The Rise of OTT Platforms
It is my belief that the current business models employed by OTT platforms are destructive to the entertainment industry. And here are the reasons.
- They scatter the entertainment media across various platforms with various subscription plans, UX and what not. This is an inconvenience to the users. Moreover, this scatter of media forces consumers to have multiple subscriptions in order to have access to all of them. This increases the cost which is a major contributor to piracy.
- In the quest to acquire consumers and content , OTT platforms compete and buy them at inflated prices creating a bubble. Consequently, the entertainment industry produces costlier movies expecting huge returns, paying actors exuberant remuneration and increasing the production cost. But there will be a day when OTT platforms will stop this quest for content and start their quest for profitability, thereby reducing their buying price and breaking the bubble. This will tank the media houses currently in expensive production.
- Most streaming services are part of an ecosystem, not self-sustaining instead subsidised by the other businesses in the ecosystem. This exposes the streaming service to the risks of other businesses. If a domino effect takes place, it will not only kill the streaming service, but inadvertently break the bubble as well since competition is lesser and it was competition that drove inflated prices in the first place. Such streaming models that are subsidised by other businesses in an ecosystem inadvertently exposes the entertainment industry itself to the risks of other businesses.
So what is the solution?
- Self-sustaining streaming model that does not run on price bubble.
- A streaming service owned and run by entertainment industry collectively where content competes rather than streaming platforms.