Welcome to class, content creators. You're just in time to delve into the hot topic of OTT apps.
Why do I say “just in time”? Because Netflix and other OTT (over-the-top) titans have changed the way audiences view content. With the number of paid OTT subscriptions in the U.S. forecast to grow over 50% in the next 5 years — from 199 million today to 307 million in 2025 — it’s safe to say that cords are cut for good.
Now’s time for content creators to develop their apps and join in. The new wave of OTT is defined by influencers, entrepreneurs, and small businesses expanding their audience and brands with OTT applications.
Hold on, buddy! Before you jump, there are a few things you need to learn about OTT and how to create your own streaming app.
What is an OTT app?
To begin, you need to understand the difference between an OTT app platform and an OTT application. The OTT platform is where the OTT app lives. There are two types of OTT app platforms:
Connected TV platforms, like:
- AndroidTV
- FireTV
- Microsoft XBOX
- Roku
- Samsung Tizen
- tvOS (Apple)
And mobile platforms:
- iOS (Apple Store)
- Android (Google Play)
The OTT app is the vehicle that delivers live or on-demand video content to your audience so it streams on their connected TV, laptop, smartphone, or tablet. The app needs to be nicely branded, have easy-to-find content, and offer an awesome viewing experience.
What do OTT apps do?
What are the benefits of OTT apps?
Herein we address the important question “so what’s in it for me?” As it turns out, quite a lot!
Bringing audiences to your native OTT app helps convert viewers into paying subscribers (cha-ching). It’s what’s known as “content monetization.” That content you spend so much time and money creating can become a big source of revenue; either as a business in itself or supplementing other revenue sources
Did you know?
Give your audience what they want
First and foremost, OTT puts your content exactly where your viewers are flocking. According to Deloitte, 80% of US consumers subscribe to a paid streaming video service. And in the UK, online streaming services have a 65% penetration, showing 7% growth in 2020. Bringing your top viewers to your OTT app won’t be a problem when that’s clearly how they prefer to view content.
Speaking of where customers choose to be, your OTT app will give your audiences a high-end viewing experience no matter how they want to watch — smart TV, mobile phone, or tablet.
Looking across Vimeo’s data, we find that while viewing preferences change by genre, viewers are no longer tying themselves to their desks or living rooms. It’s time to untether your content as well.
Grow and scale your business
Business benefits had better include growth and revenue, right? OTT apps do not disappoint. A successful app will deliver across four key business variables:
1. Growth. The gross increase in the percent of subscribers from the beginning of the period you’re measuring until now.
→ Say you have a fitness app and you want to measure subscriber growth for January. You start with 100 subscribers and add 50 subscribers by the end of the month. The growth rate for January is 50%.
2. Churn. The number of customers who unsubscribe within a time period, as compared to the number at the beginning of the time period.
→ Let’s say you start November with 100 fitness subscribers, but this time you actually lose audience and 5 people unsubscribe (I blame mashed potatoes and pie). Your November churn rate is 5%.
3. Lifetime value (LTV). A prediction of the net profit attributed to the entire future relationship with a customer. For subscription video, the LTV is generally the Average Value of a Subscription x Number of Months Subscribed.
→ So if Workout Wanda subscribes to your app for 3 years (36 months) at $10/month, her LTV is $360. (This can vary with the use of promos, free trials, and yearly subscriptions.)
4. Average revenue per user (ARPU). The total revenue divided by the number of subscribers.
→ Congratulations, you’ve reached $1M in revenue this year! If you have 5,000 subscribers, your ARPU this year is $200.
What type of content offers the best business returns?
Spoiler alert: the future is niche.
The good news for content creators is you don’t need a huge audience or outlay of cash to take advantage of the benefits of OTT. According to Professor Michael Smith of Carnegie Mellon, to enter the streaming video market you need either something huge or something small.
OTT’s first wave of entertainment media companies saturated the “huge” content market pretty well. OTT is now ripe for niche content that’s focused on a very specific audience with very specific interests.
Looking across genres of 1M+ OTT subscribers on 1K+ channels, Vimeo unearthed some interesting trends:
Big media’s broad entertainment is charging less per subscriber due to the competition, and there is significant subscriber churn as well. You’ll notice the lower churn rates of the other categories, regardless of the ARPU, leads to higher LTV.
Even when the subscription cost for a niche channel is low, once the user chooses to subscribe, they stay subscribed. That gives the niche content creators a stable, recurring revenue stream.
How do I know when I’m ready to launch an OTT app?
You say the benefits of an OTT app are pretty clear, but the water is still a little too murky to jump in. You’re smart to pause and take stock of what you have before you leap.
Before you push “go” on launching an app, you need to consider your content, current audience, marketing (aka creating future viewers), and monetization strategy.
Content that serves a niche audience
As we just highlighted, the more exact your audience target and the content that you create for them, the better your chances of success. Like any business venture:
- Know your audience
- Know what delights them
- Make sure you’re providing something they can’t easily find elsewhere.
From ceramics to global endurance sports, our most successful small creators have deep content vaults focused on a narrow target audience.
OTT content strategy
Audiences remain engaged and loyal when you serve them a consistent stream of content. If viewers know you release a new show every Tuesday, they’ll get into the habit of watching it. Decide the amount of content you can commit to creating, and stick to a release schedule.
Taking things one step further with a content release calendar — and shouting it from the rooftops — makes strategic business sense. Why? It's a great marketing tool for all user journeys, whether you're attracting new users, retaining existing users, or winning back those who churned.
Did you know?
Existing customer base
Your existing viewer base doesn’t need to be massive, but you do need to have engaged viewers willing to follow you to OTT and pay for premium content they love.
Unlike OTT’s first wave of highly-funded big media, the barrier to entry has lowered, and creators just need good content and enough loyal viewers to earn targeted revenue. Get your calculator and figure out how many paying viewers you need to meet your revenue and audience goals.
Millionaire Hoy started on YouTube and grew from a local Chicago following for his fitness videos to 288,000 subscribers. Realizing that he had built a strong and committed community of viewers who would pay for his content, he moved to OTT and monetized his videos using a subscription (SVOD) model.
His OTT app not only allowed him to make money doing what he loved, but he also increased his subscriber base 55%.
Customer acquisition strategy
OTT is not an “if you build it, they will come” proposition. You’re bringing an existing audience, but you’ll need to expand your base to grow. Understand the marketing levers you need to pull to access and convert new subscribers.
It’s a good idea to add the cost of acquisition (i.e. what you need to invest to gain one new subscriber to your OTT app) to your list of business growth variables.
What’s a good way to get OTT app subscribers?
Subscription / pricing strategy
Obviously when monetizing your content, what you charge matters. A full 60% of people who canceled their streaming service in 2019 canceled due to price.
Look at the competition across streaming video channels. The less competition you have, the more you can charge. Our data shows that instructional, faith, and fitness clients were willing to pay more and also remain subscribers longer than viewers of other genres.
Of course, your subscription strategy should start before someone even pays for your content. What you do during a free trial period is just as essential to hook them in. Whether you're enticing new users, or engaging existing ones, the more you can get them engaged on your platform or other channels (like social media), the easier it will be to justify your price point.
Does it sound like you have what you need to move your brand to OTT? Then it’s time to look at OTT app development.
Ready to launch an OTT app?
What goes into an OTT app?
A successful OTT app has many moving parts. Some elements are obvious to any viewer, and others keep things working smoothly behind the scenes. Let’s look at some of the must-haves.
A stellar online video player
At the end of the day, the content we’re talking about here is video. Audiences have come to expect a Netflix-level video viewing experience. Whether live or on-demand, the video needs to look and sound awesome across every platform and device. So make sure your video player is both well-built and adaptive.
One of the most important things for a smooth playing experience, especially on mobile devices, is access to multiple Content Delivery Networks (CDNs). Because the video signal can bounce between many providers, your OTT network needs to be able to switch dynamically between CDNs to ensure quality video.
Our job is to make sure our content is great quality, and then connect it to a platform that’s capable of streaming it seamlessly.
A comprehensive content management system
Since nobody sees it, is content management really that important? In a word, YES!
The content management system (CMS) ensures your content is easily searchable and findable. It cleanly manages the growth of your video library and the metadata for all your titles.
Not only does the CMS keep things orderly for the creator and audience, it keeps order across the board, automatically connecting to every other element of the streaming stack — the content delivery network (CDN), video player, and analytics system.
The more content you have, the messier things can become. Anyone who has ever had a mad shopping day at Costco, shoved the 20 boxes-o-stuff willy-nilly into cabinets, then tried to find 3 specific ingredients the next day knows what we’re talking about here.
It’s bad enough that you’re wasting time searching for where you put things. If you make your audience look for an unnamed episode 12 that’s hiding somewhere behind episode 25, you’ll quickly lose subscribers.
A beautiful, branded website
You need to ensure your customer experience is the same across every touchpoint with your brand. So much of the viewing experience is based on the look and feel of the app. When the goal is to extend your reach and grow your brand, your OTT app needs to offer a beautifully branded UI.
This includes logos and icons, accent colors, and copy that ensures your app experience matches the branding on all your customer-facing content.
Top-notch support
Maintaining OTT apps and growing your SVOD channel takes a village. Ensuring you have support from any partners or third parties is critical to long-term growth and success.
Whether it's lending support to your customers or being there when you have a question, a dedicated, equipped, and knowledgable support network is crucial.
Secure payment processing
One of the most attractive reasons to create an OTT app is the opportunity to monetize your content. It’s imperative that the app accepts payments simply, securely, and globally.
It’s also important that your app has options for in-app purchases using saved accounts. Consumers have come to expect their apps to alert them when payment options are out of date. If you’re planning on having global subscribers, be sure your app seamlessly processes multiple currencies.
The moment people see something that they’re not used to in the registration process — like a dollar symbol when they’re used to a euro or a pound symbol — it creates a certain level of friction. Through multi-currency support, we’ve been able to remove that friction. Peter Tomlinson, CEO, endurance sports TV
In-depth analytics
Without clear OTT app data, you can’t make good decisions about your business. You should have access to two types of analytics:
Subscription business stats
- Customer count / subscriber count
- Gross customer lifetime value (LTV)
- Gross revenue per user (GRPU)
- Paid churn
- Trial information (new trials/ conversions/ average)
- Net pay
Video metrics
- Overview of top content by title, categories, or type
- Usage trends by views, hours viewed, or audience size
- Hours viewed by device
- Hours viewed by platform
An OTT application can be customized based on your particular needs, but those are the essentials. Now that you know what’s under the hood, let’s see what needs to be done to build the app and keep it running smoothly.
How do I create a streaming app?
Video streaming app development is a necessary evil for most content creators. You put on your creative hat (that comfy one that always gets a ton of compliments) to produce the content, and now you’re supposed to fit a tech hat on your same head. That is a whole lot of hat, and if you wear it wrong, the whole outfit is a disaster.
We checked in with our Vimeo app development teams (the ones that build, submit, and maintain apps day in and day out) to get a quick overview of the OTT app development process.
First thing to note is there’s a huge difference between building a website and building an app. With websites, you can make small changes up to the moment you launch and even fix mistakes after you launch.
With an app, however, you have to think through the things each OTT app platform will require in their review process. If you decide you want to change anything post-review, even something as small as a store description, the app will need to go back through a platform review and your launch date will get pushed out.
What’s the turnaround time for platforms to review OTT apps?
There are four basic OTT app development steps:
1. Setup.
This is where you configure what your app will look like (branding, logos, colors) and how you’ll monetize it.
2. Technical build.
This is the big developer step where all components decided during setup are compiled into a downloadable OTT application.
3. Test.
During this step, you will need to QA (Quality Assurance — tech talk for “make sure it works”) the app. At this point you’re reviewing the app for functionality and CX (Customer Experience — marketing talk for “make the app so cool that viewers will love it”).
Testing includes coding and more basic things like organizing the content in a way that looks great on every platform.
4. Submission.
This crucial step can make or break your launch date. This is when the platforms check your app and let you know if they’ll accept it. Depending on the platform, the review can take from a few days to a few weeks.
If the app is kicked back to you by any of the platforms, the process extends to at least 7 hopefully-lucky-this-go-around steps.
5. Revise.
Repeat step 2 to implement the requested changes.
6. Retest.
Repeat step 3 to QA the new build and recheck your CX.
7. Resubmit.
Click your heels three times, wear your lucky sweater, and send the app back to the platforms.
What does it take to create a five-star OTT streaming app?
How much does an OTT app cost?
There are a whole lot of ways to create a streaming app, and consequently, there are a whole lot of cost parameters. In addition to the initial build and revisions we covered above, there is also the upkeep as you change your business / marketing / sales strategy, as audience expectations change, and as OTT app platforms evolve.
So yeah… it depends.
There are three main ways to handle video streaming app development:
1. Design your app in-house
If you choose to create your own streaming app, you’ll have the luxury of developers who work only on your projects, know your needs, and are available 24/7 for emergencies. That sounds lovely, yes? A quick warning: While you might be a single content creator with developer skills thinking about building an app, most of us mere mortals can do one job well or two jobs poorly.
Thus the go-it-alone option is best left to a small company looking to hire a team of in-house developers. This is the model that large media companies like Hulu use, and it has helped those companies create the viewing experiences consumers have come to expect.
However, many of our customers have noted that in-house development took too much time and energy from their main business. IndieFlix is an entertainment company that promotes and supports social impact films. They tried the in-house model, but found it took away from their main goal of providing content with a purpose.
2. Hire consultants or an OTT app development agency
For companies that want to develop their own apps, but not hire in-house developers, hiring contractors or a specialized agency is an option. Highly-skilled and highly-experienced agencies specializing in apps are much easier to find today than in the recent past.
Be aware, however, that they don’t come cheap.
Developing a simple app on a single platform starts around $25,000. This isn’t surprising when you realize that separate apps have to be built for each platform and each app needs to be designed, tested, and more.
Is OTT app development expensive?
3. Partner with an OTT service
Every organization, no matter how big or small, has to train an unblinking eye on its costs and resources. Having a partner handle the technical portion of app creation and the maintenance frees up content creators to… well, create content. An OTT service, like Vimeo, ensures the teams working on your app are experienced. (We submit 80-100 apps every month and are maintaining over 1,000 published apps). Choosing the right OTT platform partner ensures you won’t be hit with any unpleasant surprises, causing you to miss your launch dates.
What should you look for in an OTT service? Without digging into the weeds, we hear over and over again that our customers appreciate:
- Dedicated support. Vimeo OTT enterprise clients have access to a dedicated account manager, technical project manager (TPM), and solutions engineers.
- Comprehensive onboarding. Our onboarding process includes support with critical processes like things like setting up developer accounts on app platforms, navigating the nuances of app submissions, and providing proof of licensed content.
- In-house experts. All work is done by our team, in house. This means no outsourcing parts of the build to third parties, which can result in miscommunications, shoddy work, or other delays.
When choosing a platform partner, do not be short-sighted! If all goes well, you’re going to be around for many many years of sustained growth. You need a platform with that offers you:
- Scalability. That’s tech talk for it can handle a whole lot more content and monetization requirements than what you’re starting with. Get a platform that can grow alongside and ahead of your needs.
- Stability. You don’t want to be blind-sided by your scrappy, early-stage OTT platform suddenly going out of business and leaving you without a channel. Choose a well-established, financially-sound company.
Where do I launch first?
If you’re already streaming content, you should be able to find this information pretty easily. Remember where we mentioned the importance of good analytics? Those device stats are darned useful here!
If you don’t have information on your actual audience, refer back to that handy dandy device chart from earlier and see what’s happening with your content genre.
If you’re doing instructional or news content, you could easily extend your reach by launching mobile apps for your on-the-go viewers. That would mean launching first on iOS and Android. Save your connected TV platforms for later once you’re feeling confident and ready to go to the next level.
Where are your targeted viewers located?
Some content creators are focused on a particular geography. One great example is True Royalty TV, a channel of programs focused on royalty. They’re in 6 countries and growing to 20. In order to maximize their U.S. reach, they focused on Roku.
We needed a Roku app immediately — with 30 million accounts in the US, Roku was truly a major hole in our reach. Gregor Angus, Co-Founder & CEO, True Royalty TV
Would a cadenced platform release be a good marketing strategy?
Some of our customers have decided to do a “rolling thunder” approach to launching their apps. They launch first on mobile and then a month or two later, announce “look at the new platform we’re on” as a marketing push.
Do I feel lucky?
Couldn’t resist! If you can't pin down a clear best platform, there’s nothing wrong with launching a full suite of 8 apps at once. We have customers who do this all the time, and we make sure their apps are locked, loaded, reviewed, and ready by launch date.
What’s my next step?
Great news! You’ve already done the hard work of figuring out your strategy, understanding OTT apps and OTT app development, and you’ve chosen your platforms.
As we play Pomp and Circumstance, grab your OTT Apps 101 diploma because it is time to launch!
You can also leverage other cutting edge tools from Vimeo like our AI script generator, video teleprompter, AI caption generator, and AI video translator.
