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Understanding the Business Model of OTT Platforms
and
The Rise of OTT Platforms
Submitted by-
Abhilash Dutta
Introduction
The Bollywood film industry has
been suffering in recent years
 One of the biggest reasons is the rise of OTT platforms.
 OTT platforms, or Over-the-Top platforms, are streaming services that allow users to watch movies and TV
shows over the internet
 People are increasingly choosing to watch movies and TV shows at home on OTT platforms instead of going
to the cinema
Definition of OTT platforms
1 Accessibility
OTT platforms deliver content
directly over the internet,
bypassing traditional broadcast
and distribution channels.
2 Content Variety
They offer a wide range
of content, including
movies, TV shows, and
original productions.
3 On-Demand
Viewing
Users have the flexibility
to watch content at any
time and on any device.
The History of OTT Platforms
 Netflix was one of the first OTT platforms
 The company was founded in 1997 and initially offered a DVD rental service by mail
 In 2007, Netflix began offering streaming services
 Netflix quickly became a popular choice for viewers around the world
The Doordarshan Era:
A Glimpse into the Beginning
 India's television journey began in 1959 with the launch of Doordarshan (DD)
 Initially, broadcasts were limited to Delhi for a few hours daily,
Black and white transmission continued until 1982
The DTH Revolution: Expanding Choices for Viewers (2000 onwards)
 The year 2000 marked a significant turning point with the introduction of
Direct-to-Home (DTH) satellite television
 DTH offered viewers a wider range of channels compared to traditional cable
TV, giving them more control over their viewing experience
The Rise of OTT Platforms in India
The journey began with Big Flix in 2008, offering a limited library
with a pay-per-view model.
A shift occurred in 2013 with the arrival of aggregators like Ditto TV and
Sony LIV, introducing subscription-based models and wider content selection.
The entry of Hotstar (now Disney+ Hotstar) and Netflix in 2015 and 2016,
respectively, further fueled growth with original content and increased competition
Reliance Jio's launch in 2016 with affordable data plans significantly increased
internet penetration, driving OTT platform adoption.
Today, India boasts over 40 OTT platforms offering diverse content, making them
a primary source of entertainment for many viewers.
Content Acquisition
Buying Broadcasting Rights:
Platforms acquire rights to stream existing films
and TV shows.
Self-Production: Platforms invest in
creating their own original content.
Pay a monthly fee for unlimited access to content.
SVOD (Subscription Video on Demand)
Benefits: Predictable recurring revenue, high customer lifetime value.
Challenges: Requires strong content library, competition is high.
Monetization Models
The best example of the SVOD video monetization model is Netflix.
Other popular examples are Amazon Prime Video, and Disney+.
Pay per view for individual pieces of content.
TVOD (Transactional Video on Demand)
Allows monetization of premium content, users only pay for what they watch.
Challenges: Revenue can be unpredictable, requires frequent high-value content.
Monetization Models
Some of the popular examples of TVOD
services are Apple's iTunes, Sky Box
Office and Amazon's video store
The Evolution and Impact of OTT Platforms: A Deep Dive into the Future of Entertainment
Free content with ads.
AVOD (Advertising-Based Video on Demand)
Benefits: Reaches a large audience, good entry-level model.
Challenges: Relies on ad revenue, user experience can be disrupted by ads
Monetization Models
Example- YouTube , Facebook Watch
Combines different models, often AVOD and SVOD
Hybrid Model
Benefits: Offers flexibility, caters to different audience preferences.
Challenges: Requires managing multiple models, can be complex for users.
Monetization Models
Hybrid Model
Monetization Models
Balancing Content Investment and Returns:
Marketing Costs and Audience Engagement
Future Adaptation and Innovation:
Challenges Faced by OTT
Platforms
Unpredictability of Content Acquisition:
 Difficulty in predicting audience preferences and the success of content.
 Risks associated with investing in acquiring rights to films and TV shows.
• Struggle to strike a balance between investing in quality content and generating significant returns.
• Pressure to optimize content acquisition costs amidst increasing competition in the OTT market.
 High marketing expenses associated with promoting content releases on OTT platforms.
 Importance of engaging and retaining subscribers through targeted marketing strategies
 Need for continuous adaptation and innovation to stay competitive in the dynamic OTT landscape.
 Exploration of new revenue streams and business models to sustain growth in the long term.
The Future of OTT in India
The OTT market in India is expected to continue
to grow in the coming years.
The increasing availability of affordable
smartphones and internet access will drive the
growth of the OTT market in India.
Deloitte estimates that the OTT market will see
a 20% growth each year and will be valued at
₹1,200 billion by the end of the decade.
The Future of OTT in India
Challenges Faced by Bollywood Due to OTT Platforms
Competition for viewers: OTT platforms are now competing with cinemas for viewers, which has led to a
decrease in cinema ticket sales. This can hurt the revenue of Bollywood films, which traditionally rely on
theatricalreleasestorecouptheirinvestment.
Additionally, OTT platforms are now paying less for film rights, as they are no longer guaranteed to be
successfulincinemas
OTT platforms have transformed entertainment
with diverse content and flexible models. Yet,
predicting audience preferences and revenue
remains a challenge. Success demands
understanding their business model and adapting
to evolving trends."

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The Evolution and Impact of OTT Platforms: A Deep Dive into the Future of Entertainment

  • 1. Understanding the Business Model of OTT Platforms and The Rise of OTT Platforms Submitted by- Abhilash Dutta
  • 2. Introduction The Bollywood film industry has been suffering in recent years  One of the biggest reasons is the rise of OTT platforms.  OTT platforms, or Over-the-Top platforms, are streaming services that allow users to watch movies and TV shows over the internet  People are increasingly choosing to watch movies and TV shows at home on OTT platforms instead of going to the cinema
  • 3. Definition of OTT platforms 1 Accessibility OTT platforms deliver content directly over the internet, bypassing traditional broadcast and distribution channels. 2 Content Variety They offer a wide range of content, including movies, TV shows, and original productions. 3 On-Demand Viewing Users have the flexibility to watch content at any time and on any device. The History of OTT Platforms  Netflix was one of the first OTT platforms  The company was founded in 1997 and initially offered a DVD rental service by mail  In 2007, Netflix began offering streaming services  Netflix quickly became a popular choice for viewers around the world
  • 4. The Doordarshan Era: A Glimpse into the Beginning  India's television journey began in 1959 with the launch of Doordarshan (DD)  Initially, broadcasts were limited to Delhi for a few hours daily, Black and white transmission continued until 1982 The DTH Revolution: Expanding Choices for Viewers (2000 onwards)  The year 2000 marked a significant turning point with the introduction of Direct-to-Home (DTH) satellite television  DTH offered viewers a wider range of channels compared to traditional cable TV, giving them more control over their viewing experience
  • 5. The Rise of OTT Platforms in India The journey began with Big Flix in 2008, offering a limited library with a pay-per-view model. A shift occurred in 2013 with the arrival of aggregators like Ditto TV and Sony LIV, introducing subscription-based models and wider content selection. The entry of Hotstar (now Disney+ Hotstar) and Netflix in 2015 and 2016, respectively, further fueled growth with original content and increased competition Reliance Jio's launch in 2016 with affordable data plans significantly increased internet penetration, driving OTT platform adoption. Today, India boasts over 40 OTT platforms offering diverse content, making them a primary source of entertainment for many viewers.
  • 6. Content Acquisition Buying Broadcasting Rights: Platforms acquire rights to stream existing films and TV shows. Self-Production: Platforms invest in creating their own original content.
  • 7. Pay a monthly fee for unlimited access to content. SVOD (Subscription Video on Demand) Benefits: Predictable recurring revenue, high customer lifetime value. Challenges: Requires strong content library, competition is high. Monetization Models The best example of the SVOD video monetization model is Netflix. Other popular examples are Amazon Prime Video, and Disney+.
  • 8. Pay per view for individual pieces of content. TVOD (Transactional Video on Demand) Allows monetization of premium content, users only pay for what they watch. Challenges: Revenue can be unpredictable, requires frequent high-value content. Monetization Models Some of the popular examples of TVOD services are Apple's iTunes, Sky Box Office and Amazon's video store
  • 10. Free content with ads. AVOD (Advertising-Based Video on Demand) Benefits: Reaches a large audience, good entry-level model. Challenges: Relies on ad revenue, user experience can be disrupted by ads Monetization Models Example- YouTube , Facebook Watch
  • 11. Combines different models, often AVOD and SVOD Hybrid Model Benefits: Offers flexibility, caters to different audience preferences. Challenges: Requires managing multiple models, can be complex for users. Monetization Models
  • 13. Balancing Content Investment and Returns: Marketing Costs and Audience Engagement Future Adaptation and Innovation: Challenges Faced by OTT Platforms Unpredictability of Content Acquisition:  Difficulty in predicting audience preferences and the success of content.  Risks associated with investing in acquiring rights to films and TV shows. • Struggle to strike a balance between investing in quality content and generating significant returns. • Pressure to optimize content acquisition costs amidst increasing competition in the OTT market.  High marketing expenses associated with promoting content releases on OTT platforms.  Importance of engaging and retaining subscribers through targeted marketing strategies  Need for continuous adaptation and innovation to stay competitive in the dynamic OTT landscape.  Exploration of new revenue streams and business models to sustain growth in the long term.
  • 14. The Future of OTT in India The OTT market in India is expected to continue to grow in the coming years. The increasing availability of affordable smartphones and internet access will drive the growth of the OTT market in India. Deloitte estimates that the OTT market will see a 20% growth each year and will be valued at ₹1,200 billion by the end of the decade.
  • 15. The Future of OTT in India
  • 16. Challenges Faced by Bollywood Due to OTT Platforms Competition for viewers: OTT platforms are now competing with cinemas for viewers, which has led to a decrease in cinema ticket sales. This can hurt the revenue of Bollywood films, which traditionally rely on theatricalreleasestorecouptheirinvestment. Additionally, OTT platforms are now paying less for film rights, as they are no longer guaranteed to be successfulincinemas
  • 17. OTT platforms have transformed entertainment with diverse content and flexible models. Yet, predicting audience preferences and revenue remains a challenge. Success demands understanding their business model and adapting to evolving trends."