How Much Does OTT App Development Cost?
Let’s face it, there is an 80% chance that you are an OTT video streamer. You watch movies, TV shows, live events, infotainment, news, podcasts - all or at least one of these - from an OTT app. OTT platforms are all the rage at the moment. Whether or not you are looking forward to getting your own OTT app now or in the future, let us have a substantial discussion about how much it costs to build an OTT app.
Should you have your own OTT App? - The Traditional TV vs OTT conflict
If you want yourself to be visible to a major chunk of viewers worldwide, you are probably going to need an OTT app. OTT, that is, Over-The-Top applications are apps or any services that give us media-based products through the internet. These are typically entertainment or communication services that bypass the modes of traditional media broadcasting, such as cable TV or D2H TV. OTT services have taken the present-day media service by storm.
The global market share of OTT apps stood at nearly 122 billion USD which isprojected to skyrocket to a whopping 1040 billion USD in the coming five years. Doing the math, that is a growth of almost 40%. This sounds incredible but in the hindsight, it is only natural considering that our lives are now heavily dependent, or might I say, evolving around the internet. OTT platforms reach us through the internet rather conveniently, making us ditch traditional broadcasting services almost entirely. Debates would always be sparking regarding whether killing traditional TV services is wise of us, but at the moment, nothing seems more attractive than OTTs to the common users globally.
This enormous popularity can be credited to the fact that consumers find OTT platforms to be far more flexible and accessible for viewing content. People have the freedom to watch whatever content they want, whenever they want, from wherever they want; OTT apps are accessible from any web-connected device, smartphones, computers, tablets, Smart TV, and so on. Alongside its flexibility, surveys say that millennials commonly perceive OTTs as the lesser expensive option over cable television, D2H or other sources of M&E. This tremendous quality of adaptability to contemporary fast living has made OTT an integral part of mainstream cultures.
Simultaneously, it is not just the viewers, OTTs have made it simpler for media and entertainment enterprises to present their content to their target viewers through individual OTT apps. Simply having a reliable internet connection and a smart device—both of which are widely accessible to the general public—is enough to provide and access the contents of an OTT platform. More than 80% of US homes with TVs now have at least one Smart TV device. This is merely another prominent example of the giant prevalence of OTT platforms to the modern audience.
Another important factor you should consider while deciding if you are going to jump onto the OTT bandwagon, the OTT market is presently occupied by only a handful of key players. This means, there is presently a massive opportunity for new businesses to claim their share of the lucrative OTT pie. Businesses launching their OTT apps in the market now have the opportunity to become early contenders in the vibrant future OTT market.
OTT Revenue Models - How to monetize your OTT Platform?
Say you are building an app for yourself, you are convinced this would help you reach a large amount of audience, but you probably are not doing it just for the sake of reaching out to a bunch of people, right? So here we are at that one crucial discussion of how to make money from an OTT app. In other words, is the ROI from OTT platforms worth building an OTT app?
SVOD, TVOD, AVOD and Hybrid
OTT apps can be monetized in multiple ways. Firstly, we can get our viewers to subscribe to our platforms to avail of services. These are called SVOD services where viewers subscribe to get access to Video-on-Demand services. You can also have transactional VOD (TVOD) services where your viewers pay you a one-time amount to buy a video to which they will have permanent access. You can have premium contents on your platform that cannot be found elsewhere so that viewers have to subscribe to your platform to access them. It is also possible to make money by providing free content in your app. You can include in-app advertisements (AVOD) to monetise your free content.
You can also choose a hybrid format offering a mix of SVOD, TVOD and AVOD. The hybrid format is a good in-between in terms of marketing where your viewers can watch a selected range of free content and have to buy a subscription to get access to the rest of the premium content. 60% of OTT providers claim that the hybrid business model suits them the best and also helps in increasing the number of subscriptions. You can further accelerate your OTT monetisation process through discounts and promotions. Lastly, you can consider having video paywalls. In this scheme, your OTT app is going to offer different sets of features for different subscription prices.
Overall, OTT apps have quite flexible monetizing options that give you a lot of options to choose from to suit your business model perfectly. Meanwhile, your viewers also get a wide range of choices based on their needs and budget.
Investing to create an OTT App- Buy or Build?
There are a few ways to get an app for your individual OTT platform and you can always weigh your options depending on the amount you are looking forward to investing. The quickest and cheapest way to create your own OTT app is to build it through already present frameworks, like the Amazon App Builder. Here you can opt to host your content through an Amazon TV app. The obvious problem with this is that you can barely have any customisations for your app.
To be able to create an OTT app that is customised to attract your target user base, and fit into your business model, you would have to build your OTT app from scratch. You can choose to build your app in-house. In this way, you would have to hire a team of developers, designers and overhead management to run the project. Although this allows you maximum involvement in the process of building your app, it is not the most time or cost-effective way to build a customised OTT app for your platform.
A much more hassle-free yet productive way to get your OTT app built is by hiring an OTT app development company. Such companies not only have expert teams of developers and designers, but they are also likely to be more experienced in project management. This would allow you to save some precious bucks as they use a perfect optimisation of time and resources for your project and deliver your app on time.
(Probably a good place to hyperlink the OTT app dev service page here: At 4 Way Technologies, Our team of experienced OTT developers are motivated to cater to your unique needs to build you OTT apps with all the functionality tools necessary for your business and target audience. We strictly follow an agile methodology for our projects to always keep you in the loop regarding the development of your product so that you can always stay actively involved and also get your app delivered timely. Delete if unnecessary).
Cost of Developing an OTT App
The cost of developing an OTT app depends upon various factors. Developing a simple, basic OTT can cost around 5,000 USD but the price goes up significantly if you are looking forward to building a complex OTT app with multiple features and user-friendly designs. Let us first briefly skim over the main factors that influence the cost of developing OTT apps.
Factors Influencing Development Cost
- App features and level of complexity
- The total number of platforms and devices intended for launching the app
- Size of data inventory bundle for streaming content
- Streaming features like live streaming and VOD
- Estimated user traffic
- Required tech stack
- Geographic location
- Quality of developers
- Timeline of the project
Let us go through some numbers based on some of these factors so you can get a rough idea about how to estimate the cost of the OTT app that you are looking forward to building.
Firstly, there is a substantial difference in the hourly compensation of OTT app developers across different countries. This difference does not always necessarily reflect on the expertise or skillsets of the developers. You can always freely choose developers based on your comfort. Here is a small comparison of estimated expenditures for developing an OTT app in India and the USA:
|Country||Hourly Pay of Developers||Development Cost of an OTT App|
|India||30 USD - 50 USD||25,000 USD - 60,000 USD|
|USA||120 USD - 170 USD||90,000 USD - 150,000 USD|
The development process of your OTT app would have some specific stages. The time and resources required, including human resources, during these stages are the ultimate determiners of the cost of building your OTT app. Simultaneously, the time or resources required would again depend on the features of your app, your anticipated user base, and the size of your content database. The expertise of developers and the technology used in the process of development also affect the time and resources factor. The following table shows a rough estimation of the development cost of a fairly complex OTT app at the different stages of development:
|Stage of Development||Approximate hours required||Cost @ 50 USD/ hour||Cost @ 140 USD/ hour|
|UX/UI Design||80 hrs||4,000 USD||11, 200 USD|
|MVP Development||230 hrs||11,500 USD||32,200 USD|
|Integrating Custom Features||530 hrs||26,500 USD||74,200 USD|
|Testing/ QA||120 hrs||6,000 USD||16,200 USD|
|Total||960 hrs||48,000 USD||134,400 USD|
It is important to note here that we discussed the initial cost of launching an OTT app in this segment. The cost of maintenance has not been included here. Your OTT app would need regular maintenance services like bug fixing, updating, pushing new features, and adding fresh content. The OTT app development company you partner with is likely to assist you completely in this process.
How to cut costs during OTT App Development?
Team up with an OTT app development company
As we already discussed, an OTT App development company is likely to be more efficient at managing your OTT app development project. Efficient project management would save you time and resources, both of which ultimately mean saving money. Also, partnering with an OTT app development company would likely ensure that the maintenance of your OTT apps is hassle-free. Companies like 4 Way Technologies have in-house automated testing tools which help early detection of bugs and easy bug fixing with minimal testing debts.
Be clear about your requirements
This is useful for a handful of reasons. Firstly, if you are clear about the specifications you need to be built in your app, it would be much easier for your developers to plan the project. This would save you precious time as well as excessive involvement during the development process. Having a clear idea and plan for the app development would also ensure that no time is wasted in redoing any aspect of the development. As time and consultation both ultimately translate into money, it is going to save you a significant amount of your app development expenditure if you approach your developers with a distinct plan for your OTT app.
Wrapping up, we discussed the rapid rise and business opportunities associated with the OTT market and why it might be a good time to create an OTT app for your business. We discussed the different business models to optimise the ROI of your OTT apps, the approximate costs of building and maintaining them, and how to reduce expenditure during the development of your OTT app.
So when are you creating your own OTT app?
Sam took the long path into the world of IT. A post-grad in Bioinformatics, she started coding to build better programs for protein sequencing. Currently, Sam actively writes blogs for 4 Way Technologies. She's always excited about all the new technologies and updates in software development. Sam also writes coding tutorials and beginners guides for, well, beginners.