Know business mathematics of movies on OTT
For what reason is it called OTT?
Actually, the term OTT is a short form of over-the-top. When you got the facility of watching TV on the internet, that is, when you got rid of the cable box. When you started watching all the TV programs on a smart phone in your hand, this platform was called OTT. Streaming of web series, comedy programs and movies is quite popular on OTT platforms in India as well.
How do films make money?
The mathematics of films income on OTT platforms is straight. OTT has to buy the rights of the movies for release or streaming. The producer gets a sum for the rights. This deal is different for different language versions of the same film, the rights of each version are different. On the other hand, some films are produced by OTT platforms. The OTT platform makes a deal for a particular film, which they (creative team of the platform) finds that this film script can be made for there platform. This particular film is catogorised as 'Orignals'. Like HBO is an OTT platform, which is specifically in the business of making movies for its platform. In this deal, the platform gives a fixed amount to the filmmakers and the producers to make the film, and after the completion of the film production the remaining amount left is their profit.
How does OTT benefit?
If the filmmakers are making a profit in this way, OTT platforms are giving them money, then how are these platforms profiting. Three types of methods are mainly prevalent in this business.
- When a user downloads any content, at that point he/she pays an expense for it. That implies exchange on each download.
-When a user pays a sum of money every month or for a time period and can see all the contents of that platform.
-There is no charge to watch content, but users have to watch advertisements in between content. Like YouTube is free but users will have to watch the advertisements in the middle of the video. OTT earns through these advertisements.
Generally speaking, the business model on OTT is very simple. First the platform goes through spending money to make or purchase its content and after that the content is sold by taking a charge from the audience or users. Making an OTT platform is a gigantic procedure and simultaneously it is a negative income framework in the business world. On the other hand, many platforms also provide payment systems such as per week, per month, daily and annually for the convenience of the users.
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