Whatever over the top business model you choose, it’s important to remember that the best choice is whichever option serves your content best.

How do you know if launching an OTT channel is right for you?

OTT streaming platforms are leveling the playing field for independent creators and small businesses to launch their own Netflix-style service. While anyone can launch an OTT channel on Vimeo, you’ll want to make sure at least one of these four factors apply to you.

1. You already have an established content library

When figuring out how to start an OTT business, a common myth creators hear is that they need thousands of titles to launch. That’s simply not true.

We’ve typically found that starting with at least 60 videos works well — it’s a sweet spot for many genres to offer enough content at launch for customers to feel like they have enough videos to make their financial investment in your channel worthwhile.

That said, this benchmark should only serve as a jumping off point. It’s absolutely critical that you have a robust calendar of new content coming down the pipe, too. (More on that in a minute.)

Remember, if you don’t have that much content off the bat, but you’re actively creating new content at a regular clip, you can start selling your existing content transactionally. That way, when you’re ready to launch a subscription channel, you can entice them with promotions as “thank you” for being early adopters.

For a transactional video on demand OTT business plan, aim to release new content at least once per week (if you have enough bandwidth and material to do it more frequently, all the better!).

2. You have an established audience on other channels

At Vimeo, we see many creators grow into an OTT business plan If you have an existing audience on YouTube or other social platforms, you can work on converting your fans into paying customers.

A great example of this: Black & Sexy had a popular web series on YouTube. They asked their audience there to buy the final episode from them as a way to support them creating more content in the future. The response was overwhelming and helped them validate that a paid subscription model could work for them.

For the team at Outfest, they have established a large following of queer artists and film connoisseurs since the early 1980s. With the Outfest Los Angeles LGBTQ festival being an Oscar/Academy awards qualifying film festival, producing the biannual LGBTQ+ film festival is imperative to underrepresented filmmakers to reach the mainstream audience.

Now, amidst the arrival of the COVID-19, Outfest established an OTT streaming service to continue their events throughout the pandemic while amplifying queer stories and voices to their global audience. Outfest knew pursuing OTT was the logical way forward to support their overall mission to empower queer artists and filmmakers.

3. You’ve cultivated unique content and a niche following

Remember what Stranger Things did for Netflix, The Mandalorian did for Disney+, or The Handmaid’s Tale did for Hulu?

Sometimes, just one piece of great, exclusive content can be a huge driver for subscriptions on entertainment OTT networks. Again, building up to our last point, you’ll want to make sure that you have a consistent cadence of new content to keep your viewers engaged.

4. You’re planning a long-term, consistent, content release calendar

We can’t stress it enough: A regular cadence of new content is essential. If your OTT business plan is going to succeed, you’re going to need a steady clip of new, err, clips! Remember, it doesn’t have to involve a slew of new releases every week: if you know you’re going to have one in-demand, high-quality event or title per month, that’s enough.

The Vimeo team has supported entertainment brands to launch an SVOD OTT business plan where new content was released every 30 days. And, because they positioned their model with SVOD, these brands were able to create long-term revenue through auto-renewals of subscriptions. Convenient for customers, steady income for your channel — it’s a win/win.

How to set a price for an OTT business plan

However you plan to get started, consider this: Vimeo is home to more than 1 million end-users and 3 million live streams annually. If you wanna get in on the action, you can try out Vimeo OTT for free right now – and start letting your content work for you.

Meet consumers’ expectations

According to a report from KPMG, consumers already have a price range in mind when evaluating new streaming services. While you may have big dreams of charging a certain price for your content per month, it’s important to remain clear on what consumers want. (Don’t worry, we have specific recommendations for you.)

Just remember that if you miss the mark, you risk either churning your customer, or never acquiring them in the first place. After all, the vast majority of consumers — 81% — say that pricing is the key factor for canceling their subscription.

Understand how genre affects pricing

Sorry to say, but not all streaming channels are created equal. Depending on the type of content you offer, consumers are willing to pay more (or less) for your streaming service.

At Vimeo, we’ve found that pricing your entertainment streaming network between $4.99 and $6.99 per month is, well, on the money for attracting and converting subscribers.

But!

You know what I’m going to say, right?

This only applies when you’re regularly releasing new content. If your cadence is a bit more infrequent, you’ll want to lower the price.

In the entertainment space, especially, there are ample options out there with thousands of series, films, and shorts, and many charge as little as $7.99 per month. You can always adjust your pricing with Vimeo’s OTT platform if you feel you need to change it as your business grows.

Give customers flexibility

Sometimes, loyal fans know they’ll watch your content, so they want to pay upfront. While not common with the big media players, smaller OTT platforms offer both monthly and yearly subscription options.

Setting an annual subscription price isn’t just a matter of taking your monthly price and multiplying it by 12. Instead, consider pricing annual subscriptions 20%-25% less than what it would cost a customer paying month to month. Offering a discount incentive is a compelling strategy to attract more annual payments.

Math is not my strong suit, but I can at least tell you that if you charge $4.99 for a monthly subscription, an annual subscription should be around $49 as a 20% discount incentive.

Emily Gover