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What Is OTT and How It Is Changing the Modern Media Landscape

what is ott

The number of cord-cutters worldwide is growing by the year. People are readily switching from traditional cable TV to various streaming services for better content accessibility. As of June 2020, nearly 70 million households use OTT services in the U.S. alone! But what is this new media distribution phenomenon? What is OTT exactly, and why is it so popular? If you are unfamiliar with this growing global trend, you’re in the right place. The former are just some of the questions we are going to address in this article. But let’s start with the basics…

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 these solutions, the user is the one who controls what they consume, not the provider.

These solutions proved more practical and flexible than traditional TV since people can access most of them through various devices, not just the TV. Aside from being able to access OTT services from PCs, mobile OTT apps, and tablets, there are many dedicated OTT devices to choose from too. Some of these include gaming consoles, Smart TVs, Apple TVs, Chromecast, OTT TV 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 OTT video has risen considerably over the last few years. 

graph illustrating the average time spent watching ott content in the u.s.

This sudden growth in popularity just comes to show how vital control and flexibility are for consumers. Where traditional TV lacked, OTT prevailed.

Difference Between OTT and Video

Before moving on, we must address the elephant in the room — what is the difference between OTT and video? They seem similar, don’t they? You’re right, they do, but there is a small but crucial difference.

  • Video is content that users can stream over various devices like TVs, PCs, mobile phones, and even OTT devices.
  • OTT is content that OTT providers like Bing Network, Netflix, Sling TV, and others make available for streaming on various devices.

Although it may not be so obvious, there is a slight difference between the above two definitions — OTT content is provided by a service provider and usually requires subscription-based payments for access. At the same time, video is an umbrella term for content streamed over the web. So yeah, while online video can often be freely accessed over the web, OTT services come with a fee.

How Is OTT 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 when delivering video content across the web 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 OTT providers must adapt their delivery chains to end-users’ capabilities and deliver content that won’t get interrupted all the time by buffering. They accomplish that through adaptive bitrate streaming. That means that the delivered content’s quality will scale with the end-users internet speed and device capabilities. That way, OTT providers ensure smooth and uninterrupted playback and optimal user experience.

However, for all of the above to occur, the users must have a compatible hardware device.

OTT-Compatible Hardware Devices

As we have already mentioned, users can access OTT content from a wide variety of devices. Here are some of the most notable ones:

  • Mobile Devices — Most OTT streaming platforms have dedicated mobile apps for tablet and smartphone users to access their services.
  • Computers — Users can access most OTT services through desktop web browsers or dedicated PC apps.
  • Smart TVs — Most recent Smart TVs let users download various OTT apps they can use to access these services seamlessly.
  • Digital Media Players — Various third-party devices allow users to access OTT services. Some of these are devices like Apple TV or various gaming consoles.

As you can see, there is a wide variety of devices that support OTT services. The accessibility that brings with it is the primary reason these services are getting such a massive edge on traditional TV.

What Services Can Be OTT?

video audio messaging voip icons

Although we’ve been mostly talking about video content today, OTT services encompass a much broader spectrum of media. There are multiple types of content suitable for OTT solutions:

Video

As you could have guessed by now, video is the most common type of OTT media service. When talking about OTT, people usually refer to video. However, even here, it’s vital to note that there are two types of OTT 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 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.

Netflix, Amazon Prime, Hulu, Disney+, and similar are some of the most famous OTT video platforms on the market currently.

Audio

The OTT audio market is also a competitive one nowadays, with 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.

Benefits of OTT Over Cable TV

As you have probably guessed from our introduction, OTT has plenty of advantages over cable TV. But what are these benefits exactly? Why would you consider cutting the cord and subscribing to one of these platforms instead? There are many reasons, but here are some of the most notable ones:

  • Accessibility — Because OTT platforms are compatible with various devices and the only thing users need to enjoy their services is internet access, viewers can enjoy content from 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 OTT 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 paint a clear picture that traditional television is slowly becoming an outdated way of consuming media. But is that true? 

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 up to 55.1 million by 2022.

graph illustrating the number of cord-cutters in the u.s.

These numbers are nothing to scoff at, as they represent an exponentially growing trend that’s threatening the TV industry. And if you’re still doubtful of the OTT market’s dominance, there are more than 300 OTT service providers in the United States alone. That should be enough to show just how competitive the market is since everyone is trying to compete for a place in it.

Another thing to consider is that the majority of OTT consumers are Gen Z and Millenials. Considering that the younger generations lead more active lives and are often on the go, the increased accessibility OTT platforms provide is what attracts these types of consumers to their services over traditional TV. And as more younger generations appear, the primary audiences of these services will grow.

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.

What Lies in the Future of OTT?

The future of OTT is indeed bright. It has already become a part of our everyday lives. Whether we are using video streaming platforms like Netflix or Hulu or jamming to our favorite tracks on Spotify, we are actively contributing to the industry’s rise. And with the growing dominance of the internet in today’s global landscape, 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 that remains is how the traditional media will adapt to these changes. We’ll have to wait and see.

Do you want to start growing your business with OTT? You’ll need to find the right OTT platform first!

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