If you are familiar with Netflix, Amazon Prime, Apple TV, Hotstar, then you probably have a rough idea of what OTT is. An OTT is an acronym of Over the Top which means providing movies, web series, and TV content to subscribers via the internet. It has bypassed conventional methods of cable TV or satellite TV subscriptions which acted as a controller of such content. OTT offers endless media opportunities for users. Netflix, Amazon Prime Video, Hotstar, Zee5, Sony Liv, Voot, and all the other web streaming platforms have gained over-the-top popularity in the last couple of years.

Adolescents have laid off from typical melodramatic shows to something entertaining, novel and relatable. “Netflix and chill” is the most evident phrase and example of how much today’s younger folks love these platforms.

Well, at present over 181 million people are engaged with OTT platforms and that’s just in the United States. In the year 2019, OTT video subscriptions in India added 12 billion Indian rupees, and it may reach 74 billion in 2024. By 2022 the media and entertainment of the digital market will become the second-largest sector.

Why OTT media is getting popular?

OTT services are easy to set up and use. All that’s required is an internet connection and your favorite OTT app with an accompanying device. An OTT platform gives you the flexibility to watch your favorite TV show across a range of connected devices, something which conventional mode of cable TV can’t offer due to technological limitations. And the cost is relatively low compared to traditional cable TV packages. Through these media streaming platforms, businesses are banking on aggressive strategies to grow the demand for OTT platforms. People get the liberty to choose the content and the time they want to watch in OTT platforms. You can always watch later and catch-up with the latest episodes. The content is fresh and entertaining.

If you have been on Netflix, Hotstar, and Voot recently, then you’ll notice there is a lot of original content on OTT channels. It exclusively helps to retain customer loyalty. You can also share the same account which you logged in among multiple devices like mobile phones, smart TVs, Personal computers; normal TVs. Apart from the entertainment aspect of OTT, the service can also be used for educational purposes and instructional streaming techniques. This technology sets the world up for a more versatile, diverse, and competitive OTT industry.

Business Models

Currently, there are three business models AVOD, TVOD, and SVOD being used across the OTT platform.

  • · AVOD: Ad-based video-on-demand

AVOD revenues OTT services through advertisements, the most common strategy among OTT platforms. AVOD is free to consumers unlike any other revenue models of OTT platforms. However, much like televisions, consumers need to sit through advertisements. You can see AVOD in action while watching YouTube, where ad revenue is used to set off production costs.

Premier content owners rarely use AVOD as it generates a lower amount of revenue compared to TVOD and SVOD. YouTube has started to move its subscription-based model to the ad-based model, with reports that the service was slow to catch with users.

  • TVOD: Transactional video on demand

TVOD is the opposite of subscription video, where consumers purchase content on a pay-per-view basis. There are two subcategories in TVOD, known as Electronic Sell-through (EST), in which you pay once to gain permanent access to a piece of content. And the other category is Download to Rent (DTR), where you can access a piece of content for a limited time for a smaller fee. 

TVOD services offer more recent releases, providing holders with higher revenues and giving consumers timely access to new content. TVOD services retain consumers by offering attractive price incentives, so they continue to return in the future.

TVOD services include Apple iTunes, Amazon’s video store. 

  • SVOD: Subscription video on demand

SVOD allows users to consume as much as they desire at a flat rate per month, just like traditional cable TV. It includes Netflix, Amazon Prime and Hulu with new services coming from HBO, Disney. 

SVOD offers great flexibility to users, as they can opt-out whenever they want and users aren’t tied into long-term contracts. By providing exclusive new content, aggressive pricing schemes – and probably both SVOD; are continually challenged to retain consumers. 

Is internet TV replacing cable TV?

Younger age groups mainly due to conveniences and flexibility of viewing television and movie content across multiple devices of their choices adopt OTT platforms. Something which is not possible with cable and satellite channels. OTT service providers are connected with web-based subscriptions, which might be a great alternative to traditional cable TV. Though OTT has gained immense popularity but it does not mean that traditional cable TV will disappear entirely. Users are maintaining cable TV along with the Amazon prime and Netflix’s subscription. 

OTT services are relatively new and could undergo major changes for best practices and better user experience. Some cable companies have also started their OTT platforms like HBO Go as a part of their premium subscriptions. Cinemax, Epix, Showtime are examples of other entertainment channels which provide premium subscription. 


A majority of viewers have access to smartphones, tablets and smart TV’s and hence the challenge for OTT providers lies in providing content in the format, which can be delivered across all these platforms. OTT providers may need to look for technology partners who can enable them to provide similar quality of content across all the platforms. 

Another biggest challenge that lies ahead for OTT players is how to retain their customer base. Viewer retention is a key challenge and could involve treading a fine line between user experience and monetization. 

Nowadays, viewers do not prefer to surf through numerous channels to get what they want. They need more personalized experience and this is where another challenge for OTT service providers grows. The focus must be more on content discoveries so viewer’s retention can also be possible. 

Winding up 

 The OTT platforms are booming in the Indian market. It has been with us for many years and many more years to come. The availability of cheap data and a huge consumption base seems to be a driver, if the content is not good, people would rather watch TV. Furthermore, the increased diversification suggests that the online media market is healthy and booming. The OTT reflects the exciting phase of entertainment media.