How Do You Make Money From OTT TV Apps?

Justin Alexa
By Justin Alexa 6 Min Read


While OTT platforms are here to stay as a popular online media consumption option, there is a mini-revolution happening in the fixed viewing format. TV viewers now have the option of a newer subscription model – OTT TV or Over The Top- Television. 

It offers a viewing experience similar to the OTT model but will host only programmatic content. As the demand for this content format rises, let us look at the options available for monetizing OTT TV Apps. Let us begin with understanding how the new model works, how content is acquired for these platforms, and how money is made from these OTT TV Apps

How Does OTT TV Apps Work?

OTT TV brings video content in the form of TV shows or films to the consumer’s gaming consoles, streaming boxes, smart TV app development or media streaming devices over high-speed internet provided by Internet Service Providers. 

The technology used here is a Content Delivery Network (CDN) which allows the transfer of IP packets to the ISP. End-users or viewers then access it as part of their internet service. Thus, they can avoid expensive satellite and cable TV costs they would otherwise pay even for unviewed channels. Instead, users can selectively choose programs that suit their sensibilities. 

How Do OTT TV App Platforms Acquire Content?

The OTT Platforms have become popular in media consumption because of the convenience of watching content anywhere and anytime. But more importantly, the high-quality content, content engagement, and viewer experience have led to high adoption. There are two basic ways by which OTT platforms come to own content –

  1. Self-production – The OTT platforms produce the content themselves. They fund creators to make films, web series, and other formats that are easily consumed over the internet. Apart from the funds, some platforms are part of the creative process by defining policies, content strategies, etc. The idea is to have original content for streaming on their platform.
  1. Purchasing broadcasting rights – In this method, the OTT platform pays for the rights to stream the content on their application. The filmmakers or creators sell the viewing rights for the amount they value their content. This type of content acquisition allows the OTT platform to add to its content library and expand its viewership. 

What are some ways to generate revenue through OTT TV applications?

OTTs have a straightforward business model for monetization. The first step is for the OTT platform to invest in making its content or to buy it from creators. The content is then available to viewers for a small fee or viewed without paying but with advertisements. There are typically four revenue models that allow the platform to make profits. The models that earn revenue are- 

  • Advertising – This is also called the AVOD or Advertising Video on Demand model. This model gives viewers a chance to view content without paying for them but will be interrupted by advertisements of companies and brands which pay for the platform. An example of this model is Voot and MXPlayer.  
  • Subscription – Also called the Subscription Video on Demand (SVOD) model, viewers/users pay the platform a fee or subscription to view content. Examples are Amazon Prime and Netflix.
  • Pay-Per-View – This model is also called the Transactional model or TVOD. Users have the choice to pay solely for the content that they decide to watch. Examples are Amazon Video Store and Apple’s iTunes.
  • Premium VOD – This method gives viewers exclusive or premium content at slightly higher rates, along with complete access to all application components. The core idea is that all services will be ad-free.

With all of these monetization offers, PVOD leads to interactive and engaging experiences, as a lot of data analytics is used to create personalized viewing opportunities. It is also a great business model for the content production industry since PVOD will reduce piracy and ensure it can be distributed across several competing platforms with a large subscriber base. 

As the entertainment industry begins considering PVOD as the future of content viewing, production houses are already focusing on release strategies. An option that this model supports is the Electronic Sell-Through model (EST), which will allow families to view the content in theaters.  

Conclusion

Thus, OTT TV apps are also an avenue to make money since media consumption over online platforms continues to be a part of consumer preference. There are several models by which content is delivered to consumers to earn via subscriptions and services. Of the monetization methods, Premium Video on Demand is very effective as it increases audience engagement and will place you strategically to be part of the next streaming revolution. 

Productions are likely to be strategically released on OTT TV apps and movie plexes. Hence, by offering a self-hosted video-on-demand platform with personalized streaming opportunities, you can drive more revenue. 

Justin Alexa

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Justin Alexa is a seasoned blogger and professional writer with expertise in AI, cybersecurity, mobile, computers, and more. Explore the tech world with Justin's insightful and accessible articles, keeping you informed and inspired in the ever-evolving digital landscape. Join him on a journey of discovery, where complex tech concepts become clear and captivating.

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