Know the cost of owning an OTT
Have you ever wondered what is the cost of video content platforms such as Youtube or LaLigasportsTV? What business model do these platforms follow to have a positive balance ? What monetization model do they follow to offer a free service?
Nowadays marketing strategies are shifting towards content marketing. As a result, more and more companies and entrepreneurs are interested in creating their own OTT video-on-demand platform because of all the advantages it offers.
However, despite all the benefits of working independently of third-party platforms, many do not understand the costs associated with working in this type of model. That’s because it depends a lot on the platform’s features, users and usage flow, and it is very difficult to anticipate the results.
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Popular platforms such as YouTube or Twitch bear these costs, indirectly passing them on to consumers and content creators in an opaque way.
Having your own OTT can help you maximize your revenues by removing intermediaries in the value chain. But to do so, you must first understand the costs associated with them. Let’s try to explain what OTT platforms entail, and later we will show you how to maximize your revenue to make a profit. Generally there are 2 types of costs: fixed costs and variable costs.
In conclusion, all video on demand platforms contemplate these associated costs. Some of them directly pass the cost on to your profits. And in other cases, as with OTTs, all costs are broken down.
OTTs give you full control over the platform. This control brings with it more responsibility but also greater profit potential. That is why it is key to understand each cost linked to these platforms. It is important to emphasize that there are currently few OTT platform models that work like a SaaS. Virtually the entire market has been broken down by generating custom platforms, which involves a huge cost that must be borne entirely by the customer. From Tyris TV, we offer this service for high performance platforms but we have created an OTT as a Service (www.galgo.tv), for those content creators who can not afford, or who want to start with a customized platform.
On the other hand, in the case of platforms like Youtube or LaLiga Sport TV, they assume those costs in exchange for having full control over the monetization of the content, the information received. Remember, if you are not paying for a product, it is because you are the product.
Free platforms that assume these costs do so at the expense of being the ones that have full control over content, subscriptions, ads, promotions or sponsorships, acting as intermediaries and taking the biggest slice of the revenue pie.
In future articles we will tell you how to monetize your OTT Galgo platform to obtain immediate income without the intrusion of intermediaries.