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Does the Samsung Galaxy Grand Neo GT-i9060 have USB OTG (usb-on-the-go)? Can I instantly watch movies directly from OTG without copying files into my phone? If not, is there any other way to get OTG working?
The Galaxy Grand Neo from my reading does not support USB OTG.
You could just stream videos onto your phone from your PC / Desktop, and there are plenty of apps to do that.
There is some great further reading in this question "How can I determine if my device has USB host mode & USB OTG Support."