OTT Shakes Up its ‘Traditional’ Business Model with Original Content

Unless you’ve been living under a rock or stationed in Antarctica for the last 18 months, odds are you’ve heard at least someone talk about how great Netflix’s Emmy-winning House of Cards is. Because of the quality of the program and the hype it has received, it can practically inarguably be said that the Kevin Spacey-led show is truly game-changing in the world of over-the-top (OTT) programming. And other OTT providers have followed suit, with Amazon’s Alpha House and Chipotle’s Farmed and Dangerous (appearing on Hulu) proving how content providers view the future of television.

Whatever the case may be, the OTT market is evolving and growing, shaking up the business model regarding what it means to be successful in the television industry. With this in mind, more OTT providers like Netflix will likely emerge, striving to offer exclusive content that can only be viewed through subscriptions to their services.

Recent research by MRG indicates that the OTT subscription video on demand (SVOD) market—already valued at $4.7 billion—will swell to $8 billion by 2017, growing from 66 million to 120 million subscribers during that time period.

“Consumers are demanding a personalized video viewing experience and a large variety of content to be available on those devices,” the report by MRG reads. OTT services like Netflix, Amazon Prime and Hulu Plus that enable a multiscreen viewing experience are “well suited to fulfill these expectations.”

Netflix certainly made the case that producing original content is possible outside of the standard television production circles, and it appears that the future of programming begins there.

“The success of Netflix-produced House of Cards and Google’s leasing of a 41,000-square foot video production facility in Los Angeles—plus other content production initiatives by players like Amazon, Hulu and others—suggest that self-production now looks less like a fad and more like a trend,” Generator Research noted earlier this year.