How Do Movies Released On OTT Platforms Make Money

OTT platforms exhibit documentaries, movies, and shows for internet users. The number of OTT platforms and their users has risen phenomenally in recent years. The Covid-19 widespread has further contributed to the increase in OTT viewers as several new movies are being released directly to these platforms.


While we can quickly know the box office collection of movies released in theaters, the success of OTT platform movies is tough to evaluate. If you are a movie buff, you must have at some point thought of how movies released on OTT make money. Keeping this in mind, we’ll be discussing in-depth about the complete process of movies released on OTT platforms generating revenue and how Netflix works.

How Can Movies Earn Money Through OTT Platforms?

Many people are already familiar with how movies earn money when they are released in theaters. The producers make money when the audience buys tickets to watch the films. Through the number of tickets, it is easier to understand how much money a film has made when it is released in theaters. However, it is difficult to analyze the money for movies released on OTT because there is no box office system.

OTT platforms spend money to make movies and shows or buy their rights. Once they have purchased the film, it becomes available to stream on their platform. These platforms then charge money from the audience who wants to watch the movie.

Keeping this in mind, there are three primary methods through which OTT platforms make money and, thus, profits.

SVOD

Subscription video on demand, commonly referred to as SVOD, enables users to watch unlimited content for a monthly pricing scheme. Here, every user pays a certain amount for a time period that could be a month, few months, or a year. Users can then watch all the content on the platform. Popular examples of SVOD can be Netflix, Amazon Prime Video and more.

AVOD

Advertising-based video on demand, also known as AVOD, enables users to watch all the content for free. However, they have to watch advertisements in between. The most prominent example of this is YouTube. To watch the content ad-free, they need to buy a subscription. Numerous applications have started to implement this subscription model and benefit accordingly.

TVOD

Every user of TVOD OTT pays a fee for downloading any content. The money the customers pay is what the platform earns. Users aren’t able to consume unlimited content in this scenario, it’s more like renting a movie or show for a limited period before your access to the same expires.

The amount paid is different for different movies, languages, and different language versions of the same film. The price at which an OTT platform buys a movie is how much that movie has made. For movies that release directly on OTT platforms, 80 percent of their revenue comes from OTT rights. The remaining 20 percent is from satellite rights, that is, television premieres of these movies.

Why On OTT Platforms, Not Theatres?

With the global pandemic in place, not just Indian movies but films from all over the world are being released on OTT platforms. Thus, new movies and shows from all over the world are accessible to anyone from anywhere.

Moviemakers release the films on OTT platforms since the theatres have been shut for more than a year and a half. This is because the movie is already ready, and their money is blocked in these projects. Furthermore, the audience is also excited and eager to watch these films.

Sooner or later, even if the theatres open up, people will be skeptical about stepping out for a movie when they enjoy the same from the comfort of their homes. Keeping this in mind, let’s shed some light on a few pros of releasing movies on OTT platforms.

Pros Of Streaming Movies On OTT Platforms

The subscriptions to OTT platforms are way cheaper than movie tickets. With these subscriptions, you get more at the price of less. This means that you can watch unlimited content like movies, shows, documentaries, and much more, at the cost of one PVR ticket.

Moreover, these subscription charges are monthly, quarterly or annually, as per your convenience. Hence, you don't have to pay every time you wish to stream something on the platform.

OTT platforms have content from all over the world, and thus, the viewers can watch movies and shows of any language, any origin. Not just global releases, they also have various old iconic shows and films. This way, you can enjoy cult classics on these platforms without any hassle.

Another advantage of streaming movies on OTT platforms is the fact that users can enjoy these movies in their preferred regional languages. This way, you can stream several Hollywood and Bollywood movies in your regional languages without having to pay extra for the same. Users can also download their favourite movies and TV shows, another huge benefit for movies released on OTT platforms.

How Can Users Stream Movies On OTT Platforms?

The first step to getting to enjoy new movie releases on Netflix or similar OTT platforms is downloading the app on your device. There are a multitude of OTT platforms you could pick from, Amazon Prime Video and Netflix being amongst the most popular OTT platforms in India.

Once you have downloaded the application or logged on to the official website, you will have to buy a subscription. The subscriptions are available on a quarterly, monthly, or yearly basis. You can buy it as per your requirements. After proceeding with the payment and activating your account, users can start streaming new movie releases from the comfort of their home.

In case you wish to cancel your subscription at any point of time, you will have to visit the official website, sign into your account and cancel your streaming subscription accordingly. Besides paid OTT platforms, there are a multitude of free OTT platforms in India like Voot, Jio Cinema, and many more. Users don’t have to purchase any subscriptions to stream entertaining content.

Bottom Line

The global pandemic forced movie makers to look for alternatives to release their movies, OTT platforms being their preferred choice. Several movies have been released on various OTT platforms for the producers to make money from the projects.

OTT platforms buy the rights for a movie and generate revenue from people streaming this movie on the platform. These platforms then charge a subscription fee from the viewers in order to enable them to stream numerous OTT platform movies and shows. Numerous OTT platforms let’s users enjoy the latest movies in several regional languages as well.

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