What is OTT and Is It Right for Me?

Written by
Danielle C.
May 28, 2021

You’ve established an audience and produced content that you’re ready to share on a larger scale. Now it’s time to consider your next move. How can you effectively reach your audience and gain new subscribers without breaking the bank?

Researching your next move is exhausting enough as is, not to mention having to wade through the inundation of vaguely familiar concepts without context. In your search for the best way to build your own streaming service, you’ve likely come across the concept of OTT. OTT is Over-the-Top streaming, a now household term referring to the cord-cutting of video subscription services that are streamed “over-the-top” of cable network providers. Much of how we navigate the streaming world functions as OTT, with the largest companies: Netflix, Hulu, and Disney+ now creating an OTT version of "channel surfing" and nearly 80 % of households typically subscribing to more than one OTT provider. OTT can certainly be a fantastic solution for creators to house their content and successfully cater to their growing audience. Here we provide a breakdown of the most important facets to consider while you determine if OTT is right for you.

Undoubtedly, budgeting is at the forefront of your deliberation. While OTT distribution dominates the streaming industry as the best way to distribute content globally and across devices, the fees that go into development of major OTT platforms can be a costly up-front investment. Custom software engineering for OTT apps has been historically reserved for the Hollywood elite with attempts like Quibi (remember them?) serving as discouraging examples for indie creators and studios looking to build a sustainable home base for their content and community of subscribers. Some creators, studios, and distributors opt for a cheaper, whitelabled option for OTT and subscription video that provides some customization of a platform without the extremely high cost of custom software engineering, streamlining some of the development hassle. This is still not without a hefty financial burden of startup fees, monthly charges, and discouraging subscriber fees. This is not to mention the pay-to-play fees tacked onto each app should you decide to distribute across multiple streaming devices, appeasing both Apple and Android or Firestick and Roku users alike. But app development alone is a sticker-shock venture compounded by “the what’s next” marketing and ongoing infrastructure and development costs.

Alongside the sunk cost of app development, OTT marketing is vital to consider before you commit to this path. The big name OTT services we mentioned earlier invest billions in yearly marketing costs. In 2020, Netflix spent $2.23 billion in marketing expenses worldwide. This was an even smaller budget than allocated by Netflix in 2019 despite one of their most frequently streamed shows, The Office, moving to Peacock TV. New and fledgling OTT platforms like Peacock or Paramount+ that debuted in 2021 had snowballing marketing campaigns leading up to their launch with upwards of $1.5 million spent by both OTT’s on their respective launch days alone! For Paramount+, this included half a million dollars spent solely on Instagram ads on launch day.

While creators should be cautious about upfront spending, it’s important to skate along that middle ground of not minimizing costs when developing your OTT subscription video solutions by cutting corners. Luckily, with the current unbundling of subscription media and the quickly developing trends towards both valuing independent creators and direct-to-consumer subscription video or OTT, creators can now develop an OTT streaming service, stream direct-to-viewer, and earn a sustainable recurring income while nurturing their existing audience on special.tv.

Unsung marketing expenses are certainly a risk of pursuing the OTT route, though perhaps just as essential for consideration is subscriber retention and churn anticipation. Heading off voluntary churn with new and exciting content for current subscribers is a key facet of your business model that needs to be considered. Moreover, working out the kinks of involuntary churn in a new OTT platform can be frustrating and pricey. These front-end financial burdens can be significant deterrents for talented creators whose content is ready for an expansive audience. By the end of this OTT journey, you’ll have invested your resources in an ultimately cost prohibitive venture that detracts from where your money could be better utilized, like production, channel marketing, and viewer retention.

With special.tv, you get to focus on what you do best: build content. Special.tv’s silverlabel concept eliminates the cost of OTT app development and is free to start, with a 10% flat fee once you go live no matter the size of your channel. Your content will be easily accessible to new subscribers browsing through special.tv’s platform which is an extra organic way to increase viewership at no extra cost to you. Unlike OTT, there is no fee to stream across various apps or reach new subscribers. We know that the key to longevity for your channel is a subscriber base that grows with your content development. Whether you’ve got a hundred subscribers or a hundred thousand, you’ll only ever be charged 10% for partnering with special.tv. What you get in return is a platform specifically built to launch video creators' OTT services with no upfront costs, optimized to acquire and retain paying subscribers, while simultaneously enabling independent creators, studios, and distributors to stream direct-to-consumer with simple, enterprise streaming technology.

By taking advantage of special.tv, you significantly lower involuntary churn rates and eliminate those upfront labor costs. This allows you to allocate funds toward the growth of your channel via multifaceted marketing campaigns that attract new subscribers with more immersive content that keeps your audience coming back for more.

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