What is OTT?

Cable is dead? Not quite, but the way we distribute and receive video has absolutely changed. Understanding how is crucial to your success.

One term that you might see is "OTT" or "over-the-top."

What is OTT?

OTT or "over-the-top" refers to video content that is transmitted "over" the cable box. I.e., it is content that bypasses cable subscription and is distributed entirely over the internet.

Many people purchase OTT content without knowing what the term actually means. A classic example of an OTT provider is, of course, Netflix, which started the "streaming service" revolution.

Many users now avoid paying for a cable subscription and, instead, purchase various OTT services, a practice colloquially referred to as "cord cutting."

OTT content is typically available on demand, and is often released in batches. It should not, however, be confused with typical video on demand that you might purchase from a cable provider. Some confusion also occurs between OTT and IPTV, which is otherwise called "digital cable." Most cable these days is provided digitally and fiber optic service providers use IPTV, but it still requires a subscription and a cable box (typically combined with a digital video recorder) to access.

It also includes peer to peer video sharing services such as YouTube. The term OTT may also be used to refer to internet messaging services that bypass SMS and to internet-based phone services or VOIP. Finally, it includes private content that might be streamed to, say, an office conference room, including a lot of video training.

However, when most people think of OTT, they think of streaming television that sends online video directly to connected devices.

How does OTT Work?

Content can be streamed to a variety of devices, including desktop and laptop computers, smart TVs, some gaming consoles including Playstations, and mobile devices including smartphones.

One way to access content is also to purchase a video streaming "box" such as Roku, Fire TV, or Apple TV. These boxes connect to a regular television via HDMI and are typically purchased by customers who don't want to upgrade their regular television and have no other device that can handle streaming. They allow access to multiple streaming platforms.

On desktop computers, content can be accessed either via an OTT app or through a web browser, while mobile devices generally require some kind of app, which are available for Android and iOS devices.

The streaming media content is transmitted over the internet. Some providers require that the entire content download before it starts playing, but most will start playing the content as soon as a certain buffer is loaded. OTT content can also include live streaming of concerts, sporting events, etc. This requires real-time streaming that can be very dependent on connection speed.

Because of this, OTT typically requires a broadband internet connection, although 5G phones can often produce enough bandwidth. Some public or customer wifi nodes may block OTT content in order to preserve bandwidth.

Most OTT streaming services require a monthly or annual subscription fee from users, but some are wholly or partially ad-supported. This allows lower pricing or free tiers, where people pay less.

How is OTT Content Regulated?

OTT content is not regulated in the same way as cable TV. Cable and broadcast television has traditionally been regulated and censored by organizations such as the FCC in the U.S. and Ofcom in the U.K.

This has historically meant that streaming services are more able to present controversial content. Moves have been made to bring larger streaming providers under the same rule as cable. The OTT platforms argue that doing so would reduce their ability to take risks on niche content.

Additionally, in the U.S., streaming providers do not pay the same taxes as cable TV companies. Local governments have been trying to change this, but providers are fighting back.

This is a changing environment, and as of right now there are few rules about what you can post on your own website.

What Types of Content are Distributed Through Streaming?

OTT content varies dramatically, from major sporting events to extremely niche content that would not be worth broadcasting, such as obscure historical documentaries.

As OTT also includes peer to peer services such as YouTube and Tiktok, there is very little control over the types of content that might be found and users have to apply their own judgment.

Video advertisements are also a type of OTT content. Content delivery through these systems generally allows consumers to run videos whenever they want, and gives them a lot of control over the content they receive.

What Impact Does OTT Have on Video Producers?

The greatest impact of the rise of OTT technology is that companies no longer have to rely on a distributor to get their content out there. While much video goes out over streaming platforms such as HBO, Hulu and Prime Video, everyone has access to OTT to some degree.

You can embed videos on your own site or post them to YouTube and then embed. Many small companies choose to use YouTube because it can increase visibility and, in some cases, allow for monetization opportunities. However, platforms such as YouTube can censor or demonetize videos that they don't approve of. This is a particular problem for those selling products aimed at younger children, as there have been crackdowns on advertising aimed at kids, rather than parents.

However, the fact remains that video delivery directly over the internet, while it has a barrier to entry in terms of storage space and bandwidth, makes it much easier to get your content out there. This covers both TV content and advertisements. Ad-supported streaming platforms are also another opportunity for companies to engage in paid advertising. This can result in better targeting than live TV, as ads can be displayed with specific shows whenever the person chooses to watch them.

The on-demand nature of OTT also means that there are no "slots of death" in the schedule, although release timing can definitely impact how a show is received.

Another major advantage is that OTT video content can be embedded with text-based and image content, making it part of an overall content strategy for your company.

What Should Video Providers Think of Going Forward?

First of all, the current balkanization of streaming services is starting to lead to customer fatigue; many customers are tired of having to potentially buy four or five subscriptions to get all of the shows they want.

For advertisers, this means looking carefully at subscriber numbers.

For people providing content directly, however, improvements in technology are going to make it even easier to get your content delivered to end users. While 5G mobile phones are currently a luxury, in a few years they will become the standard and most people will have them. 5G bandwidth allows the delivery of high quality content to cellphones and 5G-enabled tablets. This will increase the ability of people to stream video while on the go, and the possibility of location-based video advertising.

However, regulations are likely to tighten in the next few years as various governments seek to protect people, especially children, from harmful content. This likely means that streaming providers will be obligated to place age warnings on material aimed for adults. Disney Plus already allows parents to create special kids profiles that only allow age appropriate content to be streamed, and also offer a simplified user experience.

But for all companies, providing video content is going to become more and more expected. Customers will wonder where it is if you don't have it. OTT technology has led to the normalization of video as part of a content strategy.

If you are looking for ways to stream video to your customers and to leverage the OTT revolution, JW Player can help.