OTT or over-the-top technology has been regarded as the future of entertainment for a few years already. This technology allows content providers and broadcasters to deliver video across various devices using the internet.
This distribution method proved much superior to traditional distribution methods, which led to a mass exodus of users from dying cable TV operators to various streaming platforms. As of June 2022, nearly 70 million households use OTT services in the U.S., and the number of cord-cutters is growing daily.
However, since OTT technology is still in its infancy, there’s a lot of confusion surrounding it. There are many subtle variances between OTT and similar technologies like connected TV and IPTV, and even industry experts often get them wrong.
If you’re unsure what OTT is exactly, how it works and differentiates from other video delivery technologies, or why it is so popular, you’ll find the answers in this article.
- What Does OTT Mean?
- The Ambiguity in Terminology
- What Is an OTT Platform?
- How Do OTT Platforms Work?
- Types of Content Suitable for OTT Delivery
- Most Popular Types of OTT Devices
- Benefits of OTT for Video Publishers
- Is OTT Replacing Traditional TV?
- What Lies in the Future of OTT?
- How to Build an OTT Streaming Service to Enter the OTT Market
What Does OTT Mean?
OTT stands for “over-the-top” and entails any streaming media service that distributes content via the internet. It got its name because the content gets delivered through another platform (medium), i.e., “over the top” of another device.
OTT platforms are a handy way of bypassing cable or satellite TV providers, who were traditionally in full control over content distribution. With OTT solutions, the user is typically the one who controls what they consume, not the provider.
These solutions proved more practical and flexible than linear TV since people can access most of them through various devices, not just the TV. Besides being able to access OTT services from PCs, mobile OTT apps, and tablets, there are also many dedicated OTT devices to choose from. These include gaming consoles, Smart TVs, OTT Boxes, and more.
With such high flexibility that OTT TV brings to the table, it shouldn’t be surprising that the average time spent watching over-the-top video has risen considerably over the last few years.
This sudden growth in popularity just shows how vital control and flexibility are for consumers. Where traditional TV lacked, OTT prevailed.
The Ambiguity in Terminology
Before we move on to what OTT platforms are and how they work, we must clear up any ambiguities between some of the most commonly used terms in the industry. Since few know the nuanced differences between OTT and other delivery methods like IPTV and CTV, here’s a quick overview of them.
The Differences Between OTT and Video
What is the difference between OTT and video? They are indeed similar, but there is a small but crucial difference.
- Video is content users can stream over various devices like TVs, PCs, mobile phones, and even OTT devices.
- OTT is content that providers like Netflix, Sling TV, Disney+, and others make available for streaming on various devices.
In other words, over-the-top content is provided by a service provider and usually requires a monthly subscription fee to access. Conversely, video is an umbrella term for content streamed over the web.
So yeah, all OTT content is video, but not all video content is OTT. Also, while users can often access online video for free, most over-the-top services come with a fee.
The Differences Between OTT and CTV
Many people use the terms OTT and CTV interchangeably and wrongly so. The differences between OTT and CTV are pretty subtle but significant.
OTT is the term for the method various devices use to deliver video content over the internet. However, CTV is a just type of television set connected to the internet that viewers use to watch videos online.
Let’s illustrate that with an example… If you choose to watch your favorite Netflix show on a mobile phone, you’re streaming OTT. But if you decide to watch the same show through the Netflix app on your TV connected to the internet, you’re watching CTV.
As you can see, CTV is a subset of OTT and is just one of the many devices people can use to consume this content. Users must install a specific OTT app on their connected TV device to do so.
The Differences Between OTT and IPTV
IPTV is OTT’s older cousin. The appearance of this technology caused one of the biggest shifts in how users consume video content in the last two decades. And although IPTV seems similar to OTT at first glance, there are some fundamental differences between them.
The primary difference between OTT and IPTV lies in how they deliver content. While OTT delivers videos through an open network (internet), IPTV provides them through a closed, controlled ecosystem (LAN, WAN, ISP Networks). That allows IPTV services to serve higher quality content without relying on internet bandwidth for playback.
However, the above also means that IPTV requires extra hardware to function properly and is significantly more expensive. That makes OTT the superior option for most users, despite its lower quality and dependence on internet speed.
The Differences Between OTT and Cable TV
OTT and cable TV are two entirely different worlds. While OTT delivers content over the internet, cable TV does it through a wired connection. Although cable TV can also be wireless (satellite TV), it has a few other downsides that make it inferior to over-the-top delivery.
The most significant difference is that cable TV mainly provides fixed programming schedules, forcing users to tune in at particular times to catch their favorite shows. Conversely, OTT services mostly use the video-on-demand model, allowing users to watch content whenever and wherever they want.
What Is an OTT Platform?
An OTT platform is a media or content provider that offers live or on-demand video streaming services across various devices and platforms. This term can also refer to various online video platforms providing white-label OTT solutions designed to help creators build and launch their own over-the-top streaming services.
Unlike traditional broadcasting services, most OTT platforms allow users to choose when and what they want to watch. Viewers can often even download entire films or shows at their convenience.
With the emergence and growing popularity of free ad-supported TV (FAST), some OTT platforms offer experiences similar to traditional TV but without additional expenses and hardware.
Netflix, Amazon Prime, Hulu, Disney+, and similar are some of the most famous OTT video platforms on the market.
How Do OTT Platforms Work?
From uploading a new piece of content on your OTT streaming service and users requesting to watch it, each video has a long journey ahead of it before playing on the end user’s device. Here’s a general overview of how the entire process works for most OTT platforms:
- Once the streaming platform’s owners upload a new piece of content through their platform’s CMS, the video will begin encoding in the cloud.
- After the video is encoded, the end users can request to watch it.
- Once a viewer requests to watch a video, the content will be transcoded into the most suitable video format for the end user’s device.
- The DRM software then proceeds to authenticate the end user before finishing preparing the content for delivery.
- If the user’s device successfully passes the authentification, the requested content is handed over to the platform’s CDN and transported over the internet to the user’s device.
- The user receives their content, and it starts playback.
Depending on the OTT platform, this process can vary slightly, but it will always follow these general principles.
How Is OTT Content Delivered?
Considering that OTT services are available on various devices, handling the delivery process is by no means easy. One of the most significant challenges OTT providers face is adequately adapting to various network performances and display devices. That entails adjusting data streams to multiple network speeds and devices. After all, when watching videos from your phone, you won’t have access to the same internet speeds and bandwidth as on a PC.
That is why these providers must adapt their delivery chains to end-users’ capabilities and deliver content that won’t get interrupted all the time by buffering. OTT providers accomplish that through adaptive bitrate streaming. That means that the provided content’s quality will scale with the end-users’ internet speed and device capabilities. That allows these providers to ensure smooth, uninterrupted playback and optimal user experience.
Types of Content Suitable for OTT Delivery
Although we’ve been mostly talking about video content by now, OTT services encompass a much broader spectrum of media. There are multiple types of content suitable for OTT solutions:
Video
Video is by far the most common type of OTT media service. When talking about OTT, people usually refer to video. But even here, it’s important to mention that there are two types of over-the-top video:
- Video on Demand (VOD) — Most OTT platforms allow users to access pre-recorded videos (VODs) and stream them at will. Most video content on these platforms is of this type.
- Live Video — Some over-the-top platforms will also feature live broadcasts, such as various sports events or even live news. This type of content is rarer, but it’s been gaining prominence as of late, even in the OTT world.
Audio
The OTT audio market is also competitive, with OTT audio platforms like Spotify, various online radio stations, and podcast websites allowing users access to massive audio content libraries at the click of a button. These platforms let users stream audio content the same way platforms like Netflix do video (mobile apps, desktop browsers, etc.).
Messaging
Every internet-based messaging app that works around traditional mobile SMS networks falls under the OTT category. That includes apps like Facebook Messenger, Skype, Viber, WhatsApp, and similar.
VOIP
Voice calling applications and platforms that work via the internet also fall under the definition of OTT. Most of the instant-chat apps from above include voice calling features too, so they can also be classified under this category. Some of the most famous ones are apps like Skype, Viber, and WhatsApp.
Most Popular Types of OTT Devices
As mentioned, users can access OTT content from various devices. Here are some of the most notable ones:
Mobile Phones
The mobile video market has grown exponentially over the last few years, so these devices are one of the first you should consider when launching a streaming service.
On average, Internet users spend 38 hours a month watching videos on mobile apps. Not being able to reach these users can be detrimental to any OTT platform.
However, delivering OTT content to mobile phones is challenging since you’ll need to build an app for the most prominent devices on the market. Luckily, Android and iOS hold most of the global mobile market share, so you’ll only need to consider those two operating systems for your app.
If you need help launching an OTT app on Android and iOS devices, Brid.TV’s Android and iOS OTT solutions can help you. Get in touch and make a branded OTT app for Android and iOS devices today.
Desktop PCs
PCs are still the go-to device for many users, and the same goes for OTT viewers. That is why having an OTT website is a must for anyone looking to get into the market. That allows users to easily log into their accounts online and stream videos to their hearts’ content.
Smart TVs
Most modern smart TVs and connected TVs are compatible with some of the best OTT apps on the market, allowing users to enjoy their favorite OTT shows on a big screen. The biggest hurdle for publishers here will be building an OTT app for different TV operating systems. Still, with 65% of viewers consuming content on various mobile and TV apps nowadays, investing in these apps will offer excellent ROI.
Need help launching an OTT app on Samsung and LG smart TVs? Brid.TV’s WebOS and Tizen OTT solutions can help you. Get in touch, and start delivering your content to Samsung and LG smart TVs today.
Gaming Consoles
Contrary to popular opinion, gaming consoles aren’t only built for gaming — since they’re connected to the internet, they can also serve as OTT devices. That makes them an incredibly popular solution for consuming over-the-top content among gamers and younger generations. Distributing your OTT app across next-gen consoles like Sony Playstation 5 and Xbox Series X is an excellent way to boost your content’s reach.
Benefits of OTT for Video Publishers
As it’s undoubtedly clear by now, choosing OTT as your content distribution medium over more traditional methods like cable has plenty of advantages. Here are just a few reasons OTT can be an invaluable tool for any video publisher or streaming provider:
- Accessibility — Because over-the-top platforms are compatible with various devices and users only need internet access to enjoy their services, viewers can watch OTT content almost anywhere. With traditional TV, that is not the case.
- Ad-Free Content — While cable TV still predominantly relies on commercials to drive revenue, most OTT services use a subscription-based model. That means people can enjoy their favorite shows ad-free!
- Freedom of Choice — Traditional TV shows have a set broadcasting schedule, while OTT platforms give users the freedom to choose what they want to watch and when.
- Excellent Value/Price Ratio — Subscribing to an OTT streaming service gives users access to massive content libraries for modest prices. These libraries usually consist of thousands, if not tens of thousands of shows — something traditional TV will never be able to match.
- Access to Original and Exclusive Content — Most large platforms like Netflix and Disney+ began introducing original and exclusive content on their platforms. Subscribing to one of these services will give users access to these unique shows you wouldn’t find anywhere else.
All of the above benefits clearly show that traditional television is slowly becoming an outdated way of consuming media. But is that true?
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Is OTT Replacing Traditional TV?
The short answer to this question would be — yes, gradually. The long answer, though, requires some data analysis.
One of the first indicators that OTT is slowly replacing traditional TV is that cord-cutting is more prevalent than ever. There have been 39.3 million cord-cutters in the U.S. alone in 2019, while experts predict that number will grow to 55.1 million by 2022.
These numbers are nothing to scoff at, as they represent an exponentially growing trend threatening the TV industry.
Another critical factor to consider is that there are over 300 OTT service providers in the United States alone. That is a surefire indicator of the market’s competitiveness since everyone is trying to get a piece of that cake.
Consumer habits are also changing rapidly. More and more users consume content on their phones and other devices nowadays, so the increased accessibility over-the-top platforms provide is what attracts these types of consumers.
So can we say that OTT is replacing traditional TV? In a way, yes. Slowly but surely, OTT is becoming the new norm while TV viewerships are declining. But is TV going to disappear completely? Maybe. We cannot say for sure. Even if it does, one thing is certain — it will still take many more years before that happens. That is unless the TV industry makes some changes.
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What Lies in the Future of OTT?
The future of OTT is indeed bright. It has already become a part of our everyday lives. And with this rising demand for OTT streaming platforms like Netflix or Hulu and the growing dominance of the internet, we can safely say that OTT is the future of media consumption.
The world has already accepted OTT — that much is indisputable. The only question remaining is how traditional media can adapt to these changes.
How Can Your Business Adapt?
The easiest way would be to accept these changes and evolve. Many traditional media companies and broadcasting services are already entering the market to stay relevant. If you too worry about the future of your broadcasting business, you should build an OTT platform and enter the market sooner rather than later.
The best part about launching an OTT service is that it offers more flexibility than traditional cable or satellite TV. While most legacy media services rely solely on advertising as their main source of revenue, OTT monetization is much more versatile. Your options include subscription-based monetization, pay-per-view, or even ad-supported TV.
The OTT space lets you work with any video monetization model you feel most comfortable with.
How to Build an OTT Streaming Service to Enter the OTT Market
Launching an OTT streaming service from scratch can take a lot of time, money, and technical know-how. That’s why the easiest way to build a video streaming platform is to leverage one of the many OTT platforms that can help you launch, distribute, and monetize an OTT website and app.
Instead of coding everything yourself, you can use the existing technology these platforms provide to build an OTT app easily, integrate different OTT monetization models, and start your OTT broadcasting business.
If you need a solution to launch an OTT app across various devices, Brid.TV can help you. Publishers can use our Android, iOS, and tvOS SDKs to easily integrate our HTML5 player with their OTT apps across various devices like Roku, Android TV, Apple TV, or Samsung and LG smart TVs.
Our player is equipped with extensive ad support and advanced monetization options like video header bidding and ad podding, alongside other features integral to any OTT service like DRM content protection.
If you wish to launch an ad-supported OTT app with minimal hassle, get in touch with us, and start your OTT journey today.
FAQ
1. What Does OTT Mean?
OTT (over-the-top) represents any media streaming service that distributes content over the internet. OTT streaming offers users more control and flexibility than traditional cable or satellite TV.
2. What Is an OTT Platform?
An OTT platform is a media or content provider that offers live or on-demand streaming services across various devices and platforms. This term can also refer to various online video platforms providing white-label OTT solutions designed to help users build and launch a branded OTT streaming service.
3. What Is an OTT Provider?
An OTT provider allows users to stream live or on-demand video or audio content across the internet. OTT providers like Netflix and Hulu usually offer these services at a monthly subscription fee.
4. What Is OTT Streaming?
OTT streaming entails delivering live or on-demand video or audio content across the internet to various devices (e.g., mobile phones, OTT boxes, gaming consoles). Netflix and Disney+ are some of the most famous OTT streaming services.
5. What Is OTT in Media?
An OTT media service is a streaming service delivered directly over the internet. These services bypass traditional video delivery technologies like cable and satellite and offer greater flexibility to the end-user.
6. What Is OTT Video?
OTT video is any video content delivered across to internet to various OTT devices like gaming consoles, mobile phones, or OTT boxes. Users can consume OTT video live or on-demand.
7. What Is an OTT Device?
An OTT device is any device that can receive and stream over-the-top content. These devices include anything from desktop PCs and mobile phones to smart TVs, gaming consoles, and OTT boxes.
8. What Is an OTT App?
An OTT app is an application for streaming live or on-demand video content over the internet. OTT apps can be available across dozens of devices and operating systems, including various mobile phones and smart TVs.
9. What Is OTT TV?
OTT TV, or over-the-top television, represents all video content streamed on a TV that reaches the end-user over the internet. Users can watch this content while bypassing traditional delivery means like cable or satellite.
10. What Is an OTT Box?
OTT box is a device that uses the internet as a means to deliver video or audio content and broadcast it on your TV. These devices bypass traditional video delivery means like cable or satellite.
