OTT Business Plan: A Comprehensive Guide to Launching Your Own OTT Platform
OTT industry is one of the fastest-growing sectors of the digital media industry. There is no doubt that launching an OTT platform is a great business opportunity. But to succeed in this highly competitive market, you need to have a comprehensive OTT business plan.
OTT media market has seen tremendous growth in recent years, with more and more people turning to streaming services for their entertainment needs. As the demand for OTT content continues to rise, there is a huge opportunity for operators to launch their own OTT platforms. In this business plan, we'll guide you through the process of launching your own OTT platform, covering everything from market research to monetization strategies.
We’ll discuss what an OTT business plan is and why you need one. We’ll also explore the different components of an OTT business plan and the key steps to follow when creating your plan. Finally, we’ll look at some of the challenges you might face when launching a successful OTT platform. Let’s get started!
What Is an OTT Business Plan?
The OTT business plan is a document that outlines the business strategy and goals of an OTT platform. It defines the objectives and activities that need to be undertaken to successfully launch a profitable OTT platform.
The business plan should include a detailed description of the platform, the target audience, technology and services, pricing and monetization strategies, as well as promotional and marketing activities.
Why Do You Need an OTT Business Plan?
Developing a business plan is a key step in starting any new business. OTT business plan is no different. An OTT business plan provides guidance as to how you will deliver your digital services and content, how you will make money, and how you will manage and grow your business. It also lays out the goals and objectives of your OTT business, as well as a plan of action, budget, and timeline. By creating an OTT business plan, you can ensure you are making the best decisions for your business in the long term.
Components of an OTT Platform Business Plan
Vision and Goals
The vision and goals of the OTT platform should clearly communicate the purpose of the business. You need to find the answers to what you wish to achieve. Also, define how you will measure success. Then you need to decide on your goals and select strategic goals in particular. Finally, you will put your passion into defining your vision for the whole project.
An analysis of the OTT industry should be included in the business plan. This should include a detailed overview of the competitive landscape, key players, and trends in the OTT industry.
Technology and Services
The business plan should include a description of the technology and services to be used to deliver content and services to customers. This should include a description of the delivery platform, analytics, content management, and monetization solutions.
How can you be sure that your OTT service will be a success?
Starting an OTT service can be a challenge that requires covering a number of aspects to turn the project into a successful endeavor. Read on to find out what roles the vision and the goals play in the success of your project.
Proper Planning and Research are the Keys to Success
Just like with any other business project, there’s never a guarantee of success. However, with proper planning and research, you can set yourself up for great achievements. A lot of businesses quickly get in trouble because of a lack of initial planning and failure to properly validate their project before offering new services on the market.
Create a Plan
The first step in this journey is creating a plan that will help you (and make you) look at your OTT project from different angles and get you the necessary answers regarding your project and how you’re going to make it work.
To learn more about creating a marketing plan for a successful OTT service download our whitepaper “HOW TO PREPARE A MARKETING STRATEGY THAT WILL SUPERCHARGE YOUR IPTV/OTT SERVICE”
This preparation process is not easy but it is worth the effort because if you do it properly it will save you a lot of time and money later on, not to mention save you from unnecessary headaches.
If you need help any step of the way feel free to get in touch and our UniqCast experts will be more than happy to answer any questions you might have. With successful IPTV/OTT/DVB projects for big and small service providers on 4 continents, we have plenty of IPTV/OTT know-how that can save you both time and money.
Before you do anything write down your vision for this project.
What do you wish to achieve and where do you see it going in the near and long-term future?
Defining your vision is key for setting goals in 1, 3, 5, 7, or 10 years. To make your IPTV/OTT service appealing to target customers, it must stand out from other video streaming services. When you are able to define how are you unique and how you differentiate you are one step closer to defining your unique selling proposal. You need to know why viewers would pay for your service and why they would select you instead of your competitors.
How Will You Measure Your Success?
Typically, the first two factors are the price and the content, but they can be different in some special cases. In this process, define how you plan to measure the success of your service and the expected results. When you know what you need in order to attract new customers, you will be able to select OTT platform that will help you achieve your goals.
Do a Thorough Research
Depending on your starting level of knowledge and expertise, chances are, you will most probably need to do some additional research. Doing the research will help you define your budget or timeline. Also, it will give you an answer whether your planned budget will be sufficient or perhaps you will need to adjust your business model or need additional financing. Whatever the outcome is, the best possible time to learn this info is right here and now, before you even begin with the project.
When creating your plan, write your initial idea of the vision and then revisit this section. After you finish answering all other questions in the plan you will have a clear idea of what your vision is. Then you will be able to clearly define your goals and purpose.
It's important to have targets to aim towards if you are going to create a plan for an OTT business. Goals, particularly ones that stretch you, are tremendous motivators as well as provide crucial data to help you make informed decisions and corrections. If you don't have a goal for, let’s say, revenue or the number of new subscribers, it's impossible to measure your progress.
Break your goals into business, strategic and tactical goals. Plan on updating and changing these often and one word of caution – as you create a goal that motivates you, be just as clear about how you plan to track and measure your goals.
Business goals should include total annual revenue, number of new subscribers per month/year, number of repeat subscribers, number of referred subscribers, average $ amount per subscriber, number of transactions per subscriber, and number of testimonials or positive reviews.
Select Strategic Goals
Strategic goals can include capturing a certain OTT market share, being seen as the industry leader in your city, region, or country, or even further, opening offices in X cities, being acquired, obtaining a level of customer satisfaction, or user engagement. User engagement is very important for OTT service and in positive correlation with user experience. The higher the engagement the more you can reduce churn. To measure user engagement you can analyze the number of playouts per user per day, number of purchases, number of minutes used per subscriber per day, etc.
Describe the greater purpose that the execution of this plan and the growth of this business will fulfill. Try to fill this statement with as much passion as possible. This is your organization's rallying cry; it's meant to be the reason you absolutely believe the world needs this business. You may never actually share this idea with your customers, but they will feel it.
Market Research for an OTT Business Plan
Before launching an OTT platform, it's crucial to conduct thorough market research to ensure that there is a demand for your product. In this section, we'll cover the key elements of market research for an OTT platform.
OTT Industry Overview
Provide an overview of the OTT industry, including its size, growth potential, and major players. Use relevant industry statistics and data to support your points.
The OTT industry is one of the fastest-growing and most lucrative sectors in the entertainment, media, and technology industries. Over the last few years, OTT streaming has become more and more popular. According to Deloitte’s 2020 Media and Entertainment Outlook, the global OTT market is expected to grow at an annual rate of 17.3%, reaching a size of US$138 billion in 2023.
Major Growth Factors for Video Streaming Market
The global video streaming market was valued at USD 68.80 billion in 2019 and is projected to reach USD 193.62 billion by 2027. The growing demand for video streaming services due to increased technological advancements, the increased availability of high-speed internet, and the growing preference for cord-cutting are the major growth factors for this market.
Target Market Analysis
Identify your target audience and their preferences. Conduct surveys or use data sources that gather information from analytics tools on viewers’ content consumption habits, devices they use to access content, and the types of content they prefer.
A user persona is a fictional representation of your ideal customer, based on market research and data about your existing customers. Creating personas helps you better understand your audience's needs, preferences, and motivations, which can help you tailor your content and marketing strategies. Consider the following factors when creating your user persona:
- Demographic information: age, gender, income, education, and location
- Psychographic information: interests, hobbies, values, and lifestyle
- Content preferences: genres, formats, and viewing habits
- Preferred devices: smartphones, tablets, computers, or smart TVs
- Subscription preferences: pricing, payment options, and contract terms
Identify the key competitors in your OTT market, and analyze their strengths, weaknesses, opportunities, and threats (SWOT analysis). This will help you understand the competitive landscape and identify areas where you can differentiate your OTT platform.
- Strengths: What are your competitors doing well? What advantages do they have in terms of content, features, or pricing?
- Weaknesses: Where do your competitors fall short? Are there areas where your platform can offer a better experience or more value?
- Opportunities: Are there gaps in the market that your OTT platform can fill? Are there underserved audiences or content niches that you can target?
- Threats: What obstacles could hinder your platform's success? Are there new competitors, changing customer preferences, or technological advancements that could pose achallenge?
Creating a Marketing Strategy for Your OTT Business
Once you have conducted thorough market research, it's time to develop a marketing strategy that will help you attract and retain subscribers for your OTT platform.
Define Your Unique Selling Proposition (USP)
A strong USP sets your platform apart from the competition and conveys the unique value your OTT service offers to potential subscribers. Consider your target audience's preferences, the content you provide, and any features or pricing advantages that differentiate your platform.
Develop a Content Strategy
Curate a diverse and engaging content library that appeals to your target audience. Consider acquiring exclusive content, creating original programming, or partnering with content creators to further differentiate your OTT platform.
Implement Marketing Tactics
Develop and implement marketing tactics to promote your OTT platform to your target audience. These tactics may include:
- Content marketing: Create informative and engaging blog posts, videos, and social media content that appeals to your target audience and showcases the unique aspects of your OTT platform.
- Social media advertising: Utilize targeted social media ads to raise awareness of your platform and reach potential subscribers.
- Influencer marketing: Partner with influencers who can recommend your OTT service to their followers and increase brand visibility.
- Affiliate marketing: Engage with affiliate partners to promote your OTT platform and offer them a commission for each new subscriber they refer.
- Public relations: Generate buzz around your OTT service through press releases and media coverage, as well as participating in industry events and conferences.
OTT Business Strategy
Once you have a thorough understanding of the market, it's time to develop your OTT business strategy. This section will cover the key elements of your business plan.
Define your OTT platform's key features, including the types of content you will offer, the user experience, and any unique features that will set you apart from competitors.
Some of The Key Aspects of Your OTT Service are:
- Diverse Content Library: Offer a wide variety of content such as movies, TV shows, documentaries, and exclusive original series from various genres like action, comedy, drama, and more.
- User Experience: Make sure that the platform will provide a seamless and intuitive user experience with an easy-to-navigate interface, personalized recommendations, and advanced search filters.
- Multi-Device Compatibility: The platform is to be accessible on multiple devices, including smartphones, tablets, smart TVs, and gaming consoles.
- High-Quality Streaming: Ensure high-quality streaming with adaptive bitrate technology that adjusts the video quality based on the viewer's internet connection.
- Offline Viewing: Users can download their favorite content for offline viewing, ensuring they can enjoy our platform even without an internet connection.
- Localization: Consider offering your platform in multiple languages to reach a broader audience, including subtitles and dubbing for non-native speakers.
- Social Integration: Enable social media integration, allowing users to share content on their social media profiles and interact with friends and followers on the platform.
- Analytics and Data Tracking: Incorporate analytics and data tracking tools to monitor user behavior and preferences, measure engagement and retention, and optimize the platform's performance and content offerings.
- Content Curation: Develop a content curation strategy to provide personalized recommendations based on the user's viewing history, preferences, and behavior, increasing user engagement and retention.
- Customer Support: Ensure that your platform has robust customer support, including 24/7 availability, multiple channels for support, and a responsive and knowledgeable team.
- Security and Privacy: Implement security and privacy measures to protect user data, including encryption, secure payment processing, and compliance with data protection regulations.…
Revenue Model and Pricing
Determine the most suitable revenue model for your OTT platform, considering factors such as your target audience, content offerings, and market competition. Common revenue models include:
- Subscription-based (SVOD): Users pay a monthly fee for unlimited access to content.
- Transactional (TVOD): Users pay per view or purchase individual content items.
- Ad-supported (AVOD or FAST): Users access content for free, but advertisements are shown throughout the viewing experience.
Carefully consider your pricing strategy, factoring in competitor pricing, the value proposition of your platform, and the willingness of your target audience to pay for your service.
Outline your distribution strategy, including how you will reach your target audience and what channels you will use to distribute your content.
Decide on the most effective distribution channels for your OTT platform, such as:
- Direct-to-consumer: Offer your service through a dedicated website or app.
- Partnerships: Collaborate with existing platforms, content providers, or other businesses to expand your reach and audience.
- Bundling: Combine your OTT platform with other services or products to create attractive packages for consumers.
In addition to the above-mentioned distribution channels, consider the following ways to reach your target audience:
- Social Media: Use social media platforms like Facebook, Twitter, Instagram, and LinkedIn to promote your platform, engage with your audience, and increase brand awareness.
- Influencer Marketing: Partner with social media influencers, bloggers, or celebrities to promote your platform to their followers and reach a wider audience.
- Paid Advertising: Invest in targeted digital advertising, such as pay-per-click (PPC) advertising, social media ads, or display advertising, to reach your target audience and increase brand awareness.
- Content Marketing: Use content marketing strategies such as blogging, video marketing, or podcasts to attract and engage your target audience with relevant and valuable content.
To acquire users for your OTT platform, consider the following strategies:
- Referral Programs: Implement a referral program that rewards existing users for referring new users to your platform, increasing user acquisition and retention.
- Free Trials: Offer free trials to new users to experience the platform's features and content, increasing the likelihood of converting them into paying customers.
- Email Marketing: Build an email list of subscribers and send targeted email campaigns, promoting your platform's content and features to keep your audience engaged and informed.
- SEO and ASO: Optimize your platform's website and app store listing with relevant keywords and metadata to improve your search engine and app store visibility, attracting organic traffic and new users.
- Community Engagement: Build a community around your platform by hosting events, starting discussion forums, or creating social media groups, to encourage engagement and user-generated content.
- Partnership Programs: Collaborate with influencers, content creators, or other businesses to create cross-promotion opportunities, reaching new audiences and increasing user acquisition.
- Targeted Campaigns: Create targeted campaigns that appeal to specific user segments or demographics, addressing their unique interests and needs.
- Customer Support: Offer excellent customer support through multiple channels such as email, phone, or chat, to ensure customer satisfaction and loyalty.
By considering a combination of these user acquisition strategies, you can attract and retain a loyal user base for your OTT platform. It is important to monitor the success of each strategy and adjust as necessary to ensure continued growth and success.
Technology and Infrastructure
Invest in the necessary technology and infrastructure to support your OTT platform's growth and ensure a seamless user experience. This section will cover the key technical requirements for your platform.
Content Delivery Networks (CDNs)
Ensure fast and reliable streaming for users worldwide.
CDN is crucial for delivering high-quality video content to your users. A CDN can help to reduce buffering and improve the overall viewing experience by delivering the content from the server closest to the user's location.
OTT Platform’s Scalability - Optimize for Growth
Another important aspect to consider is the platform's scalability. Ensure that your platform is designed to handle a large user base and can accommodate growth without sacrificing performance or user experience.
Mobile optimization is also essential, as the majority of users access OTT platforms through mobile devices. Make sure your platform is optimized for mobile devices, including different screen sizes and operating systems.
Finally, consider integrating with third-party tools and services such as payment processors, data analytics, and customer support software to streamline your platform's operations and improve the user experience.
By investing in the necessary technology and infrastructure, you can ensure a smooth and enjoyable user experience for your audience, increasing the chances of customer satisfaction and retention.
Content and Subscriber Management System (CSMS)
Easily manage, organize, and deliver content to your audience as well as manage subscribers.
CSMS that you will use to manage your content, including any integrations or customizations that you may need to fulfill your unique business requirements. A robust content and subscriber management system can help streamline and automate many of the manual tasks associated with managing and delivering content to your audience.
Video Encoding and Delivery
Identify the video encoding and delivery technology that you will use to ensure that your content is delivered quickly and efficiently.
Adaptive Bitrate Streaming
With adaptive bitrate streaming, users' devices will automatically adjust the quality of the video based on their internet connection, ensuring a smooth and uninterrupted playback experience. Popular adaptive bitrate streaming technologies include HLS and MPEG-DASH.
Refers to the necessary activities needed to prevent unauthorized access, copying, and distribution of content through OTT platforms.
Content protection for OTT involves a variety of techniques and technologies, such as:
- Digital Rights Management (DRM): This is a technology used to encrypt and protect content from unauthorized access and copying. It ensures that the content can only be accessed and viewed by authorized users with the appropriate rights.
- Watermarking: This technique involves embedding a unique identifier within the content to identify its origin and track its distribution. This helps to deter piracy and unauthorized use of the content.
- Geo-blocking: This involves restricting access to content based on the user's geographical location.
- Authentication and Authorization: This involves verifying the identity of the user and their right to access the content. This can be done through various means such as username and password, biometric authentication, and two-factor authentication.
Platform Security and User Data Protection
Outline your platform security strategy, including any measures you will take to protect user data and prevent unauthorized access. Here is an outline for your platform security strategy:
- Protect user data
- Prevent unauthorized access
- Ensure confidentiality, integrity, and availability of data
- Comply with relevant regulations and standards
- Implement strong and up-to-date authentication and access control mechanisms
- Use encryption to protect data at rest and in transit
- Regularly monitor and audit system activity to detect and respond to potential breaches
- Implement backup and disaster recovery procedures
- Conduct regular security assessments and penetration testing
- Train employees on security best practices and maintain an incident response plan in case of a breach
- Comply with relevant regulations and standards such as GDPR, HIPAA, and PCI DSS.
- Provide secure payment options for your subscribers.
By following these measures, you can ensure that your platform and user data are secure, building trust with your audience and protecting your business from risks.
OTT service monitoring refers to the process of monitoring the performance and availability of OTT services. Monitoring the performance of OTT services is essential to ensure that they are working correctly and delivering a good user experience.
The following are some of the key aspects of OTT service monitoring:
- Quality of Service (QoS) Monitoring: This involves monitoring the network performance, including latency, bandwidth, and packet loss, to ensure that the OTT service is delivering a good quality of service.
- Quality of Experience (QoE) Monitoring: This involves monitoring the end-user experience to ensure that the OTT service is delivering a good quality of experience. This includes monitoring metrics such as video buffering, startup time, and video quality.
- Content Delivery Network (CDN) Monitoring: This involves monitoring the performance of the CDN, which is responsible for delivering the content to the end-users. CDN monitoring includes monitoring the availability, latency, and throughput of the CDN.
- Application Performance Monitoring (APM): This involves monitoring the performance of the OTT application, including the server-side and client-side components. This includes monitoring metrics such as CPU usage, memory usage, and application response time.
- Security Monitoring: This involves monitoring the OTT service for any security vulnerabilities or threats. This includes monitoring for DDoS attacks, malware, and other security threats.
OTT service monitoring is essential to ensure that the OTT service is delivering a good user experience, and any issues are identified and resolved promptly. By monitoring the performance and availability of the OTT service, service providers can proactively detect and resolve any issues and ensure that their customers have a good user experience.
Analytics and data collection tools
OTT analytics and data collection tools refer to technologies and software platforms that allow businesses to gather and analyze data from their OTT services.
OTT analytics tools help operators to track user behavior and engagement, monitor content performance, and gather insights that can be used to improve their services.
With the right analytics and data collection tools, you can gain valuable insights into user behavior, preferences, and performance, which will help you optimize the performance of your OTT service and ensure that your customers are having the best possible experience.
OTT Service Launch and Beyond
Finally, it's time to launch your OTT platform and begin growing your user base. This section will cover the key considerations for launching your platform and scaling your business.
Outline your launch strategy, including the timeline, budget, and key milestones that you need to hit. Identify any launch partners or influencers that can help you reach your target audience.
Outline your content strategy, including how you will source and create new content, how you will curate existing content and any content partnerships you may have.
Identify how you will grow your business over time, including any plans for expansion into new markets or adding new features to your platform.
The financial projections section of your OTT business plan should include revenue and expense forecasts, as well as any funding needs you may have.
Your management team section should introduce the key members of your team and their relevant experience. This section should also highlight any advisors or mentors that are supporting your business.
Launching an OTT platform can involve complex legal considerations, including intellectual property, licensing, and privacy regulations. This section should outline any legal considerations relevant to your business.
Conclusion (The End Is Where It All Begins)
The conclusion of your OTT business plan should summarize the key points of your plan and reiterate why your business is poised for success in the OTT market.
By following these guidelines and incorporating the suggested keywords, you can create a comprehensive and effective OTT business plan that showcases the unique value of your platform and attracts investment and partnerships.
Launching an OTT platform can be a lucrative business opportunity, but it requires careful planning and execution. By conducting thorough market research, developing a solid business strategy, and building a robust technical infrastructure, you can launch a successful OTT platform that attracts and retains users. By following the tips and best practices outlined in this business plan, you can position your platform for success in the competitive OTT market.