During the COVID-19 pandemic and post-COVID era, Over-the-top (OTT) players (Netflix, Prime Video etc) have become very dominant in the Media and entertainment space outsmarting traditional entertainment players like Print, Television, and radio.
More so, because the content is on-demand and easily accessible on any device besides being affordable.
The OTT technology distributes content over the Internet, through a technology called Content Distribution Network (CDN), bypassing the traditional media infrastructure. Though video content is something that strikes our mind when OTT is being discussed, the fact is that OTT content can range from video, and audio to text. In this blog post, let’s deep dive into the video content and talk about the landscape and the key players and challenges.
Video Content on Demand:
Let’s look at some of the Key Global Players in this industry.
- – Netflix
- – Prime Video
- – Disney Hotstar and more
While the global players are catering to the Indian market, there are about 40+ players in India alone competing with the global giants. Some of the regional players are:
- Jio
- Zee
- Aha
- Sony and many more
Is this so lucrative business? Seems not. Most of them are running into losses due to huge costs outgrowing the revenues.
Let’s take a look at their business model. Here are some of the Revenue drivers for this business.
Business Model (Revenue streams)
- Subscription (SVOD)
- Advertisements (AVOD)
- Content Licensing
- Digital content rental (TVOD)
- Merchandising
Key Cost Drivers:
Fixed Cost:
- Studios setup
- Platform setup
Variable Cost:
- Content Licensing
- Production cost
- Content hosting and distribution
- Marketing cost
In the traditional model, Producers, directors and a whole bunch of crew are working together to produce films and distributors to release the content to theatres. Then how do these OTT players acquire content? They acquire content through:
– Self-production by setting up their studios. Eg; Amazon studios
– Content Licensing – License content from Filmmakers and production houses.
– Distribution – Act as a distributor
Yes, Content is King!!
We know that traditional movies are put through stringent regulations (CBFC) and get censored and certified before they can move to box offices. However, the OTT content is not fully regulated as of now. There are self-regulatory bodies & government departments overseeing the content before it gets broadcast.
From the Technology standpoint, while the big players have their own OTT platforms developed in-house, small and medium companies or even individuals wanting to enter this business also can get the platform created through third party vendors without having to reinvent the wheel. There are quite a few companies selling OTT platforms that can be customized based on the business need. Some of the companies selling OTT platforms – VPlayed, Kaltura, Vimeo, Brid TV, IBM Cloud Video.
While the Customers joining this OTT bandwagon are growing day by day, the millennial segment is predominantly the driver of user base growth. Catering to the likes of this segment is the key. While having a good platform to broadcast content is important, the secret sauce for success in this industry seem to be having Killer Content, having a solid Recommendation Engine, and expanding the reach with competitive subscription plans.