Case Study: Feasibility Study for a Regional Online Video Streaming Service
A famous celebrity wanted to start an OTT (Over The Top) service with original regional content and aspired to get as many as one million users per month.
About the client:
A client wanted to start an Over-The-Top (OTT) Service. They wanted to produce original content, especially, in a regional languages. He was looking research and solutions on how to start the service and how to market it once it was developed.
They initially wanted to focus on regional content targeting people across the globe. The target number of users, the client wanted to set for themselves were 10,00,000 users/month. They wanted to simply create a website and upload all content there. For this, they had kept aside a budget of Rs. 1.5 Crore for the first year.
We explained that even if the developed product were good, the product might end up failing because the concept/idea of OTT already exists. So, a new entrant in the domain does not solve any pain area for a large set of users. Hence, we decided to do a dipstick research to find out whether the idea was feasible/sustainable.
Since content creation and its costs were already taken into account by the client, we, in our research, chose to focus on examining how to distribute the content and later on, market it.
To host online videos, we first require a Content Delivery Network (CDN). These services are provided by many cloud-computing platforms. By taking these services, we ensure that stored data (like video) does not slow down our primary hosting/website. And since we required data to be a streamed in real-time, the sheer amount of data made it a necessity to consider using a CDN.
Generally, CDNs charge businesses based on the bandwidth consumed by the businesses. If the data consumption and/or the number of the user varies, so will the cost.
But when we considered all costs, we could estimate that the total costing for this product for the initial period would end up exceeding Rs. 1.6 Crore a month, at least for the initial 6 months.
The project was not viable. It could not be taken off. The investment in the project, thus, exceeded the initial budge set by the client.
Our suggestion was to re-evaluate the market and do a deep dive study before starting the development of the product. Since the OTT content already existed in the market, there was no first mover’s advantage.
The only leverage that the client could have was based on the originality or the quality of the content.
Secondly, we recommended that since the initial costs were very high, they could follow the model of a media company, like Buzzfeed, where the focus lies on creating and developing the content. For distribution, the client could use platforms like Facebook Watch, YouTube, or their own website (with YouTube embedding), or even launch a mobile App, instead of relying on a dedicated CDN.
That way the client would not have to focus on how to distribute content, but where and how to promote it, thus reducing the setup cost significantly.