Over-the-top (OTT) refers to the delivery of video, audio, and other media services through the internet rather than traditional cable or satellite TV providers. With more and more people consuming content via streaming services, it’s no wonder businesses are turning to the OTT model. But what are the types of OTT business models companies need to know about?
1. Subscription-based model
The subscription-based model is one of the most common OTT business models out there. This model offers access to content (movies, TV shows, and documentaries) through a paid subscription. Netflix is an example of this model, as it offers different subscription options depending on the number of users and the streaming quality. OTT businesses usually offer a free trial period so that the user can try out the service before committing to a subscription.
2. Ad-based model
This model offers free access to the content in exchange for watching ads. As ad revenues are the main source of income for the platform, the content is available to the user for free. YouTube is an example of an ad-based model, which allows users to watch videos for free in exchange for watching ads. Platforms use cookies and other data to personalize ads and make them more relevant to the user.
3. Transactional-based model
The transactional-based model works on the pay-as-you-go principle, where the user pays for the content they watch or rent temporarily. Amazon Prime Video and Google Play Movies & TV are examples of transactional-based models. This model is effective for users who want to watch content once or twice, and not commit to a subscription service.
4. Hybrid model
The hybrid model combines more than one business model to create a unique offering. It’s the most complex model in the sense that it’s not always easy to differentiate which model is more prominent. Hulu is an example of a hybrid model, as it offers subscriptions to ad-free content but also features a more affordable ad-supported option.
Conclusion:
OTT business models are growing in popularity, and their success depends on the right choice of business model. The subscription-based model is a popular option, but the other three models shouldn’t be neglected. Businesses should evaluate their content and audience and choose the most suitable model accordingly. The future of OTT is exciting, and it’s important for businesses to follow its trends and make the most out of its potential.
