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OTT 101

What is OTT? We’ll tell you everything you need to know

OTT 101

Chances are, OTT is a part of your life, even if you’ve never heard the phrase before. That’s because OTT has permeated the entertainment, sports, and news industries—it could even be the future of global media. So let’s get a handle on just what it is and how it works.

What is OTT?

OTT stands for over-the-top, and, while there are different interpretations, it describes content that is delivered to viewers via the internet to web, mobile, smart and connected TV devices, rather than traditional distribution models like broadcast, cable, or satellite TV. OTT services give viewers a way to consume content that was traditionally accessed via PayTV services.

How does OTT work?

Providers have content—either their own original content, or content they’ve licensed—and use an OTT service to distribute that content to viewers via standalone mobile apps, on smart TVs, or through OTT devices like Apple TV, Roku, or Amazon Fire stick.

A growing number of content creators retain the digital rights to their content for the growing market of cord-cutters and cord-nevers who require more flexibility in how and where they consume content. OTT services are emerging to meet the needs of these audiences. They also supplement traditional pay TV services, by delivering their content over-the-top to web, mobile, and connected TV platforms.

How do OTT services make money?

OTT services stream both live and on-demand content, which is either free to view or supported through one of several monetization methods. These models include ad-based video on demand (AVOD), subscription or transactional video on demand (SVOD/TVOD), pay per view (PPV), electronic sell through (EST), or rentals. 

AVOD and SVOD models are driving the majority of OTT monetization, with EST and rental options becoming less and less common, left to the likes of iTunes and Amazon Prime. Strong interest continues in the SVOD models like Netflix, where viewers pay a regular subscription fee to access an entire content library. More and more OTT services are presenting a hybrid free/AVOD & SVOD model, where there is some content that lives outside of the paywall and is free or ad-supported. The rest of the content requires a subscription to access and once subscribed, viewers can view content without the ads.

Is OTT changing the media landscape?

In short, yes—but OTT continues to evolve on its way to mass adoption among consumers. Global OTT revenues are projected to hit $129B by 2023 according to Digital TV research. We conducted research in Asia, a major market for OTT, to see this shift in action.

What does it take to launch an OTT service?

It’s never been easier to stand up a new OTT service. Many of the leading online video platforms offer turnkey OTT solutions today, which allow content providers to quickly enter the market and reduce their total cost of ownership.

Mongolia’s first OTT service launched in just a few weeks, without any technical staff involved, and quickly grew their audience month over month. Traditional multimedia companies are also jumping on the OTT bandwagon, as Brightcove has recently launched services with regional broadcasters such as Quebecor Media, i24 News, and La Xarxa.

Want to know more? Stay tuned—we’ll be posting on OTT best practices soon.

Ready to go OTT?