPV.
Muvi One lets you monetize your content through subscriptions, ads, PPV and even using a unique method like donation monetization! For more information check out Multiple Monetizations.
- Availability of Licensed Content– OTT platforms often have partnerships and licensing agreements with major studios and production companies, allowing them to offer a wide range of licensed content. This includes recent movies, popular TV shows, and classics. While YouTube does have some licensed content, it predominantly hosts user-generated content and independent productions.
- Access to Premium Features- OTT platforms typically offer additional features and benefits as part of their subscription packages. These can include offline downloads, simultaneous streaming on multiple devices, exclusive live streaming, behind-the-scenes, 4K or HD streaming, and early access to new releases. While YouTube does offer premium features through YouTube Premium, such as ad-free viewing and background playback, they may not match the extensive feature sets of dedicated OTT platforms.
Sneak peek on the Tech behind OTT Services – How is OTT Content delivered?
The technology behind delivering content for OTT services involves several components and processes, including content ingestion, encoding/transcoding, storage, and delivery.
The first step is to get the content from content owners or creators. Content ingestion is the process of getting information onto a database or storage system. Sometimes content ingestion is as simple as uploading a single file, but more typically it involves the automated upload and processing of many. The quality and completeness of content ingestion is fundamental to the smooth operation of any asset storage system.
Transcoding is conversion of one type of digital media into another format. Once the content is received, it needs to be transcoded into various formats to ensure compatibility with different devices and network conditions. Transcoding converts an already encoded digital file into an altered set of digital files that better meet the needs of your hardware or your audience. So, transcoding basically means conversion into multiple versions with varying bitrates, resolutions, and codecs.
Once the content is transcoded into multiple renditions, it is then stored in a content delivery network (CDN), which is a network of servers located in different geographic locations. The CDN ensures that the content is readily available to users immediately when they request for playback no matter where they are located. OTT providers also use cloud storage to store and manage their content libraries.
Muvi One uses AWS, one of the leading cloud hosting services in the world to deliver better and faster content to end-users all around the globe.
The final step is the delivery of stored content. When a user requests playback, the OTT service delivers the appropriate version of the content from the CDN and streamed directly to the user’s device over the internet. OTT providers use adaptive streaming technologies to optimize the delivery of the content, adjusting the bitrate and resolution based on the user’s network conditions and device capabilities.
Cross Device OTT Service Delivery
Cross-device OTT service delivery refers to the capability of OTT (Over-The-Top)
platforms to deliver their content seamlessly across multiple devices. It enables users to access and enjoy their favorite shows, movies, and other content on various devices, including smartphones, tablets, computers, smart TVs, and streaming media players. The goal is to provide a consistent and synchronized user experience regardless of the device being used. OTT content can be delivered on:
- Mobile devices- Mobile phones are the most used device when it comes to streaming. Smartphones and tablets can be used to download an OTT app for play stores for streaming content on the go.
- Personal computer- OTT content can be accessed using desktop-based apps and web browsers.
- Connected TV devices- Examples of these are Apple TV, Roku TV, and Fire TV. Game consoles, like PlayStation, also support OTT apps.
- Smart TVs- The latest models include pre-installed OTT apps or they provide simple ways for users to download them directly.
Key Points to Consider in Cross Platform OTT Delivery
When it comes to cross device OTT delivery, some pointers have to be kept in mind for maximizing content consumption satisfaction:
Cross-device delivery allows users to start watching a video on one device and seamlessly continue where they left off on another device.
For example, if a user starts watching a movie on their smartphone while commuting to their office, they can later switch to their smart TV at home and continue watching from the exact same point.
User Profiles and Syncing
One of the best things about OTT platforms is creating dedicated user profiles where users can create personalized accounts tied to their subscriptions. User profiles store viewing preferences, watch histories, and customized recommendations. With cross-device delivery, this profile information is synced across all devices, ensuring a consistent user experience and personalized recommendations regardless of the device being used.
In addition to keeping track of the user’s progress within a video, cross-device delivery ensures that the available content library remains synchronized across all devices. This means that if a user adds a show or movie to their watchlist on one device, it will be accessible on any other device linked to their account.
OTT platforms employ responsive design principles to optimize the user interface and viewing experience for different screen sizes and resolutions. This ensures that the content adapts to the device’s display, providing an optimal viewing experience on smartphones, tablets, computers, and TVs.
Remote Control Integration
Many OTT platforms offer remote control integration with streaming media players or smart TVs. This allows users to control playback, browse content, and navigate the interface using their device’s remote control, enhancing the convenience and usability of the OTT service.
Roadblocks/Challenges to consider when launching your OTT platform
There are many challenges when launching an OTT platform for your business.
- The first challenge is finding partners who can help you with this process because it requires large investments in order to launch an OTT platform successfully (for example: hiring staff members).
- Another challenge is finding customers who will use this service regularly because they want something new and different from what they currently have access to (for example: Netflix users who don’t use Hulu).
- The biggest challenge when launching an OTT platform for your brand is finding the right balance between quality and user experience—you don’t want viewers to have trouble accessing your content because it’s too slow or too difficult to use!
- You also need to ensure that you are providing enough value so that viewers will keep coming back again and again; if they don’t like what they see in one episode, they might not return for another one!
- OTT streaming services involve a complicated content delivery process which includes multiple service providers, CDNs and local internet which complicates diagnostics
- Delivery of live OTT requires a complex workflow and must work across bursty non guaranteed internet networks while also delivering across endless range of devices
How to Build a Successful OTT Platform?
The hardest part of creating and launching your own OTT platform is catering it to the demands of your target audience and constantly making relevant updates. As an OTT business, there is a lot you have to do to make your OTT service a success. Let’s explore some of the essential things to consider when launching your OTT service.
1. Craft a unique content strategy
Content is King. Always. Great entertaining content is what makes an OTT platform even more powerful. Hence, it would help if you focus on crafting a compelling content strategy to build the foundation of your streaming launch.
To begin, describe your target audience. Understand when and why they prefer watching your content. How much content are you planning to offer, and how frequently? Will you offer originally created programs or a catalog of licensed movies and shows?
Consider these questions when defining a content strategy for your OTT service. While some OTT offerings may appeal to a diversified audience base over time, others might find success as niche OTT offerings. Another point to consider is that never constrain your OTT content to a single device or a linear schedule; it must serve audiences of diverse viewing habits.
2. Deliver a personalized user experience
One of the key factors to creating a successful OTT platform is delivering not only great content but personalized ones. The user must feel that content has been specially curated for them after taking into consideration their watching patterns.
To cater to the demand of the modern audience in the digital era, use an AI-powered recommendation engine to create a customized content recommendation system. Today’s users are looking for personalized OTT services right from sign-up to viewing. Thus, you must focus on personalizing your audience’s user experience throughout their entire journey on your OTT platform.
3. Select a Professional OTT Platform Provider
Investing in a professional-grade no code OTT platform provider makes sense as it would take care of all of your streaming requirements without much effort from your side. Most platform providers are equipped with state-of-the-art features to get your OTT platform up and running without spending a huge fortune.
Invest in a robust and scalable technology infrastructure to handle the streaming demands of your platform like Muvi. Muvi includes content management systems, encoding and transcoding solutions, DRM, and efficient content delivery networks (CDNs) to ensure smooth playback and minimal buffering. All of this without writing a single line of code!
4. User-friendly interface and experience
Design an intuitive and visually appealing user interface (UI) that is easy to navigate across different devices. Implement features such as personalized recommendations, watchlists, user profiles, and search functionality to enhance the user experience. Conduct usability testing to identify and address any usability issues.
5. Monetization strategies
Determine your monetization model for generating revenue from your OTT platform. This can include subscription-based plans, ad-supported content, pay-per-view or transactional models, or a combination of these. Consider market trends, user preferences, and competitor analysis when deciding on your revenue strategy.
6. Performing marketing activities before the launch
Once you are done with building your OTT platform, kick start your marketing activities even before launch. Create a stir about your OTT platform on digital channels and social media to intrigue your audience and start creating a brand identity. You can also consider arranging a launch event that could attract the attention of your target viewers and press at the same time.
7. Highlight the competitive advantages
Summarize the competitive advantage of your OTT service in brief and use it for marketing activities. This is critical in attracting more viewers to become part of your community. For example, Netflix highlights its original production, whereas Spotify highlights its no-advertisement policy that drew people to their platforms.
OTT Platform Features of Muvi
Muvi One is the world’s first no-code, end-to-end OTT Platform provider, that allows you to launch white-label multi-device OTT streaming & video streaming platforms, offering monetization, CDN, DRM, and much more! Muvi One includes everything, fully managed, end-to-end, all controlled from a single CMS.
We have 1000+ enterprise grade features including:
White Label Streaming Service –
Using a white label streaming service enables you to use your logo, brand colors, etc that reflect your brand persona. An OTT platform should be able to build a brand name for itself and this is where free video hosting sites like YouTube fail to cut the mustard for most content creators.
Adaptive Bitrate Streaming–
The functionality to ensure that the best quality video streams are getting delivered to your customer is of immense importance for a video streaming platform. This is possible only through ABR-enabled video streaming– so make sure your streaming service provider supports ABR technology.
Right from content upload to delivery, Muvi protects you, your content, your platform, and your user data from multiple security threats, piracy, and hackers who intend to disrupt your streaming platform. From dynamic watermarking, geoblocking, DRM and protection against screen recording, rest assured your content is safe with us and tamper-proof.
Scalable and Reliable Delivery–
If your OTT platform boasts an exclusive content library, you would want to reach out to your customers in every corner of the world and that is only possible through a fast and reliable CDN or content delivery network. Also, an option for a multi CDN–enabled OTT service provider adds a layer of reliability as it allows routing of your content to the most optimal server located closest to the user requesting it. The result – lower latency and faster delivery of your content.
Built with an aim to remove the barriers that generally complicate website & app building, VD helps you establish your online presence just the way you want. Visual Designer helps you build your website & mobile apps without relying on developers. The drag and drop functionality allows you to create, modify and customize your entire website & mobile apps without any coding.
Make sure you choose an OTT streaming service that enables multiple monetization models including subscriptions, ad-based, PPV, or a hybrid model as per your business requirements.
With Muvi, you can launch your very own OTT App across 20+ platforms, without writing a single line of code. With your OTT app, you can let your audience stream their favorite content from the device of their choice, such as tablets, mobiles, TVs, and gaming consoles.
This is something unique to Muvi which no other OTT platform provider will give you. Muvi One now allows you to develop, preview and try your own branded streaming apps in minutes with a unique offering – ‘Try Your App’. This means that you get a fully functional streaming app with all the features as per your branding.
Muvi One is an instantly deployable streaming platform that is specifically designed to deliver the highest-quality video resolution streaming to users all across the globe including 4K high resolution videos.
The Future of the OTT Industry
The future of OTT looks promising and is expected to experience significant growth in the coming years. The OTT market is poised to grow from US $190.32 billion in 2022 to US $1241.6 billion by 2030 growing at a CAGR of 26.42%.
As internet connectivity improves globally and more users adopt streaming services, the demand for OTT platforms is likely to increase. This growth is driven by factors such as increasing internet penetration, the proliferation of smartphones, and the availability of high-speed broadband connections.
1. Quality Enhancement or Emergence of Original Content
The production of original content by OTT platforms will continue to thrive. Platforms like Netflix, Amazon Prime Video, and Disney+ have made significant investments in creating exclusive and high-quality content to attract and retain subscribers.
2. Growth of AI
OTT platforms will increasingly leverage artificial intelligence (AI) and machine learning algorithms to personalize the user experience. By analyzing user data, viewing habits, and preferences, platforms will provide more accurate and tailored content recommendations, enhancing user satisfaction and engagement.
3. Expansion of Global Market
Although OTT platforms have already achieved a global-reach status, they are likely to expand even further into new markets and regions. The demand for local content backed with improved infrastructure will drive OTT services to become more accessible to viewers around the world.
4. Advancements in Technology
Also in the coming years, OTT platforms will witness adopting newer technological innovations. This includes optimizing for new devices, such as smart TVs, gaming consoles, and virtual reality headsets. Additionally, advancements like 5G connectivity, improved video codecs, and immersive audio technologies will influence the future of OTT, enabling higher quality streaming experiences.
5. Advertising Evolution
Advertising on OTT platforms will continue to evolve, with more targeted and personalized ad experiences. Advertisers will leverage user data to deliver relevant ads to specific audience segments, improving the effectiveness of ad campaigns while minimizing disruption to the viewer’s streaming experience.
6. Increased Collaboration and Partnerships
OTT platforms may engage in more collaborations and partnerships with content creators, production studios, and even traditional media networks. These alliances can lead to the sharing of resources, co-productions, and the acquisition of exclusive content, providing a win-win situation for all parties involved.
7. Integration with Smart Devices
OTT platforms have the ability to seamlessly connect and interact with various smart devices within a user’s ecosystem. This integration enhances the user experience and allows for more convenient and personalized content consumption.
By integrating with smart devices such as Smart TVs, streaming devices, set-top-boxes, voice assistants, mobile devices, gaming consoles and wearable devices , OTT platforms drive accessibility, convenience, and user engagement allowing users to enjoy a seamless and interconnected experience across various devices.
Making content accessible anywhere and on any device, OTT truly enables a better user experience for customers, catering across a wide range of industries and use cases.
Muvi is the world’s first NO-CODE, feature-rich, end-to-end OTT platform provider that can add new video capabilities to your business. Muvi’s fully managed OTT platform offers both Video on Demand (VOD) and Live Streaming solutions empowering you to launch your own branded multi-device OTT platform, instantly!
Are you ready to explore how optimized and user-friendly Muvi’s feature-rich OTT platform is? Check it out yourself by taking a 14-day Free trial!
What does OTT stand for?
OTT stands for “over-the-top” and refers to technology that delivers streamed content over the internet surpassing traditional methods of transmission like cable or satellite. With OTT, users can sign up to OTT streaming platforms and access their content over the internet, anytime, anywhere and on any device.
Why OTT is Important For Your Business?
OTT is important for your business as it gives you a wider market to target, an enhanced user engagement for your audience, targeted advertising, flexibility in content creation and multiple monetization opportunities.
How do OTT platforms earn money?
OTT (Over-The-Top) platforms generate revenue through various monetization strategies like subscriptions, PPV, advertisements, partnerships and licensing, and sponsorship and brand integrations.
Which is the most affordable OTT platform?
A lot of factors come into play while calculating the affordability of OTT platforms. However some popular affordable OTT platforms are Netflix, Hulu, Amazon Prime Video and Tubi.
Can we watch live sports on OTT platforms?
Yes, live sports can be watched on OTT platforms. Many OTT platforms offer live sports streaming as part of their content offerings. These platforms secure rights to broadcast live sports events and provide users with the ability to stream games, matches, tournaments, and other sporting events in real-time.