Over the top (OTT) entertainment has never been more popular. The market for OTT services is expected to eclipse $160 billion in 2020, good for an annual growth rate (CAGR) of 55%. Sure, some of that growth can be attributed to Covid-19. However, experts still predict a CAGR of 14.0% in the years to come.
This data is the best case for why your brand should expand to OTT. Doing so could increase your revenue significantly. It’s also never been easier to start an OTT channel. Keep reading to get a closer look at why your brand should seriously consider embracing OTT.
Content owners today have many different channels to choose from. Some, like Youtube, offer exciting ways to directly connect with audiences. However, even Youtube can’t match the CPMs offered by OTT. While Youtube pays an average of $7.60 per 1,000 views, OTT channels can pay out as much as $30 per 1,000 views.
Creating an OTT channel will also give your company independence from Google while exposing your brand to new audiences. Let’s face it, cable subscription services aren’t what they once were. Globally, companies like AT&T, DirecTV, and U-Verse lost approximately 2.1 million customers in the second quarter of 2020. However, the majority of these customers still consume digital content. They’re just doing so with OTT streaming services like Netflix, Disney+, and Hulu.
Experts refer to these consumers as cord-cutters. By the year 2022, it’s predicted that the cord-cutting population in the United States will reach upwards of 55 million. That number is universally projected to grow in the years to come.
This means that if your brand is working towards growth, creating an OTT channel could be just what it needs to succeed. Doing so will make your content available to an audience of millions. Even better, your customers will be able to purchase your content without having to pay for channels they don’t want. This potential for customization is key to what’s making OTT channels more and more popular among consumers.
Now is the perfect time for your brand to expand its OTT offerings. This used to be a landscape for major corporations like Disney and Netflix. Now, dozens of pay-TV operators, television networks, and even sports leagues are launching their own channels.
They’re doing so because the costs of setting up an OTT channel are greatly outweighed by the potential they offer to profit. Brands today also have options when creating consumer-facing OTT applications.
One popular choice is software-as-a-service or SaaS. This is a cloud-based approach to OTT streaming, which utilizes media processing and delivery from public cloud services like Google Cloud and Vimeo OTT.
This approach enables your brand to expand into OTT offerings without having to make a major financial investment upfront. You’ll be able to add or remove channels easily and will have no problem scaling up your services to meet consumer demands.
OTT entertainment is an industry that’s full of potential. However, that doesn’t mean your brand should enter into it blindly. Instead, there are several factors it will want to consider before getting started.
First, brands should understand the importance of monetization. Before investing in an OTT channel, your company should have a clear monetization strategy. The most effective sources of revenue are paid subscriptions and selling advertisements. For example, Netflix is an OTT service that brings in $950 million monthly from subscriptions alone. Hulu, an OTT service that sells targeted ads, made $1.5 billion on it in 2018. Your OTT channel will enable targeted advertising, making it an appealing choice for a wide variety of companies.
Your company should also have a solid distribution strategy before creating an OTT channel. It should know how it will use the ease of access provided by OTT streaming to reach its target audience. Similarly, your brand will want to brainstorm ways to personalize its offerings to ensure its meeting the unique needs of its customers with its OTT channel.
Creating an OTT channel is a smart way to increase your brand’s reach while creating a new revenue stream. However, the success or failure of your new channel will depend on how you develop, market, and manage it.
VTV Studio provides white-label OTT solutions for content owners. We’re the experts who can help your brand expand into OTT with customized technological development and professional operational management of your channel. Consider reaching out to us to learn how we can make your brand’s expansion into OTT a successful one.