App & Software

All You Want to Know About Making Money from OTT TV Apps

OTT TV is the next stage in the evolution of television programming, combining the instantaneous nature of internet streaming into everything people love about the medium. It’s been projected that traditional TV will die out over time while OTT access is rising in demand. The OTT TV market may be worth $72.8 billion by 2023.

Therefore, now is a good time to get into it and think about OTT platform development. As the demand for video content is rising, there is a spike in the sales of streaming devices. Therefore, even non-traditional smaller players like choreographers, fitness experts, etc. are launching their own OTT streaming apps. There is a lot of potential for adaptability and creativity.

How Does OTT TV Work?

OTT TV has Smart TVs to thank for the popularity. Smart TVs offer a large number of OTT apps to the viewer. Those who don’t have them may buy OTT devices that connect to the TV and allow delivery of video content almost like a router.

These apps allow syncing across all the devices they are installed on. The viewer can resume watching wherever they left off. They also have playback controls like speed control, downloading for offline viewing, quality controls, playlist building, and other features, making them more convenient than conventional TV.

Investment into OTT Apps: Some Big Numbers

OTT TV platforms have proved to be quite lucrative for many players. The most famous of them, Netflix, has steadily expanded to many markets with the TV shows and movies garnering critical acclaim. During the COVID-19 pandemic, movie releases happened on OTT platforms, proving quite helpful for players like Disney.

Netflix had revenue of almost $20 bn in 2020. Disney made about $4.5 billion in 2020. These are the big players, but even smaller ones like Yoga and mindfulness apps are raking in some money, averaging about $600,000 per app.

How Do You Make Money From OTT TV?

There are three main revenue models for making money from OTT apps. Many brands mix them up to maximize revenue generation.

Subscription-Based Model

The SVOD model is the most familiar kind, rather like traditional TV, offering users varying amounts of content for a flat fee paid periodically. It works out well for content giants like Netflix, Amazon Prime, Hulu, etc. that have a lot to offer.

The advantage is that businesses get to keep all the revenue generated with no splitting among advertisers, and thus also rids subscribers of ads they find annoying. The challenge is to grow the audience large enough that the revenue will exceed the operational costs.

Advertising Model

This model has adapted and survived in the OTT space. Once upon a time, the breaks in between TV programming were prime real estate for advertisers to bid on, and today, they clamor for streaming before videos or in between, as you decide. The viewers get to access content for free, while advertisers pay to get their products in front of viewers.

The success of this model is contingent upon having a viewer base that will buy the advertiser products. Typically, the larger an audience is, the more likely the success of this model. Many apps use AVOD for their free viewership plans and extend SVOD to paying viewers.

Pay per View

As the name suggests, viewers pay specifically for the videos they consume. It can work out very well for apps with lesser content and if you want to generate hype around exclusive programming.

The PPV model has been used successfully by gaming and sports live streamers as well as YouTube. The model potentially can generate a higher revenue than any other model. Its also well-suited to smaller audiences, especially if the content targets a niche.

Conclusion

There are a few different ways to go about starting your own OTT TV app. For one, you can build an in-house OTT solution, by hiring an entire development team; and that can work out, if like Netflix you have proprietary, revolutionary tech to keep undisclosed

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