Case Study: Feasibility Study for Regional Online Video Streaming Service
A famous celebrity aimed at starting an OTT (Over The Top) service with original regional content and aspired to get as many as 10,00,000 users per month.
About the client:
A famous celebrity (a well-known personality in the film industry) wanted to start an Over-The-Top(OTT) Service. They were capable to produce their own original content, especially regional content. They wanted to look for how to start the service and 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 & upload all content there, and for this, they kept aside a budget of Rs. 1.5 Crore (for the 1st Year).
Our initial thought was that even if the developed product is good, but the concept/idea already exists or does not solve any pain for a large set of users, then the product will end up failing. Hence, we decided to do a dipstick research to find out if the idea was feasible/sustainable or not.
During our research, since content creation and its costs were already taken into account by the client, we focused on checking how to distribute the content & later 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 service, we ensure that stored data (like video) does not slow down our primary hosting/website.And since we required data to be a stream 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.
So if the data consumption and/or a number of the user varies, so will the cost.
But if we consider all costs (based on the model shown in the figure), then we estimated that the total costing for this product for the initial period would end up exceeding Rs. 1.6 Crore/month (minimum), at least for the initial 6 months.
After 6 months (in the best case), the amount would at least get half of it if not more (as the product would be in the introductory phase, as per its product lifecycle) and thus, exceed the clients initially set a budget if the product was to survive in the long run.
Our suggestion was to re-evaluate the market and do a deep dive study before starting the development of the product since the idea/concept was already existing in the market, so there was no first mover’s advantage.
The only leverage that the client could have is based on the content.
Secondly, we recommended that since the initial costs are very high, they could follow the model of Media Company, like Buzzfeed, where our focus lies on creating/developing the content. And for distribution instead of relying on a dedicated CDN, we could use platforms like Facebook Watch, YouTube, Website (with YouTube embedding), Mobile App, etc.
That way we don’t have to focus on how we distribute content, but where and how we promote the content instead, thus reducing my setup cost significantly.