OTT Platforms Are Money Making – Here Is Why

Statista says that the total revenue of the OTT video segment is expected to reach $427.80 billion by 2026, with an annual rate of 11.01%. The service also predicted that the number of users might amount to 3,930.3 million users by 2026.

The OTT video streaming business is profitable. In this article, we are going to talk about the reasons why.

Monetization models

OTT monetization models include different approaches to monetizing video content: subscription-based, advertisement-based, and transaction-based. A hybrid monetization model is also an option. For example, video streaming platform creators divide content into several groups: videos available on subscription and videos that require additional payment.

According to a report, ad-based VOD is used more than subscription-based VOD. The researchers found that the time consumers spent on SVOD decreased by 8.6% throughout 2021. At the same time, the time they spent on AVOD grew by 9.3%.

An advertisement-based model doesn’t require consumers to pay. They watch server-side inserted ads (SSAI) that usually last less than a minute. You can learn more about server-side ad insertion in the blog article.

The customer switching to AVOD can be partly explained by a subscription fatigue phenomenon. The phenomenon points out that there are so many subscription-based streaming platforms that customers are tired of paying for all of them.

User Experience

OTT platforms deliver video content directly through the Internet. Almost any device today maintains a connection to the Internet, which makes it possible for many consumers to access videos on any device. What is more, they can view content when they want without depending on a fixed schedule.

OTT platforms provide users with a library of videos available on-demand, while TV programs have their censorship and often can be accessed only on TVs. The genres of video content OTT platforms have are more diverse.

All these factors attract customers due to the convenience they ensure. Users don’t depend on the place and time of watching their beloved videos. There is no need to wait a day or week to watch a new episode. A user defines the way they view videos. The Internet connection and a compatible device are everything required.

Covering audience globally

The tools OTT platforms are equipped with help to deliver content to more people around the world. Two major elements contribute to that: content delivery servers spread across the continents and operation on many devices.

A content delivery network (CDN) allows content owners to deliver videos to end-users without latencies but with high data transfer speeds. You will possibly need a CDN software, and the rest will happen under the hood. The point is that you might have customers not only in one country but in many of them.

What is more, OTT platforms can have apps for different devices: from smartphones to Smart TVs. It means that you can even attract those users who, for example, don’t have a laptop but have a mobile phone.

Also, people are not limited to one device. For example, they can start watching a video on a laptop and finish watching it on a mobile phone on their way to work.

White-label solutions

OTT video streaming service enthusiasts don’t need to hire a team of developers to create a platform for streaming video content. They can address a development company that has already created a white-label solution for such a business.

It means that all tools, features, and a platform are pre-designed. The software is waiting for customization. You can use your brand colors and fonts to make a platform recognizable and appealing.

You save a fortune using a white-label solution because you don’t have to pay the salaries of a team, which is often the highest expense of a business.

Final Thoughts

A video streaming platform is a profitable idea for a business because it has many tools that can help it succeed: customer satisfaction, few investments, monetization capabilities, and opportunities to grow your audience and expand a business.

All a business needs to do is care about content and check the analytics, which will show its strengths and areas for improvement. The rest you can obtain from companies specialized in developing OTT solutions.

Read Also: How to choose the best TV Service Provider in 2022?


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