Digital Transformation in the Media Industry: Guide to Strategy, Challenges, and Building Custom OTT Solutions

Quick Summary:

This blog explores how digital transformation is reshaping the media industry, specifically through custom OTT platforms. It discusses strategies, challenges, and key trends, offering insights for media companies looking to leverage OTT solutions for growth and innovation. Scalevista offers expert support to guide this transformation.

According to the Gitnux Report, 80% of media companies now view digital transformation as their top strategic priority.

In an age where 65% of consumers prefer streaming platforms over traditional TV, OTT app development is more essential than ever.

The global entertainment and media market is projected to reach US$3.5 trillion by 2029, with digital platforms leading the growth.

Companies are leveraging live streaming app development and personalized content delivery to meet the growing demand for digital experiences.

Reuters, in a report, highlighted the quote: “Media companies must embrace technology and data as core assets to stay competitive,” says Bart Spiegel, Global Entertainment & Media Leader at PwC. “The future belongs to those who can innovate and adapt through digital transformation.”

This blog is a guide to help you navigate the complexities of digital transformation services in the media industry.

So, this guide will help you understand:

• Key strategies for digital transformation in the media industry.
• Steps to build a custom OTT (over-the-top) platform.
• Challenges in OTT platform development and how to overcome them.
• Why should media companies consider Scalevista for custom OTT solutions?

Let’s begin.

What are the Key Strategies for Digital Transformation in the Media Industry? 

The key strategies for digital transformation in the media industry are:

• Embrace cloud technology for scalable content distribution.
• Leverage AI for personalized content recommendations.
• Streamline production workflows using digital tools.
• Integrate data analytics for real-time audience insights.
• Implement multi-platform content distribution (OTT, Mobile, Web)

Media companies that wish to stay competitive must embrace technological advancements to enhance efficiency, improve user engagement, and drive innovation.

Let’s dive into the key strategies for a successful digital media transformation.

1. Embrace Cloud Technology for Scalable Content Distribution

Cloud technology provides media companies with scalable solutions that enhance content delivery without compromising performance. 

As demand for video-on-demand platforms continues to grow, OTT platform development and cloud integration are pivotal to delivering seamless, high-quality experiences across devices.

2. Leverage AI for Personalized Content Recommendations

Consumers today demand personalized experiences. Leveraging AI-driven content recommendations allows media companies to tailor their offerings to individual preferences, increasing viewer retention. 

Video streaming platform development with AI integration helps keep viewers engaged by suggesting content that aligns with their viewing history and interests.

3. Streamline Production Workflows Using Digital Tools

Efficiency in content creation and distribution is key. Implementing digital tools to streamline production workflows. These include automated editing software, real-time collaboration tools, and project management platforms, which reduce overhead costs and accelerate time-to-market. 

This ensures a competitive edge in the fast-paced media environment.

4. Integrate Data Analytics for Real-Time Audience Insights

Understanding audience behavior is crucial for media companies to stay relevant. Data analytics enables real-time insights into viewer preferences, viewing patterns, and engagement. 

Digital technology in media leverages this data to make informed decisions about content creation and distribution, ensuring content resonates with the target audience.

5. Implement Multi-Platform Content Distribution (OTT, Mobile, Web)

To maximize reach, media companies need to deliver content across multiple platforms. Developing a custom OTT platform ensures a unified experience across devices, whether it’s through streaming services, mobile apps, or websites. 

Multi-platform content distribution ensures that your audience can access content anywhere, anytime, leading to higher user engagement and satisfaction.

What Are the Latest Trends in the Media and Entertainment Industry?

The latest trends in the media and entertainment industry are:

• Growth of direct-to-consumer (D2C) OTT platforms
• Increasing demand for personalized and interactive content (AR/VR)
• Expansion of AI-powered content curation and recommendations
• The role of 5G in delivering high-quality streaming

As media companies embrace digital transformation, staying ahead of the latest trends is crucial to staying competitive.

Let’s take a closer look at the key trends reshaping the industry:

1. Growth of Direct-to-Consumer (D2C) OTT Platforms

The rise of OTT platforms has been one of the most significant shifts in recent years. Consumers increasingly prefer on-demand content, leading to the explosive growth of D2C OTT platforms. This shift empowers content creators and distributors to bypass traditional media networks and deliver content directly to their audiences via subscription-based models.

The D2C model allows for enhanced audience engagement, greater control over content distribution, and a more personalized experience for viewers.

2. Increasing Demand for Personalized and Interactive Content (AR/VR)

As media consumption evolves, so does the demand for interactive content. Viewers are no longer just passive consumers; they seek immersive experiences.

Augmented Reality (AR) and Virtual Reality (VR) are increasingly important in content creation, offering richer, more engaging experiences.

Personalized content curation, powered by AI, further enhances this by ensuring that each viewer receives recommendations tailored to their interests and viewing habits.

3. Expansion of AI-powered Content Curation and Recommendations

AI technology is revolutionizing how content is curated and delivered to viewers. By analyzing user data, AI enables personalized content recommendations, making it easier for viewers to discover new content they love.

For media companies, this leads to increased engagement and viewership, while also providing valuable insights into audience preferences and behaviors. With AI-driven algorithms, media companies can optimize their content strategies and improve user satisfaction.

4. The Role of 5G in Delivering High-Quality Streaming

The advent of 5G technology is set to enhance media consumption by providing faster internet speeds and low-latency streaming. This enables high-quality video streaming on mobile devices, even in areas with limited connectivity.

For OTT architecture and media companies, 5G opens new opportunities to deliver high-definition video content without buffering or delays.

As 5G becomes more widely available, expect to see an uptick in live streaming events, gaming, and other media formats that require high-bandwidth data transmission.

Build vs. Buy: Should You Build a Custom OTT Platform or Use an Existing One?

When it comes to OTT platform development, businesses in the media industry often face the decision of whether to build a custom OTT platform or adopt an existing solution. This choice can significantly impact your company’s ability to scale, innovate, and stay competitive in an increasingly complex media landscape.

Comparison Table: Build vs. Buy Decision Matrix

How to Build a Custom OTT Platform: Step-by-Step Guide

The key steps for building a custom OTT platform are:

• Market Research & Requirement Analysis
• Platform Design & Development
• UI/UX Design
• Backend Development
• Security & Content Protection
• Testing & Launching
• Ongoing Maintenance & Scalability

Building a custom OTT platform is no small feat. These platforms offer the flexibility to integrate unique features that align with the company’s specific goals and audience needs. But how do you build a custom OTT platform that sets your brand apart?

Here’s a step-by-step guide to help you understand the key steps involved in building a custom OTT platform from scratch.

1. Market Research & Requirement Analysis

The first and most crucial step in OTT platform development is conducting thorough market research. This will help you understand the target audience’s preferences, behavior, and what they are looking for in an OTT service.

You’ll also need to define the features that your platform will offer, such as:

• Subscription model (SVOD, AVOD, TVOD)
• Content categories (movies, documentaries, live sports, etc.)
• Monetization strategies (advertisements, pay-per-view, subscriptions)

Understanding your audience’s content consumption patterns is crucial. For example, are they more inclined to watch video content on mobile devices, desktops, or smart TVs? Such insights will help tailor your platform’s features to their preferences.

2. Platform Design & Development

Once you’ve gathered your insights, the next step is to design and develop your OTT platform. This involves the following considerations:

Choosing Between Native vs Hybrid Platforms

• Native platforms are built specifically for a particular operating system, offering optimized performance and the best user experience.
• Hybrid platforms are designed to work across multiple devices and operating systems, allowing for wider reach with less development time.

Cloud Infrastructure and Storage Options

Selecting the proper cloud infrastructure for hosting your platform is essential. Consider cloud providers such as AWS, Google Cloud, or Microsoft Azure, which offer scalable, high-security solutions.

Cloud infrastructure will ensure your platform can handle high traffic volumes and large-scale content storage while delivering seamless streaming experiences.

Video Encoding and Delivery

Video encoding is critical in ensuring smooth content delivery across multiple devices and network conditions. Work with industry-standard video encoders and use adaptive bitrate streaming protocols such as HLS (HTTP Live Streaming) or DASH (Dynamic Adaptive Streaming over HTTP) to deliver the best video quality.

3. UI/UX Design

A user-friendly UI/UX is essential in retaining users on your custom OTT solutions. The layout should be intuitive, clean, and easy to navigate. Consider the following design principles:

• Simple navigation: Make it easy for users to search for and find content.
• Interactive elements: Include features like bookmarking, recently watched content, and personalized recommendations.
• Mobile-first design: Given the growing number of mobile users, ensure your design is responsive and mobile-friendly.

4. Backend Development

The backend development of your OTT platform is just as critical as the front-end. You’ll need robust systems to manage your content library, user data, and subscription models. Key components of the backend include:

• Content Management System (CMS): To organize and manage your video library efficiently.
• User Management: For managing user accounts, access rights, and user preferences.
• Payment Gateway Integration: Integrating secure payment systems like Stripe, PayPal, or others for processing subscription payments and rentals.

5. Security & Content Protection

Security is a top priority in custom OTT platform development. You need to ensure that both your content and user data are safe from piracy and unauthorized access.

• Digital Rights Management (DRM): Use DRM technologies to prevent unauthorized distribution of your video content.
• Geo-blocking: Implement geo-restrictions to control access based on user location, which is essential for licensing agreements and protecting regional content.
• Data privacy regulations: Ensure compliance with global standards such as GDPR or CCPA to protect user data as a part of OTT app security.

6. Testing & Launching

Before launching your OTT platform, thorough testing is crucial to ensure its stability and functionality.

Consider the following types of testing:

• Functionality testing: Verify that all features work as expected.
• Performance testing: Check how your platform performs at different traffic levels.
• Security testing: Ensure all security features function correctly to prevent data breaches and piracy.

7. Ongoing Maintenance & Scalability

Building an OTT platform doesn’t end at launch. Continuous maintenance and updates are required to ensure the platform stays secure, performs well, and evolves with user expectations.

• Scalability: As your audience grows, your platform should scale seamlessly. This is where cloud-based solutions come in handy, enabling easy scaling as your user base grows.
• Content updates: Regularly add new content to keep your users engaged and retain them over time.
• Bug fixes and updates: Release periodic updates to fix bugs, improve performance, and introduce new features.

The Cost to Develop a Custom OTT App

Factors Influencing the Cost of Building a Custom OTT Platform

The cost of OTT app development can vary significantly depending on several factors, including platform features, infrastructure complexity, and the technologies involved.

Let’s take a closer look at the main contributors to the overall cost of building a custom OTT app:

• Platform Complexity: The more complex the platform, the higher the development cost. A custom OTT platform that integrates multiple content delivery methods, user authentication, payment gateways, and advanced analytics will require more development time and resources than a basic streaming app.
• Features and Functionalities: Features such as multi-device support, live streaming, AI-powered personalization, content protection (DRM), and subscription management will increase costs. The more features you incorporate, the higher the investment.
• Design & User Experience (UX/UI): A seamless, intuitive user experience is crucial for OTT platforms. Investing in UI/UX design ensures that users can easily navigate the platform, enhancing user engagement and retention. Custom designs often cost more but offer a unique, branded experience.
• Content Delivery Network (CDN): To provide smooth streaming experiences without buffering or delays, using a CDN is essential. Selecting a CDN will affect both your initial and long-term operational costs.
• Security and Content Protection: As piracy and unauthorized access to content remain significant concerns, investing in Digital Rights Management (DRM) and content encryption can increase initial development costs but ensures content protection, which is crucial for any OTT service.
• Platform Maintenance and Scalability: As your platform grows, ongoing maintenance and scalability will require additional costs for regular updates, bug fixes, and handling increasing content and user traffic.

ROI Timeline Projection

The ROI timeline for an OTT platform can vary depending on factors such as market demand, content strategy, and monetization models.

Here’s a general breakdown:

• Short-Term ROI (0-12 months): In the first year, OTT platforms may focus on building their user base, testing different monetization models, and improving features. During this phase, return on investment may be low as the platform works to gain traction.
• Medium-Term ROI (12-24 months): As the user base grows, you can start generating consistent revenue through subscriptions and ads. By continuously optimizing the user experience and adding new content, you will likely see a steady increase in ROI.
• Long-Term ROI (24+ months): After the initial 2 years, the OTT platform should reach profitability. At this stage, consider expanding into new markets, diversifying content, and leveraging advanced technologies like AI and machine learning to drive further growth and engagement.

How Do Challenges Affect Digital Transformation in the Media Industry? 

The key challenges in OTT platform development are:

• Legacy system integration and its complexities
• Managing a multi-platform content distribution system
• Technical challenges with scaling OTT platforms
• Security concerns around digital content distribution
• Ensuring the protection of intellectual property (IP)

This section will explore key challenges in OTT platform development and how they affect the media industry’s digital transformation journey.

1. Legacy System Integration and Complexities

• Older systems may not be compatible with modern technologies.
• Difficulties in integrating legacy content management and broadcasting infrastructures.

2. Managing Multi-Platform Content Distribution

• Ensuring smooth distribution across multiple platforms (mobile, smart TVs, web, etc.).
• Variability in device capabilities, screen sizes, and operating systems.

3. Technical Challenges with Scaling

• Scaling to handle increasing user traffic and expanding content libraries.
• Ensuring high performance without affecting the user experience during peak usage.

4. Security Concerns Around Digital Content Distribution

• Piracy and unauthorized content distribution risks.
• Protecting intellectual property (IP) and ensuring secure content delivery.

5. Ensuring the Protection of Intellectual Property (IP)

• Risk of content theft and unauthorized redistribution.
• Protecting original media content from piracy and misuse.

How Do You Overcome the Key Challenges of OTT Platform Development?

To overcome the key challenges of OTT platform development, follow these:

• Overcoming integration issues with legacy systems
• Ensuring scalability and high uptime for large audiences
• Security best practices for OTT content
• Regulatory compliance in different regions (GDPR, etc.)

Overcoming the challenges of OTT platform development requires a strategic approach. Below are solutions that can help media companies mitigate these obstacles and accelerate their digital transformation.

1. Overcoming Integration Issues with Legacy Systems

• Use cloud migration to transition from outdated infrastructure to scalable, flexible cloud solutions.
• Leverage middleware solutions and custom APIs to enable communication between legacy systems and new technologies.

2. Ensuring Seamless Multi-Platform Distribution

• Content Delivery Networks (CDNs) can efficiently deliver content to users worldwide, minimizing latency.
• Adopt a responsive design for seamless user experiences across devices.
• Use cross-platform development frameworks to ensure consistent performance across platforms.

3. Scalability and High Uptime Solutions

• Implement cloud infrastructure with elastic scaling to handle traffic spikes.
• Use load balancing and CDNs to ensure high availability and fast streaming.
• Deploy a microservices architecture to simplify platform management and scaling.

4. Strengthening Security Measures

• Implement Digital Rights Management (DRM) solutions to protect content.
• Use encryption during content transit and storage to safeguard user data and content.
• Incorporate multi-factor authentication (MFA) to prevent unauthorized access.

5. Protecting Intellectual Property (IP)

• Use geo-blocking and region-specific restrictions to control access to content.
• Implement strong encryption and watermarking to protect content and deter piracy.
• Regularly monitor platforms for unauthorized use and promptly remove pirated content.

Why Should Media Companies Consider Scalevista for Custom OTT Solutions?

In an era where streaming content is the preferred mode of media consumption, businesses need to ensure they can deliver personalized, secure, and scalable OTT (Over-The-Top) platforms.

This is where Scalevista comes in as an ideal partner for custom OTT platform development.

Scalevista creates custom-built, future-ready OTT platforms designed to evolve with your business. 

Here’s why you should choose Scalevista:

1. Tailored Innovation

No one-size-fits-all solutions here. Scalevista builds OTT platforms that reflect your unique brand and audience, driving greater engagement and content impact.

2. Strategy-Driven Growth 

It’s not just tech—it’s a roadmap for success. Scalevista integrates your business goals with cutting-edge technology, helping you stay ahead in a fast-moving market.

3. Future-Proof Solutions 

Scalevista builds platforms that adapt as technology evolves—ensuring scalability for AI, 5G, and immersive content trends.

4. Seamless Integration

Scalevista ensures your new OTT platform works perfectly with your existing systems—streamlining operations and optimizing performance.

5. Media Expertise

With a deep understanding of the media industry, Scalevista creates platforms designed for monetization and growth, not just functionality.

6. Full-Cycle Support

From launch through ongoing optimization, Scalevista is a true partner, helping you scale and continuously improve your platform.

Don’t settle for basic—choose Scalevista to build an OTT platform that drives success and future growth.

Closing Thoughts

Digital transformation in media companies is critical and aims to thrive in today’s competitive landscape. By building a custom OTT platform, businesses can deliver personalized experiences, scale more easily, and enhance monetization strategies.

Key Takeaways:

• Importance of Custom OTT Platforms

A custom OTT platform allows companies to meet specific needs, offering full control over features and integration with existing systems.

• Addressing Key Challenges and their Solutions

Overcoming challenges such as fragmented experiences and complex integrations requires a strong digital transformation strategy, with the right technology to ensure scalability and security.

• Building a Custom OTT Platform

Key steps for building a custom OTT platform are covered, including market research, platform design, UI/UX development, and ensuring robust security and content protection.

Ready to transform your media business?

Reach out to Scalevista for a consultation on building a custom OTT platform that suits your unique needs.

FAQs

1. What is digital transformation in the media industry?

Digital transformation in the media industry involves adopting advanced technologies like AI, cloud computing, and data analytics to enhance content creation, distribution, and consumer engagement, improving efficiency and delivering personalized experiences.

2. What is the effect of digitalization on the media industry?

Digitalization revolutionizes how content is produced, consumed, and monetized, enabling greater reach, personalization, and efficiency. It enhances audience targeting and offers innovative revenue models through streaming, on-demand services, and data-driven insights.

3. Why is digital transformation critical for media companies right now?

Media companies need to stay competitive, improve operational efficiency, and meet growing consumer demands for personalized, on-demand content across multiple platforms, ensuring long-term relevance and profitability in a rapidly evolving market.

4. What are some examples of digital transformation in the entertainment industry?

Examples include streaming services like Netflix and Spotify, which leverage cloud technology for scalable content delivery, AI for personalized recommendations, and big data for customer insights, revolutionizing how consumers access and enjoy content.