What Are OTT Apps? OTT App Cost and Should You Build One?

OTT Apps

Building your own OTT app might be the ideal way to become a video entrepreneur.

OTT apps are everywhere. The age of smart TVs and mobile streaming has changed the expectations people have about media.

Movies, shows, and informative tutorials are no longer confined to a single format or device. Consumers want to access content on their own terms – anytime, anywhere, on any device.

This pushes the standard higher for content creators. Being visible and accessible on a single platform just isn’t enough. You need to be able to reach your audience on whatever channel they choose.

This isn’t news to most content creators. Today’s over-the-top media trend has been cooking for years. But it’s now, in a post-pandemic media environment, that things are beginning to truly change.

One-half of all Wi-Fi connected homes in the United States use OTT apps for at least 100 minutes a day. 40% of those homes use a streaming box to play OTT content directly on their television. Every day, more and more people start doing the same.

The time has never been better for content creators to invest in creating a branded OTT app of their own. Releasing your own OTT app can jumpstart your media strategy by leveraging this high rate of user adoption.

What Are OTT Apps, Exactly?

Over-the-top applications are media delivery solutions that use the Internet to stream content to multiple devices. These devices can be televisions, mobile phones, game consoles, and more.

ott apps

Netflix is the quintessential OTT app:

  • If you have a Smart TV, you can open up the Netflix app immediately and start streaming.
  • If you have a streaming box, you can access the app from the box and display it on any TV.
  • You can watch Netflix on a tablet or a smartphone.
  • You can access your account and watch shows from any web browser.
  • If you have a Playstation, you can access your Netflix account from there, too.

Practically any Internet-connected device with a screen is a Netflix device. That unprecedented level of accessibility is what makes the OTT app experience special.

As a result, people are used to the idea of enjoying content on their own terms. Content creators are under pressure to accommodate that expectation across devices. OTT apps allow them to do that.

What Makes OTT Apps So Popular Among Viewers?

There are three main factors contributing to the widespread success of OTT apps:

  • Reduced Costs. The average household cable package is $217.42 per month. That’s more than what American households pay for electricity, gas, water, sewage, and garbage services combined. OTT apps offer high-quality content at a fraction of this price. Viewers can subscribe to multiple different services and still earn major savings.
  • Accessibility Across Devices. It’s generally not possible to pause cable television, talk a walk outside, and pick up where you left off on your mobile phone. For OTT apps, this is a basic functionality that viewers have come to expect. People who care about the content they consume do not want to miss anything.
  • Customization and Control. Half of all OTT users have multiple subscriptions. Viewers are happy to pay for additional services that personalize their content library and reflect their unique tastes and priorities. Cable television cannot offer the same degree of customization or content control.

Until recently, these factors made OTT apps an upsell option for smart TV buyers. Since the COVID-19 pandemic, these functionalities have increasingly become standard.

Benefits to Building Your Own OTT App

Your business may have the $200 billion market capitalization that Netflix has. You may not have 36,000 hours (about four continuous years) of content available – but it doesn’t have to.

own ott app

If you have an audience that values the content you produce, building your own OTT app may be a sound business strategy. The benefits may far outweigh the costs:

1.   OTT Apps Reduce Customer Churn

Making your content more widely available makes it easier for people to access and consume it. This simple truth has far-reaching implications when it comes to customer churn.

Customer churn is the percentage of users who sign up for your service but fail to become regular customers. These are the people who start free trials and then never renew them, or who cancel their subscriptions right after they see what your platform is all about.

Most businesses try to reduce customer churn by identifying the reasons why customers leave. A small survey is usually all it takes. Many organizations see a significant number of users who claim they “just don’t have enough time” for content they admit they like.

What this really means is that your content is not available on their preferred channel or device. Nobody is going to pull out a laptop to stream your content while commuting to the office, waiting at the doctor’s office, or working out at the gym. They still consume content during those activities – just not yours.

By making your content widely available on every kind of device through an OTT app, you can ensure users always have the time they need to hear your voice and respond to your messaging. This addresses a major pain point, eliminates a common source of user experience friction, and reduces customer churn as a result.

2.   OTT Apps Increase Customer Conversions

Making your content widely available on multiple devices expands your potential audience. Opening yourself up to new subscribers means you can actively address viewer segments that were previously out of reach.

customer conversion

Millions of people are cutting their cable connection, yet consuming content more than ever. The combination of freedom and convenience makes this medium an ideal place to address your audience. This is especially true for Video-on-Demand (VOD) businesses, publishers, and educators.

On average, video-on-demand services that monetize their content through an OTT app grow their audience and revenues by about 30%. Much of this growth comes from engaged audience segments that are outside the populations that cable providers and online video hosting services can address.

OTT apps are not geographically limited the way cable TV channels are. Opening up content to new audiences is often little more than a matter of localization and translation – there is no need for additional infrastructure. Your OTT app can generate value from audiences all over the world at little-to-no extra cost compared to your current content creation workflow.

Additionally, OTT apps are able to track and analyze user engagement data. This means that content creators can leverage deep insights into their audiences behaviors and create content that addresses their needs more closely. They can also seek out partnerships with vendors whose interests align with their audience’s, making the advertising environment far more effective than what cable TV can offer.

How Much Does Building Your Own OTT App Cost?

Building and deploying a professional-grade OTT app is a resource-intensive project. While there are enormous benefits to be gained by building your own app, enjoying those benefits will demand time and capital.

ott app cost

The total cost for building your own video streaming app depends on the following six factors:

  • Consider how your app should display content to users. Should it predict user preferences? Capture user analytics for marketing purposes? These features will impact the price of the development project.
  • Developer Size and Location. Who (and where) you hire has a major impact on OTT app development costs. Many businesses take advantage of labor arbitrage to lower development costs. Others insist on working with local partners they can trust, even if it costs more.
  • Compatible Platforms. Platform compatibility is one of the main advantages to building an OTT app, but not all apps work on all platforms. You may have to be selective about which platforms represent the greatest value to your viewers, and add new ones gradually over time.
  • Required Tech Stack. The app development process relies on a large number of other technologies. This collection of technologies the “stack” upon which developers build the final product – and each one comes with its own costs.
  • Developer Experience. Whether hiring offshore developers or local agencies through IT staffing and recruiting, experience will always command a higher premium. It’s up to you how valuable that experience is, and whether paying for top-notch talent is worth the extra expense.
  • Project Timeline. The more time you can afford to spend in development, the more cost-effective the process can be. Putting developers on crunch-time for a product that needed to be released yesterday will always incur extra costs.

That said, a reasonable budget estimate for making your own OTT app may be somewhere in the range of $25,000 to $45,000. If you’re looking for a starting point for planning your own OTT development budget, this will give you a ballpark figure to build from.

Prepare your Business for the OTT Era

It’s easy to look at streaming giants like Netflix and think that it’s too late for brands to join the OTT trend, but that’s not entirely true. The OTT media market has huge untapped potential, and today’s publishers and educators are in the perfect position to capitalize on its growth by developing their OTT app experience now.


Originally published on April 30th, 2021, updated on May 4th, 2024
The Blog

What Are OTT Apps? OTT App Cost and Should You Build One?

by Austin Jesse Mitchell time to read: 6 min