It\’s really simple how OTT (Over-The-Top) platforms make money. Most of them invest in producing some content or buying rights and later publish that content for users.
Did I just kill my whole blog post in a single line? What will you read now? Oops! 😛
You still have a reason to stay and gain more knowledge at a deeper level. No doubt, that is a general model at a shallow level. But every OTT platform has a different business model.
There are 3 typical ways to monetize the content on OTT platforms.
- TVOD (Transactional Video on Demand) – Users pay for individual pieces of content and not for the whole content library.
- Example: Google Movies, Apples iTunes
- SVOD (Subscription Video on Demand) – Users pay for the monthly subscriptions and get access to the whole content.
- Example: Netflix, Amazon Prime
- AVOD (Advertising-based Video on Demand) – The platform is cheap or free but advertisements are served to the users.
- Example: YouTube, MX Player
Let’s Talk How Top Individual OTT Platforms Make Money in India
It\’s tough to make money in India. Too many challenges!
Right from the piracy issues to the mindset of not spending on OTT, it\’s tough to sustain in India. Some OTT companies like Netflix had to introduce some India-oriented plans as well.
Netflix purely works on the premium segment. Their shows are premium, viewers are premium and they charge a premium. It’s very sorted.
Netflix might be charging heavily but viewers never had any issues with the quality of its content. It has years of the accumulated content library now.
Most importantly, AI recommendations are a very powerful tool in Netflix. Based on your watch history and other data points, it very well understands what you might like to watch.
Just to match the Indian purchasing power, Netflix introduced mobile-only plans which became affordable.
Overall, Netflix does not really need additional reasons to not charge so high. The quality says so. If you are more into international content, Netflix is your best friend.
Amazon Prime plays the smartest for the Indian market.
The content mostly revolves around Indian culture and people. If you are someone who is more into Hindi or regional content then Amazon Prime is the best option for you.
However, Amazon is not only targeting the Indian market with the best contextual content for Indians. They even provide every possible thing from their product lines.
Purchase Amazon Prime membership and you will get speedy and free delivery of Amazon eCommerce store, heavy discounts, and even exclusive deals.
Apart from that, members get free ebooks on Kindle, free music, and even some cloud storage.
Amazon Prime membership literally unlocks a different world for its users. This creates a recurring amount from subscriptions.
Why would any member move to Flipkart for buying anything? This creates a complete ecosystem where users are looped to pay regularly.
India considers cricket as its national religion and this is where Disney+ Hotstar wins all the brownie points. The plans are affordable and almost every cricket fan buys a subscription to watch cricket.
Once caught on the net, users keep on buying subscriptions regularly.
Not only you can directly buy the plans but almost all the network providers in India give Disney+ Hotstar plans to their users.
But the game of monetization is not over yet! This OTT platform makes money from advertisements as well.
You are not willing to pay for watching content? Alright. Unlike Netflix and Amazon Prime, Hotstar still lets you watch some of its content for free but monetizes from ads.
How does MX Player make money if it never asks for any subscription fees?
It\’s full of advertisements. If you open MX Player, you will get more ads than the actual content. That\’s the whole revenue model of this OTT platform.
But it\’s not all about ads.
You might have seen several brand placements in the original series of MX Player. Brand heavily pays for sponsoring and getting mentioned in the web series.
This is a good way to get a brand recall value if the products are strategically placed in the scenes.
No wonder all OTT platforms somehow make money from the above methods only. Some sell content at a premium price while others earn through advertisements.