OTT might be the most important abbreviation you’ve never heard of.
Right now it’s in 51% of American homes, it’s being used for at least 100 minutes per day, and, the entire industry is worth $46.5 billion.
Not only that, it looks like it’s gunning for YouTube’s number one spot on the video on demand podium. So, what is it?
OTT stands for Over-The-Top and is the industry term for services which enable you to stream video content, via the Internet, direct to your television. You don’t need a cable or satellite subscription – you just plug-in your device, download an app, and away you go.
You’re probably familiar with OTT apps
If you’ve ever lost a few hours (or days) watching one of your favorite series on Netflix, Amazon Prime, or Hulu, you’ve already experienced what over-the-top streaming has to offer.
But it’s not the subscription video giants like Netflix who pose the biggest threat to YouTube and their income. Instead, it’s the small business owners and content creators who are moving away from the platform to make their money elsewhere.
Take cinematographer and choreographer Tim Milgram for example – despite having over 1.67 million followers on YouTube and being what most of us would consider a “success” on the platform, YouTube is not where he goes to make his money. You won’t find yourself skipping any ads to watch his content.
Tim makes his money instead through his private Netflix-style website, TMILLY TV. This is a subscription video on-demand (SVOD) service where users pay a monthly fee to access premium content and tutorials.
The SVOD approach allows Tim to maintain more control over his finances and how he makes money, while also reducing the restrictions a platform like YouTube would place on his content. His videos, that would once have just been monetized by ads, are now tucked behind a profitable paywall.
That’s bad news for YouTube, who undoubtedly would like to be targeting more ads to the hundreds of thousands of people who visit his channel each month.
You can see this trend happening across lots of different fields as well – YouTubers, both large and small, have opted to pull their premium content off YouTube and take control of the monetization. Total Immersion, Tawzer Dog, DiveGUE and Films of Norway are just a handful of brands who are also opting to make the most of this subscription-based model.
Why is this happening?
The road to YouTube success is long and hard. Although you’re often regaled with stories of six-year old millionaires and rags to riches gamers earning $16.5 million a year, it’s a much different story for your average YouTuber.
Bloomberg recently shared a study which shows that 96.5% of YouTubers won’t make enough money through advertising to crack the US poverty line. While your business should extend beyond advertising, it doesn’t fill the up-and-coming video creator with much hope.
The video giant also began to put tighter restrictions on users content in 2016, based on advertiser requirements. This means that if your content could be thought of as unseemly by an advertiser, your videos or channel could be removed from their partner program. In fact, #demonetized has become a trending hashtag on Twitter.
New OTT platforms for video businesses
A lack of earning potential, and tighter restrictions on creativity and content, has been a key factor in driving video creators away from YouTube, and towards companies like Vimeo and Uscreen.
These platforms enable users to create entire businesses around their videos – people can pay to watch, view and download content. Income can also be generated before anyone watches your premium content and isn’t predicated on ad clicks or overall traffic.
- Vimeo is a premium alternative to YouTube, focusing on high-quality video creators who want more control over how they share their videos. Many online businesses, like Moz.com, use them for their video marketing purposes.
- Uscreen allows content creators to create entire subscription TV channels around their premium content. They help users create OTT channels – like Tim Milgram’s TMilly TV – which can be streamed to a television or other devices.
What both of these platforms allow content creators to do is to create a thriving career outside of a video hosting platform – their services are a tool in your overall business, instead of trying to control your business.
That’s why they offer add-on options like website creation, payment management, membership suites, app creation and social media tools, as part of their packages. The idea is to give video creators the tools they need to take control of their income and marketing.
Will video creators change the channel?
YouTube still has the biggest market share, but to maintain its market leadership, it will have to find a way to better serve creators with lower subscriber and view counts. This could come in the form of business support, higher ad revenues for creators, or creating paywalls and subscriptions for certain videos.
If YouTube doesn’t do this, it runs the risk of OTT services and subscription video platforms taking more and more creators from their platform, and becoming more of a marketing tool than a career path.
As more big companies, like Apple, begin to use OTT platforms themselves, and Netflix continues to spend $6 billion a year on creating original content, it won’t be long before video creators from all walks of life begin exploring these options for themselves.
What might have been 2017’s YouTuber could be 2027’s ‘Netflixer’, ‘Uscreener’ or ‘Vimeor’.