Except for the world wide web delivering extra services to the user, traditional media consumption is also moving to online platforms. No more need for the cable TV or satellite TV subscriptions – you can watch films or shows having a high-speed Internet connection. It is now enough to load up an OTT app like YouTube TV or Hulu on a preferred device to cast to the favorite streaming channel of your choice.
OTT TV or over-the-top television is currently one of the hottest trends in the video streaming industry. According to eMarketer, the average time spent on OTT TV exceeded 62 minutes in 2020. As this field expands, advertisers and marketing specialists should learn more about over-the-top, and this article contains the necessary information.
What is OTT TV?
As mentioned above, OTT stands for “over-the-top.” OTT TV is also known as online television. Shortly, it is about streaming across various OTT devices. Unlike with traditional cable or satellite television, watchers can access OTT platforms whenever they want, from anywhere on the map. This is a new approach to delivering video content over the web with no need for traditional television providers. Instead, consumers pay internet providers.
Examples of over-the-top include Xfinity, Verizon, and Spectrum. Many modern devices are compatible with OTT services. It is enough to have a stable internet connection to enjoy videos.
The recent growth of over-the-top providers has been enormous. Netflix is currently the most popular OTT channel with a total of 214 million paid subscribers. Experts predict that the number of subscription OTT video service viewers in the United States alone will go up by 11 percent in 2022.
CTV statistics prove its popularity as well. For the most popular CTV platform in the USA, it’s more than 55 million monthly active accounts; for Amazon Fire TV, this mark is 50+ million monthly active users worldwide. Android TV managed to make it through to over 80 million monthly active OTT devices, and Apple TV reached 28+ million active OTT devices in the United States alone. These facts all prove the popularity of OTT solutions.
Video streaming is the most popular version of over-the-top media services. However, other types of content are also suitable for OTT solutions.
For instance, audio streaming is another over-the-top category, as are podcasts and online radio channels. Voice calling platforms (VOIP) that integrate with mobile networks to boost some features are OTT services too (e.g., WeChat or Skype). Finally, there are OTT-based messaging services like Facebook or Google that allow people to connect easily.
How does OTT TV work?
Consumers can access over-the-top services in numerous ways by using different OTT devices, both desktop and mobile. A user may only need to pay for a subscription to the OTT platform of their choice so it’s possible to choose between monthly and annual subscriptions. Disney+ and Netflix are two examples that function this way. Some OTT services do not charge fees. Instead, they make money from OTT TV by showing advertisements during shows and films. Pluto TV and Tubi work this way.
Primary OTT benefits that make this model attractive
Many studies prove how prevalent over-the-top consumption has become. For example, one report discovered a ratio of 1.64 OTT subscriptions per one household in the US in 2020. This boom has been caused by the number of businesses investing their funds into OTT ads and increase in demand because of more people staying at home, and they do it for several good reasons.
- Affordable Pricing
When users choose over-the-top platforms, they do not pay a TV-cable organization to watch videos. Most of the content is accessible via the web. To use an OTT app, customers should sign up and pay for a monthly subscription. For an affordable price, they can then watch multiple videos.
- Full Control
OTT TV allows having complete control of your revenue. OTT apps allow you to thoroughly monitor your content, target audience, brand, revenues, and data. It makes it possible to decide on your rates or pick a subscription-based model. Consider YouTube as an example of the opposite, where the platform algorithmically defines the entire process. Thus, there is no way to impact the advertisements on YouTube.
- Instant Playback
Those who love specific shows would benefit from using an OTT app as well. The thing is, they can watch top-preferred moments over and over again. It is enough to pay for the subscription on time, and any limitations will be removed.
- Smooth Transition
OTT allows a smooth transition from traditional TV. Much of the programming is carried over from conventional TV media, which is why the formatting is similar too. A company that decides to move from traditional television to OTT content obtains the ad advantages of utilizing the viewable traditional TV commercial breaks alongside the data-focused targeting of the online environment.
- Choice of Content
Traditional TV cable companies only offer a limited list of shows and films. As for OTT, this service suggests a greater variety of unique videos that cannot be found on traditional television. Users only have to authorize and subscribe to view that original content.
- Expanded reach
Businesses that choose OTT can significantly expand their audiences. This model provides advertising on a one-to-one vector. No matter what a user is watching and where they are, it’s possible to target them at any part of the world. Over-the-top delivers a treasure trove of data about what consumers prefer watching. It helps to detect their behavioral patterns so marketing experts obtain a comprehensive user portrait rendered in figures.
- Free choice of the service provider
Consumers can select a video provider by setting up a dedicated OTT TV app or employing pre-installed solutions. Over-the-top provides the flexibility to adjust your models for maximum uptake.
- Compatibility with Multiple Devices
Cable TV requires a television set. On the contrary, consumers can enjoy videos from a wide range of OTT devices if they choose OTT TV services. For instance, it’s possible to access content from a mobile phone, laptop, desktop computer, Smart TV, and gaming console without the hassle of cables and other technology.
Wider opportunities: three monetization models to consider
Many creative methods to generate revenues with OTT exist in 2021. From advertisements and subscriptions to transactions, you should first ensure that it is the right fit for your consumer.
Several monetization models for your OTT TV are known. Each of them provides certain monetization opportunities.
- SVOD Model. Subscription Video on Demand frameworks make it possible for over-the-top providers to propose an “ad-free experience,” as their profit comes from user subs. For a small recurring fee, users can obtain access to a great library of videos. Netflix falls into this category, making a 23.8% increase year on year. Other examples of successful SVOD services include HBO Go, ESPN+, Peloton, and Simply South.
- AVOD Model. In the Ad-based Video on Demand model, providers generate revenue by selling ad space to outside organizations. Viewers do not have to pay anything but watch ads to access their preferred content. Pluto TV and Dailymotion fall into this category.
- Hybrid Model. This combines the features of the two previous models. Let’s consider Hulu as an example. This service has a couple of subscription alternatives. The first one requires paying $5.99 every month, including advertisements. If a user chooses another subscription that costs $11.99 monthly, they can enjoy an ad-free experience.
It is up to you whether your customers will have to pay a fixed fee to access premium videos or view content for free, having to watch some ads.
So, the question is how to monetize your OTT TV. Several reliable ways exist, but the best one is creating your own OTT TV application. Doing it on your own might be complicated, but the process will turn into a piece of cake with the help of professionals from our team.
How VlogBox helps to monetize an OTT app
Our company offers custom OTT app development, along with SVOD and AVOD monetization, video distribution, accurate channel analytics, personal manager assistance, as well as promotion and marketing support.
Whether you prefer multiplatform publishing or using just one platform (e.g., Amazon Fire TV or Apple TV), it is enough to select a design template from our list and leave the rest of the job to us.
Monetization becomes easy when you deal with VlogBox. Here is how you can monetize your content in three simple steps:
- Create a VlogBox account.
- Develop your own channel (all you need at this stage is just provide us your video content).
- Start earning good money via one of the available ways (SVOD or AVOD).
Once again, SVOD is about making money via user subscriptions per month, while AVOD means receiving income for advertisement viewership with pre-, mid-, or post-rolls. Do not forget about the Hybrid model that combines the features of these two. This way, you provide your users with a choice between accessing videos for free, having to watch ads or pay a fixed price to view premium content with no limits.
Final thoughts
It is not too late to get into the OTT TV industry, so don’t miss this opportunity. Over-the-top television is the most effective way for your videos to be as accessible as possible. This model assists with reaching the largest audience possible. A custom OTT app is how you can quickly increase your customer base.