Over-the-top (OTT) platforms have emerged to be one of the major sources of entertainment in the last few years. After the success of Netflix, many television channels, production studios, even big tech companies also followed its lead.
To back this up: Disney has started Disney+, Apple has Apple+, Amazon has Amazon Prime Video, Comcast (NBC) has Hulu, Zee has Zee5 etc.
Major companies are coming to realise the importance of the Internet and entertainment in people’s lives nowadays. In the last two to three years, the idea of OTT platforms has taken a major leap and every major television and tech company has it’s own or at least has major shares in one OTT platform. All of them are challenging the main source of mass entertainment i.e. theatres. As all the theatres are currently shut down, these OTT platforms are making various marketing strategies and producing or buying exciting content for their platforms to garner more and more viewers.
How do OTT platforms run?
There are various types of OTT services like OTT television, OTT messaging, OTT calling. OTT messaging and OTT calling is observed in WhatsApp messaging and calling. The most popular OTT service seems to be OTT television as such video streaming platforms have been termed as “OTT platforms”.
OTT platforms have to stream HD content for a time duration ranging from thirty minutes to three hours. Relay of such quality image content might not have been possible without the underlying video coding format. A video coding format compresses the video for storage and transmission. The coding used is DCT (discrete cosine transform). Most streaming platforms like Netflix, YouTube and Hulu use H.264/MPEG-4 AVC video coding format.
Over-the-top or OTT content is defined as audio, video or other media delivered over the internet through IP packets. The video on your OTT platform is displayed on your computer in the same way you receive an email to your computer. But the access to OTT content is controlled by video platform by checking username and password credentials via an app or website.
How do OTT platforms get the content?
Every film is considered as intellectual property and the producer of the film gets copyrights for the film. If a person or company other than the production company uploads these films on to the Internet or displays the film to a large number of public, then the production company can sue the person in a court of law on account of Copyright infringement.
An OTT platform cannot display a film without getting permission from the producer of any film. This permission is called a licensing agreement. A licensing agreement allows one party to use the property of another party. Licensing agreements are most often created for copyrights of written materials an
For example, Netflix has had a F.R.I.E.N.D.S show in its content library for the last two years. To stream the show, Netflix acquires a licensing agreement to stream the show on its platform for a certain time period (one or three or five years) from the producers of F.R.I.E.N.D.S show. As part of the agreement, Netflix must pay a certain amount of money to the producers.
If Netflix is not satisfied by the viewing rate of the show, it doesn’t renew the licensing agreement and drops the show from its content library.
Classification of content based on Licensing:
- If an OTT platform gets licensing for a film that has already been released or broadcasted, then it is called as second-run licensed content. Example: Breaking Bad on Netflix
- If an OTT platform gets licensing for a film that is directly released on the platform without release in theatres or broadcast on television, then it is called as Original Licensed content. Example: House of Cards on Netflix, Gulabo Sitabo on Amazon Prime
- If an OTT platform produces its own films and releases it on the platform, then it is called as Self-produced original content.
Example: Stranger things on Netflix, The Mandalorian on Disney+
Due to the increase in a number of OTT platforms in the market, many producers are benefitting from licensing their movies, many directors are negotiating contracts with the OTT platforms to create unique and new content. Even though the theatres are shut and film festivals postponed, many film producers need not worry that their work will not reach the audience, as they can license the film to an OTT platform. Releasing their film on OTT platform may not benefit for high-budget films which depend on theatres for a great number of audience.
OTT platforms needs the cashflow to pay for licensing agreements and to renew them. So,
How do OTT platforms ensure cashflow?
OTT platforms’ service models:
- The very popular service model is a subscription model in which the viewer must pay money per month or per annum. Most subscription models are ad-free.
Example: Netflix, Disney+ etc.
- The second service model is an ad-based model in which the OTT platforms earn money by keeping ads between the videos and they get paid by the advertisers for promoting their product. In this model, the viewer need not pay any money. Example: YouTube, Hulu
- Third service model is pay-per-view model, in which viewer has to pay for a particular film once. Example: Comcast On-Demand, SonyLIV
- There are services that offer mix of the models like Amazon, who offers Amazon Prime Video as part of Amazon Prime package.
OTT platforms in India:
In India, the notion of OTT platforms has been present for less amount of time, but the number of players in OTTs has increased rapidly. After the launch of 1GB/day 4G data plan by Jio in 2016, there was Internet in everybody’s phone. This was such an advantage to OTT platforms that Netflix’s CEO Reed Hastings thanked Jio. When the audience for OTT platforms like Netflix, Amazon Prime and Hotstar started to increase in India, many production houses are also playing their hand by establishing their own OTT platform. The main advantage for these regional OTT platforms is that the content they produce or license will have more audience due to more relatable content and no language barriers.
OTT platforms available for Indian audience:
- Amazon Prime Video
- ALT Balaji
- Disney+ Hotstar
- Zee5(previously DittoTV)
- Eros Now
- MX Player
- Sony Liv
- Sun NXT
- The Viral Fever Independent
The Bad Side to all the Awesome Content:
- The increasing rise of licensing of films to OTT platforms and self-produced originals by OTT platforms is making good content unavailable for broadcast television which is usually cheaper than OTT platforms.
- Not everyone can afford a subscription for OTT platforms. Even if they do, most of them can subscribe to only one platform.
- If they like two shows and the shows are present with two different OTT platforms, then he/she has to subscribe to both of them.
OTT platforms are winning against cable and satellite broadcast due to their policy- “Watch Anything you want at Any time at Anyplace”. Due to this, OTT platforms provide freedom and assurance to their audience that they won’t miss their entertainment. Looks like OTT platforms are here to stay!
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