OTT platforms have seen an outrageous growth in India as well as in other parts of the world during and post pandemic. OTT, Over the Top, is basically the streaming of entertainment and media, using internet. OTT platforms were in existence since so many years but during lockdown, lack of entertainment spaces like cinema halls, amusement parts, gaming zones, etc., the consumption of OTT- based entertainment services has become predominant. Moreover, access to better networks, digital connectivity, & and smartphones has accelerated the consumption of media on OTT platforms. The same TV earlier having linear cable &and DTH connection, will have firestick/smart device also to watch the internet- based content on OTT platforms.
Success factors behind increased consumption of OTT services are mainly as below.
• The consumer is able to select the device of his choice like laptop/smart TV/mobile as per their convenience for viewing the content -– at work, at home or in transit.
• OTT has opened up the possibility for ad-free content, by enabling subscription services (SVOD), one-time purchases (TVOD) .
• OTT service providers offer wide variety of content, personalized for individual users.
• These platforms use data analytics and artificial intelligence to suggest users the content they are likely to view, based on their past viewership.
• The absence of a proper censorship board for web content is also in a way increasing the creativity of content, though recently some regulations have been put in place for monitoring and grievance redressal.
Opportunities for all
Success stories of OTT platforms have opened up the doors of opportunities for lots of people to showcase their talent due to its cost effectiveness. In fact, main stream artists now prefer OTT platforms given its popularity, flexibility, and convenience. Further, covid 19 guidelines and lockdown regulations also prevented the films from being released in theaters;, therefore, major production houses adopted OTT platforms for their new releases. OTT platforms, initially meant as content hosting platforms, are into making original video content of their own.
Regulatory Rules rules for OTT platforms
Massive growth in the number of OTT platforms, without any regulatory framework, resulted in a number of controversies. Recently, the government has announced new rules to regulate the social media platforms, OTT service providers, and digital content providers.
The government has introduced a three-tier mechanism and termed it as a “Soft-touch regulatory architecture.” The first tier will be a grievance redressal mechanism to be established by the platforms themselves. The second tier will be a self-regulatory body of content publishers to be headed by a retired Supreme Court/High Court judge/eminent person in the relevant field. This industry-led self-regulatory body is called the ‘Digital Media Content Regulatory Council’ (DMCRC) for digital OTT platforms. Third level is an oversight mechanism through an interdepartmental committee constituted by the government. This committee will hear appeals arising out of decisions taken at level two, and if a complaint is referred to the committee by the Ministry of Information and Broadcasting (MIB).
The rules require OTT platforms to self-classify content into five major age- based categories, provide parental locks for mature content, and a reliable age- verification mechanism for adult- only content.
Revenue Model model of OTT companies
There are many business models to make revenue through OTT platforms.
AVOD (Advertising video on demand)
These types of OTT platforms generate revenue with ads. In this model, consumers can watch videos for free, but ads in between the show can be annoying to some viewers. Ads should be sufficient enough to earn revenue but without losing potential viewers. Examples are YouTube, Yahoo Screen, etc.
SVOD (Subscription video on demand)
Users pay a fixed amount on monthly or yearly basis and they have full access to the content library. Netflix, Amazon Prime and HULU are a few examples.
TVOD (Transactional video on demand)
Also known as pay-per-view (PPV) or pay-per-download (PPD), it requires users to pay for the content they wish to access. Google Mmovie, YouTube Movie, and iTunes are popular TVOD streaming platforms.
Business models are ever- evolving concepts and OTT business must consider content offering, target group, and core business strategy to leverage the right streaming solution.
The OTT industry has amassed global popularity in recent years, and is set for aggressive growth in the coming years too.