Despite most of the people are staying at home due to global pandemic, we can see demand and revenue for OTT (Over-The-Top) platforms have raised drasistically. We have seen several movies which have launched over the period during lockdown. Last week, Shoojit Sircar’s Gulabo Sitabo, starring Amitabh Bachchan and Ayushmann Khurranna was released on Amazon Prime on June 12 and many more yet to come to join on the row, like Vidya Balan-starrer Shakuntala Devi on the same platform may be between June and August, remake of the South Indian film, Muni 2: Kanchana, Laxmmi Bomb stars the powerhouse performer Akshay Kumar as the lead, the most awaited releases of 2020, Gunjan Saxena is one of the most awaited biopic. Janhvi Kapoor will be playing the role of Indian Air Force Flight Lieutenant Gunjan Saxena. The film is produced by Dharma Productions and will be released on Netflix, but the date is not finalized yet, are also in que to be launched on OTT platform.
Now, the users for the OTT platform are having exposure to multiple content across the world on yearly subscription over the price of one month movie ticket. This not only shows high urge of demand for OTT but also creates huge difference in revenue generating model for OTT over multiplexes.
OTT market basically runs on 3 types of revenue model:
1.AVOD (Advertising Video on Demand): business makes money through advertisement
2. TVOD (Transactional Video on Demand) : businesses charge users for every single watch, every single time. It is also known by other names such as PPV (Pay per View) or PPD (Pay per Download).
3.SVOD (subscription video on demand): business charges user as per subscription plans they will opt for.
OTT platforms are meeting the growing demands of viewers by supplying them with the new content which leads to increase of 46% viewership who are watching OTT. As per the sources, global viewership for OTT market increased by one- fifth and alone USA have one- fourth of the viewership which makes a difference over the time period.
To become profitable, OTT platforms will need to increase the proportion of paid subscribers and currently, subscription-based users are only 1 per cent of total base user and more than 50% of revenue is driven by in-app advertisement. If we see the plans of giant OTT platform NETFLIX and see how they focuses on SVOD. They have 4 plans namely Mobile, Basic, Standard and Premium. Let’s see the advantage of marginal utility per user which creates benefits to OTT platform like NETFLIX.
Therefore, if we see the table above, the user who purchased the 1-User and 4-Users subscription plan will pay same amount approximately on an average but NETFLIX get more revenue when 1-User account opt for 4-User plan. Therefore, psychology of paying more for getting HD/Ultra HD we try to persuade our surrounding like relatives, friends, families to opt for the plan and create market for giant OTT platform like NETFLIX.
In coming years, OTT platform tends to take over the market over the TV-shows or Multiplexes but the market segmentation of all three will always be different. Might be! increase in OTT demand will give good and new content to the users of rest two……………Give your suggestions.
By Shashank Kumar
Your research behind this article is commendable.... I get to know many unknown facts....
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