With the emergence of over-the-top platforms in the past few years, the landscape of the entertainment industry has transformed completely. The convenience of watching their favorite content anytime, anywhere has made users inclined towards OTT platforms. That’s one of the primary reasons why the percentage of users in this segment is drastically increasing and is expected to reach the 45.7% mark by 2023.
This increasing popularity has made businesses in the e-learning, media, and entertainment industries understand the significance of OTT platforms. Moreover, the ease of content delivery and the scope of growth opportunities become some of the prominent reasons to invest in OTT app development.
The ever-changing consumer demands and diverse business possibilities have made companies consider OTT app development straight away. Therefore, it became crucial to discuss the valuable insights highlighting the significance of OTT platforms and the benefits you can reap by developing one for your business.
Table of Contents
- What Are OTT Apps and How Do They Dominate Viewing Patterns?
- What Are the Prominent Reasons to Invest in OTT App Development?
- What Is the Ideal OTT Monetization Strategy for OTT Platform Development?
- What Is the Average Cost to Develop an OTT App?
- What Are the Major OTT App Development Challenges?
- How to Begin OTT App Development with Appventurez?
- FAQs on OTT App Development
What Are OTT Apps and How Do They Dominate Viewing Patterns?
OTT (or over-the-top) applications are platforms that allow users to access and stream content online with the help of internet connectivity. Simply put, they are video streaming platforms where users can watch their favorite shows, movies, or other video content.
It would be surprising to know that people have become so ‘addicted’ to consuming content online that they spend around 38 hours monthly on it. It means they devote almost a full workweek of time streaming online content on different OTT platforms.
In fact, several students and working officials enhance their skills by streaming online courses and learning through them. Moreover, others spend their time on OTT to stay unflappable during hectic day-to-day schedules.
But how does everything change and why is it the right time to invest in OTT app development?
Well, the evolution of the 5G network and improved Wi-Fi bands have opened the doors to high-speed internet connectivity. Due to this, online streaming becomes easily feasible without facing any buffering issues. Also, the COVID-19 pandemic also boosted the growth and popularity of video streaming apps, since people didn’t have much to do during the lockdown.
Moreover, the rapid increase in the global smart TV market has also made it possible for users to enjoy OTT content over big screens. The ease of accessibility of the OTT platforms from different devices other than smart TVs, such as smartphones, laptops, and tablets makes them favorable to users.
Besides users, the OTT space has unlocked golden gates of opportunities for content creators as well. With the changing behaviors of the global viewers’ audience, it has become hard to predict what kind of content will bring the world to its feet. For instance, you never know how a toy unboxing video channel can make a school-going kid a millionaire.
What Are the Prominent Reasons to Invest in OTT App Development?
Lately, streaming online content on a daily basis has become a part of people’s lives. In fact, 70% of Gen Z audiences watch over 3 hours of OTT content on their smartphones every day. In such a case, having an OTT app can help you reach your customers better and share your services in an improved manner. To be specific, here are some top reasons to invest in OTT app development:
Upsurge in the Growth of Video Content
The overall consumption of video content has increased at an unprecedented rate. Not just as a pastime hobby, but accessing video content to learn and earn new skills has also become common. YouTube has become the largest contributor in this segment with its over-extensive range of content.
In fact, it is reported that an average OTT user spends around 100 minutes watching OTT content every day. In such a dynamic and expanding market, investing in developing an OTT platform could be a great option. And there’s no need to worry about the existing OTT giants, as people still prefer trying different platforms as per the choice of content and their convenience.
Enhanced Consumer Outreach
Today, over 85% of US millennials have subscribed to at least one OTT platform and installed its dedicated app on their device as well. But why?
Well, the primary reason is users easily connect with content that is relatable and intended for them. Businesses must focus on the services that their users desire rather than what they want to sell at any cost.
The OTT, unlike following a “hard sell’ approach, relies on the concept of content marketing that evolves interest and encourages consumers to use their services. It helps businesses get an extensive user base out there to reach and connect with. Moreover, since an OTT mobile app can be accessed directly on the go, outreaching users has become much easier than before.
Better Analysis of Consumer Behavior
By integrating an analytics tool, you can easily analyze the browsing behavior of your users. You can easily keep a tab on what they like or dislike, how they react to ads, and what kind of content they usually prefer to watch.
These analytics can help you provide your users with personalized content, improving the user experience and making your app more engaging. For instance, the recommendation engine of Netflix analyzes the streaming pattern of users and offers a “More like this” section to suggest similar content. This digital transformation in Netflix bridged the gap between users and their convenience, enhancing the user experience extensively.
Extended Revenue Opportunities
Various factors such as the pandemic, expansion of the smartphone market, and rise of digital technologies like 5G have fueled the growth of the OTT app development market worldwide. Due to these factors, the development of OTT platforms turned out to be a perfect opportunity for businesses to generate massive revenue.
One of the major reasons for this is the recurring subscriber base that guarantees a constant flow of revenue. Moreover, the ROI is generally great since businesses need to invest only in the initial phase while setting up the platform; its maintenance cost is negligible. Besides this, businesses can generate revenue through multiple media, such as advertisements, subscriptions, merchandising, etc.
Increased Conversion Rates
One of the most important reasons to invest in OTT app development is that you want to connect with a massive audience instantly through relevant content. But why do you need an application for that? In other words, you can simply release videos on the web and get the same reach and views, right?
Well, most of the time, no. The reason is there are millions of interactive videos on the web like yours, especially when you pick the exact topics. In such conditions, the competition to get higher engagement and conversions is at its peak.
However, that will not be the case when you develop your own OTT app, since you launch your content on a unique and convenient platform. Here, you will only receive competition from your own videos, not from the content of other creators. Besides this, you will also get a unique set of audiences who are genuinely interested in your content, increasing the chances of higher user engagement and accelerated conversions.
Create a Permanent Bond with Customers
When you share your content on the web, there are chances that your target audience will land on them, watch them, and then leave the page. They might return but the possibilities are pretty low, especially when there is similar content out there. Therefore, it becomes challenging to create a permanent bond with them.
However, when you develop an OTT app, you can frequently interact with the users through push notifications, live chats, events, newsletters, etc. conducted over the same platform. Daily interaction with your customers will not only enhance brand loyalty but also strengthen the bond with them. This is indeed one of the top benefits of investing in OTT app development.
What Is the Ideal OTT Monetization Strategy for OTT Platform Development?
It all depends on your marketing and user engagement practices that determine how a user will be ready to switch from being a viewer to a subscriber. That’s why it becomes crucial to use a combination of different app revenue models and monetization strategies to scale your business accordingly. The most popular OTT monetization strategies for OTT platform development include:
1. Free-to-watch model
This model is like a trial version of any service. It is intended to enhance brand awareness and attract users by allowing them to view video content for free. Free-to-watch content usually consists of short video clips or teasers ideal for limited-time trials and social media posts. MX Player, Goku TV, Viki, and Roku are some platforms that offer content for free.
2. Advertising Video on Demand (AVOD)
This ad-based monetized model allows viewers to access content for free in exchange for watching short and targeted advertisements. Businesses generate revenue through this model by charging advertisers for showcasing the ad commercials on their OTT platforms.
It is often reported that 62% of viewers have no issues watching an advertisement if that helps them watch content for free. In fact, 47% of them even believe that these ads are useful. This monetization strategy is best for mid-funnel users who are interested in your content but not willing to pay for it. These ads can be run at the beginning of the video (pre-roll), amidst the content (mid-roll), or at the end of it (post-roll). Some popular AVOD-based OTT platforms include Youtube (non-premium) and Pluto TV.
3. Subscription Video on Demand (SVOD)
As the name suggests, this model allows viewers to watch unlimited content available on an OTT platform in exchange for a recurring subscription fee. The business owners can set specific plans from which users can choose one as per their needs and preferences.
For instance, you can create these plans based on the number of devices on which the content could be accessed simultaneously, video quality (SD, HD, Full HD), or ad-free experience. Besides this, you can also create plans based on validity (monthly, quarterly, or yearly).
The best thing about subscription-based models is that they generate steady revenue. SVOD is suitable for those users who prefer consistent streaming over advertisements. For a better user experience, these subscription-based models must be integrated with advanced features like bill repayment reminders and secure payment gateways. Netflix, Disney+, Amazon, HBO Max, etc. are some of the OTT platforms based on SVOD models.
4. Transactional Video on Demand (TVOD)
In this OTT monetization model, users only pay for the content they wish to watch instead of opting for a time-based subscription. Primarily, they do not subscribe to the entire platform but to some exclusive content, they are interested in.
There are two types of transaction-based models in the OTT domain. The first one is Electronic Sell Through (EST), where the users pay once and they get permanent access to that specific content. The other one is Download to Rent (DTR) in which they get access to a particular content for a limited period of time. Some popular companies that rely on TVOD models are Hulu and Sky Box Office.
5. Hybrid Model
The hybrid model is nothing but a combination of all these models where some content is free, while others could be accessed by paying some amount. Apart from this, revenue is also generated through advertisements. Nowadays, this monetization model is used by many companies as it offers several opportunities to improve customer retention and increase revenue.
What Is the Average Cost to Develop an OTT App?
Analyzing the app development cost for an OTT platform depends on several aspects. Below are the primary factors that can significantly influence the overall cost of building your OTT platform:
- Type of application
- App design complexity
- Tech stacks and technologies used
- Choice of app development platform
- Type of development team
- Location of developers
- Time taken to develop the app
Considering these factors beforehand can help you estimate the exact OTT app development cost for your business. On average, it might cost you somewhere around $25000 to $50000 to develop a fully-fledged OTT platform like Netflix, HBO Max, or Hulu. Besides cost, the time taken to develop an on-demand custom OTT app would be around four to eight months, depending on the app’s specifications.
What Are the Major OTT App Development Challenges?
If you have made it to this point, you might have already understood the potential reasons to invest in OTT app development. However, with a bucket full of advantages, developing an OTT platform can also bring significant challenges that businesses must consider beforehand.
OTT App Development Can Cost a Massive Capital Investment
Well, this is one of the most common notions that creating a professional OTT platform needs a significant amount of investment. This is because an OTT platform must be highly interactive and engaging, especially when there are industry leaders dominating the market.
Developing an OTT App Is a Time-Consuming Process
Well, this is not a fact, but mostly it happens. The reason is that when you offer your OTT app development project to an inexperienced development team, completing it usually takes more time without compromising the quality aspect.
There Is Always a Risk of Getting Rejected
There is a specific criterion set by mobile app stores that must be met in order to get your OTT application published. That’s why it is recommended to hand over your project to an experienced development company who are well-versed with all such guidelines.
How to Begin OTT App Development with Appventurez?
The OTT media revenue is projected to reach the $210 billion mark by 2026, and with that, the global OTT platform app development market will significantly flourish, as well. Also, since digital transformation is at its peak, this could be a great time to consider OTT app development for your business.
So, if you are looking for an immersive OTT app development experience to capitalize on the growth, join hands with a professional app development company like Appventurez. Our team of experts carefully analyzes your business requirements and comes up with a customized plan especially designed for you. Moreover, our expertise in digital transformation can assist you in crafting a promising app for your OTT business.
We have hands-on experience with ground-breaking technologies and abilities to leverage the best of business opportunities that can help you accomplish your desired goals. So, don’t wait; now is the time to add your name to the list where Netflix, Amazon Prime, and other popular OTT platforms already exist.
FAQs on OTT App Development
Q1. What is the main purpose of OTT platforms?
Ans. The over-the-top platforms primarily offer D2C video content services where users can easily access premium content they are interested to watch. This helps businesses connect with their audience and generate revenue on a large scale.
Q2. What is the impact of OTT app development on your business growth?
Ans. By investing in OTT app development, you can gain complete control over your OTT platform and the content present in it. With your unique and intuitive OTT platform, you can build a genuine audience, monetize your content, enhance brand awareness, and increase user experience.
Q3. What is the future of OTT streaming apps?
Ans. The video streaming market is expanding and becoming more popular every day, and it is estimated to reach $115 billion by 2026. These ever-growing figures show that OTT apps are the future of video businesses and these platforms help it to become a multi-billion dollar industry.
Q4. What are the major industries where OTT apps could be beneficial?
Ans. The primary industry where OTT apps are doing wonders is the entertainment and media sector. With improved technologies and advanced features of video streaming apps, the process of content sharing and accessing becomes easy more than ever. Besides this sector, the health and fitness, education, and gaming industry also get benefitted from OTT platforms.