Over-the-top (OTT) platforms are media services that deliver content directly to viewers over the Internet without the need for traditional cable or satellite TV subscriptions. OTT platforms offer a variety of content, including movies, TV shows, music, and games. Let us look at an overview of OTT Platforms before moving into OTT Business Model.
OTT platforms are popular because they offer several advantages over traditional TV services:
- OTT platforms are typically less expensive than cable or satellite TV.
- OTT platforms offer a wider variety of content to choose from.
- OTT platforms allow viewers to watch their content on-demand, meaning they can watch what they want when they want.
Some popular OTT platforms include Netflix, Hulu, Amazon Prime Video, and Disney+. These platforms offer a wide variety of TV shows and movies and original content that is not available on traditional TV.
OTT platforms are also becoming increasingly popular for music streaming. Platforms such as Spotify and Apple Music allow users to stream millions of songs on-demand.
OTT platforms are changing the way that people consume media. By offering a wide variety of content at a lower price than traditional TV services, OTT platforms are making it easier and more affordable for people to watch and listen to what they want when they want.
Here is an example of how an OTT platform might be used in everyday life:
A family wants to watch a movie on a Saturday night. They could go to the theatre, which would be expensive and inconvenient. They could also rent a movie from a video store, which would be costly and inconvenient. Instead, the family decides to watch a movie on their OTT platform of choice. They can choose from new releases, classic films, and original content. They can also watch the movie at their own pace, without worrying about commercials or leaving the house.
OTT platforms are making it easier and more affordable for people to consume media how they want.
Content Outline
Types Of OTT Services Offered :
- Video-Based OTT Services Ex: Netflix, Youtube Etc.
- Music-Based OTT Services Ex: Spotify, Apple Music, YouTube Music Etc.
- Messaging-Based OTT Services Ex: Facebook, WeChat, Whatsapp Etc.
Modes Of Access To OTT Platform :
- Mobile Devices: Smartphones Can Download OTT Apps From There Supported Digital Store
- Smart TVs: Modern TV models often include pre-installed OTT apps.
- PCs: Most Desktops Support OTT Content Through Desktop-Based Apps or Web Browsers.
Top 4 OTT Platforms in India Based On Subscription :
- Disney+ Hotstar (Free & Paid)
- Launched: 2015 (as Hotstar)
- Parent company: Walt Disney Company
- Available in India and Southeast Asia
- Monthly active users: Over 400 million
- Paid users: Over 8 million
- Hotstar was launched in 2015 by Star Group India to offer live streaming of cricket matches and other sporting events for free. It was later rebranded as Disney+ Hotstar in 2020 after Walt Disney Company acquired Star Group India’s parent company, 21st Century Fox.
- Disney+ Hotstar is one of India’s most popular streaming services, with over 400 million monthly active users. It offers a wide range of content, including movies, TV shows, live sports, and original programming. Disney+ Hotstar is available on various devices, including smartphones, tablets, laptops, smart TVs, and game consoles
- According to Statista, Disney+ Hotstar had 40.4 million paid subscribers as of July 1, 2023. This represents a decline of 24% from the previous quarter. The fall is attributed to several factors, including the lack of live cricket matches during the quarter and the increasing competition from other streaming services in India.
- Despite the decline in paid subscribers, Disney+ Hotstar remains one of India’s most popular streaming services. It is expected to grow in the coming years as it expands its content offerings and reaches new markets.
- Amazon Prime Video (Paid)
- Launched: 2006 (in the US), 2016 (in India)
- Parent company: Amazon
- Available in: Over 200 countries and territories
- Paid subscribers: 175 million worldwide, over 4 million in India (as of August 2023)
- Amazon Prime Video is a subscription video streaming service that offers a wide range of movies and TV shows, including original programming. Prime Video is available on various devices, including smartphones, tablets, laptops, smart TVs, and game consoles.
- Prime Video was initially launched in the US in 2006 and expanded to India in 2016. Prime Video’s launch in India coincided with the launch of Reliance Jio’s 4G LTE network, making it more affordable for Indians to stream video content online.
- According to Statista, Amazon Prime Video had over 200 million paid subscribers worldwide as of August 2023. This represents a growth of 20% from the previous year. In India, Amazon Prime Video had over 4 million paid subscribers as of August 2023. This means an increase of 30% from the prior year.
- Amazon Prime Video is one of India’s most popular streaming services, competing with Disney+ Hotstar and Netflix. Prime Video is expected to continue to grow in the coming years as it expands its content offerings and reaches new markets.
- In addition to its paid subscription service, Amazon Prime Video offers several free movies and TV shows. This makes it a more affordable option for budget-conscious consumers.
- SonyLIV (Free & Paid)
- Launched: 2013
- Parent company: Sony Pictures Networks India
- Available in India and over 100 other countries
- Monthly active users: Over 100 million
- Paid subscribers: Over 33 million (as of August 2023)
- SonyLIV is a subscription video streaming service that offers a wide range of entertainment and sports content, including original programming, international and local movies and TV shows, and live sports. SonyLIV is available on various devices, including smartphones, tablets, laptops, smart TVs, and game consoles.
- SonyLIV is one of India’s most popular streaming services, competing with Disney+ Hotstar and Amazon Prime Video. SonyLIV strongly focuses on sports content, including live IPL cricket matches and other popular sporting events.
- According to a report by MediaNama, SonyLIV had over 33 million paid subscribers in India as of August 2023. This represents a growth of 20% from the previous year. SonyLIV also has over 100 million monthly active users, making it one of India’s most popular streaming services.
- SonyLIV is expected to grow in the coming years as it expands its content offerings and reaches new markets. SonyLIV is also well-positioned to benefit from the growing popularity of online sports streaming in India.
- Netflix (Paid)
- Launched: 1997 (in the US), 2016 (in India)
- Parent company: Netflix, Inc.
- Available in: Over 190 countries and territories
- Paid subscribers: 238.4 million worldwide, over 8 million in India (as of July 1, 2023)
- Netflix is a subscription video streaming service that offers a wide range of movies and TV shows, including original programming. Netflix is available on various devices, including smartphones, tablets, laptops, smart TVs, and game consoles.
- Netflix launched its services in India in 2016, coinciding with the launch of Reliance Jio’s 4G LTE network, which made it more affordable for Indians to stream video content online.
- According to Statista, Netflix had over 238 million paid subscribers worldwide as of July 1, 2023. This represents a decline of 1% from the previous quarter. The fall is attributed to several factors, including the increasing competition from other streaming services, the rising cost of living, and the war in Ukraine.
- In India, Netflix had over 8 million paid subscribers as of July 1, 2023. This represents a decline of 10% from the previous quarter. The fall is attributed to the increasing competition from other streaming services in India, the rising cost of living, and the fact that Netflix offers no local content in India.
- Despite declining subscribers, Netflix remains the global leader in the OTT market. It is expected to grow in the coming years as it expands its content offerings and reaches new markets.
- Comparison to other OTT platforms in India
- Netflix is India’s fourth most popular streaming service, behind Disney+ Hotstar, Amazon Prime Video, and SonyLIV. Netflix is facing increasing competition from these platforms and local streaming services such as Zee5 and Voot Select.
- Netflix is also facing challenges from the rising cost of living in India. Many Indians are cutting back on their spending on entertainment, including streaming subscriptions.
- To compete in the Indian market, Netflix must offer more local content and affordable subscription plans. Netflix must also find ways to differentiate itself from other streaming services by providing exclusive content and features.
OTT Business Model
OTT platforms have gained massive popularity in recent years, and the COVID-19 pandemic has only accelerated this trend. People are spending more time at home and looking for ways to stay entertained. OTT platforms offer a wide variety of content, including movies, TV shows, live sports, and original programming.
The three major OTT platforms in the global market are Netflix, Amazon Prime Video, and Disney+ Hotstar. These platforms generate billions of dollars in revenue through a variety of OTT business models, including:
- Subscription-based OTT Business Model: Subscribers pay a monthly or annual fee to access the platform’s entire content library.
- Advertising-based: Viewers can watch content for free, but they are shown ads before, during, and after videos.
- Transactional: Viewers pay a fee to watch individual movies or TV shows.
- Hybrid: This model combines subscription and advertising revenue. For example, some platforms offer a basic subscription plan with limited content and charge users for premium content or features.
In 2023, the global OTT market is expected to generate over $200 billion in revenue. The subscription-based model is the most popular business model in the OTT market, accounting for over 50% of revenue. The advertising-based model is the second most popular revenue model, accounting for over 30% of revenue.
Here are some examples of how popular OTT platforms use the different revenue models:
- Netflix: Netflix uses a subscription-based model. Subscribers pay a monthly fee to access the platform’s entire content library.
- Amazon Prime Video: Amazon Prime Video uses a hybrid model. Subscribers pay an annual fee for Amazon Prime membership, which includes access to Prime Video and other benefits such as free shipping and Amazon Music. Prime Video also offers a subscription-only plan for users who do not want to pay for Amazon Prime membership.
- Disney+ Hotstar: Disney+ Hotstar uses a hybrid model in India. Users can watch essential content for free but must subscribe to a premium plan to access the platform’s content.
The OTT market is expected to grow in the coming years as more and more people switch to online streaming services. The increasing availability of high-speed Internet and the growing popularity of smart TVs are also driving the growth of the OTT market.
Here are some additional details about the different business model:
Subscription-based model:
- This model is the most popular business model in the OTT market because it provides a predictable stream of income.
- Subscription-based platforms typically offer a variety of subscription plans at different price points to appeal to a wider range of consumers.
- Some subscription-based platforms also offer free trials to allow users to try the service before they commit to a subscription.
Advertising-based model:
- This model is famous for OTT platforms that offer free content.
- Advertising-based platforms typically generate revenue by selling advertising space to businesses.
- The amount of revenue an advertising-based platform generates depends on several factors, such as the number of users, demographics, and the type of content offered.
Transactional model:
- This model is less popular than the subscription-based and advertising-based models.
- Transactional platforms typically charge a fee to watch individual movies or TV shows.
- The revenue a transactional platform generates depends on the number of users who purchase content and the content price.
Hybrid model:
- This model is becoming increasingly popular among OTT platforms.
- Hybrid platforms typically offer a basic subscription plan with limited content and charge users for premium content or features.
- Hybrid platforms can also generate revenue from advertising.
The OTT market is a rapidly growing market with a lot of potential. OTT platforms offer various content and features to appeal to a wide range of consumers. The different revenue models OTT platforms use to allow them to generate revenue from multiple sources.
Revenue Of Top OTT Platform:
The revenue of the top OTT platforms has continued to grow in recent years. Here is an update on the payment of the top two OTT platforms based on the latest data:
- Netflix: Netflix reported revenue of $31.62 billion in 2022, a 24.6% increase from 2021.
- YouTube: YouTube’s parent company, Alphabet, does not disclose YouTube’s revenue separately. However, analysts estimate that YouTube generated $28.8 billion in 2022.
Other OTT platforms include Amazon Prime Video, Disney+ Hotstar, and Tencent Video. These platforms have yet to release their 2022 revenue figures, but they are all expected to have recorded significant growth.
Several factors drive the OTT market’s growth, including the increasing availability of high-speed Internet, the growing popularity of smart TVs, and the rising demand for on-demand content.
OTT platforms offer a wide variety of content, including movies, TV shows, live sports, and original programming. This attracts many consumers, including families, young adults, and seniors.
The OTT market is expected to grow in the coming years as more and more people switch to online streaming services.
Your note about the numbers being different is correct. The numbers I provided are based on the latest public data available. However, the revenue of OTT platforms can fluctuate from year to year, depending on several factors, such as the release of new content, the price of subscriptions, and the overall economic climate.
Future Of OTT Platforms:
The future of OTT is very strong, as evidenced by the industry’s rapid growth in recent years, particularly during the COVID-19 pandemic. OTT platforms offer several advantages over traditional TV, including a wider variety of content, on-demand viewing, and lower costs.
Disney+ is well-positioned to become a significant player in the OTT market by 2025. The company has a vast intellectual property library, including popular films and TV shows from Disney, Pixar, Marvel, Star Wars, and National Geographic. Disney+ is also investing heavily in original content, and it has already released several successful shows, such as “The Mandalorian,” “WandaVision,” and “Loki.”
Netflix is likely to remain the market leader in the OTT market in 2025, but it will face increasing competition from Disney+. Netflix is investing heavily in content production and plans to spend $17 billion on content in 2023. This investment is necessary to help Netflix retain its subscribers and attract new ones.
Prime Video is expected to be the third-largest OTT platform by 2025. Prime Video is a benefit of Amazon Prime membership, which includes a number of other benefits, such as free shipping and access to Amazon Music. Prime Video has a growing library of content, including original series and movies.
Here is a summary of the future of OTT by 2025:
- OTT will continue to increase and is expected to become the primary way people consume video content.
- Disney+ is well-positioned to become a significant player in the OTT market thanks to its vast library of intellectual property and its investment in original content.
- Netflix is likely to remain the market leader in the OTT market, but it will face increasing competition from Disney+.
- Prime Video is expected to be the third-largest OTT platform by 2025.
Other OTT platforms expected to grow in the coming years include HBO Max, Paramount+, and Apple TV+. These platforms offer a variety of content, including original series, movies, and live sports.
The OTT market is becoming increasingly competitive but also growing. Several factors drive this growth, including the increasing availability of high-speed Internet, the growing popularity of smart TVs, and the rising demand for on-demand content.
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