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What is OTT and why is it taking over the industry?

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What is OTT and why is it taking over the industry?

Over-the-top or OTT media is not new. It has been around for almost 10 years, but it’s likely the majority of people have never heard of the term or concept. On the other hand, I would bet many of us have known people who in the last 5 years or so, have decided to “cut the cord” or get rid of their cable subscription to save money.

Speaking of cutting the cord, according to nocable.org, in 2018, the number of households without pay-TV services was 36 million. Today, that number is up to 44.3 million.

What exactly is OTT?

“Over-the-top” or OTT is a term used for the delivery of TV content, movies, and other streaming media via the internet. In other words, the viewer or consumer bypasses the cable box or satellite altogether and goes ‘over the cable box’ or “over the top”, hence the term OTT.

What are some examples of OTT?

Some examples of OTT services include Netflix, YouTube, Hulu, AmazonPrime, SlingTV, Crackle, iTunes, Vimeo, DirectTVNow, Playstation Vue, and others. Netflix is what many call the “Big Dog”.

Like many of the other “over-the-top” services, Netflix has its own app and website where users or viewers access the content. In 2017, 54% of adults used Netflix. In 2019, 70% of Americans had at least one subscription to an OTT.

These services, like Netflix and others, offer viewers not only quality at high-value, but often original content at a low cost with great flexibility and compatibility. After all, using Netflix allows so much flexibility under one roof.

For example: In one home, one person can watch a romantic comedy on a Smart TV in the living room, while another watches a football game on an iPad, while at the same time another member of the family watches a children’s show on his/her tablet. OTT is about multiple devices, multiple shows – media access anytime, and anywhere. The possibilities are endless.

Besides flexibility in viewing, OTT also offers flexibility in payment of services.

OTT has 3 Revenue Models

The 3 types of revenue models are:

  1. SVOD or subscription-based services (ie. Netflix, Hulu)
  2. AVOD or Ad-supported services (ie. YouTube, Crackle)
  3. TVOD or Transactional services (ie. iTunes, Vimeo, AmazonPrime)

With these 3 types of revenue models, viewers are allowed a variety of choices – paid services (SVOD), free services, but with ads (AVOD) or paid specific or select services (TVOD). These 3 types of revenue models provide consumers freedom of choice.

Along with flexibility in viewing and revenue models, OTT providers are changing the world in which people view media through a variety of platforms. The viewing platforms are constantly evolving to give each viewer or user the best experience possible with access anywhere and anytime. Don’t have a SmartTV? No problem. You can get an add-on device like Roku or Amazon Firestick to access services. Don’t have a TV? No problem. You can use your tablet, phone, laptop/computer, or a digital media player like Xbox to access services.

So whether you are using a SmartTV, an add-on like Roku, or your Xbox the OTT providers offer a variety of platforms for viewers. Regardless of what device you have, OTT is there for you – anywhere, anytime.

The Evolution of OTT

What’s the real evolution of “over-the-top” or OTT?

Well, back in the ’80s and ’90s, most consumers probably remember renting videos from Blockbuster and watching movies using your VHS players, in addition to watching TV and cable shows on Comcast, Direct TV, or through some other cable or satellite provider.

But by the end of the 1990s, Blockbuster wasn’t doing so hot.  Then, Netflix came along and gave viewers the choice of not having to leave their house with a service in which DVDs were mailed directly to the consumers.

Then, in 2000, the CEO of Netflix offered up his company to Blockbuster which resulted in an epic mistake by Blockbuster. They said ‘no deal’. Talk about a HUGE Mistake.

A star was born.

A few years later in 2007, Blockbuster was bust, but Netflix took off like a bolt of lighting! Netflix started to offer video on demand via streaming. OTT, a star was born.

By 2019, 182 million people in the US had at least one OTT subscription.

OTT is about flexibility, accessibility, and freedom of choice for the consumer. It’s about using multiple devices. It’s is about media streaming – anytime and anywhere. OTT is becoming the king of media.

OTT is about streaming – anytime, anywhere!

Today, 235 million Americans consume content from over 820 million digital devices whether it’s through OTT providers like Netflix, Amazon Prime, Hulu, AppleTV, Disney Plus, HBO Now, Peacock, iTunes, YouTube, Vimeo, and a boatload of others.

In fact, would you believe, last year 19 % of the time consumers spent watching TV, they were “streaming” or using “over-the-top” services?

Where is OTT headed? 

OTT has plenty of room for growth! The sky is the limit!

Just stop and think for a couple of seconds about the current average situation and TV viewing conditions.

Let’s say, you’re a current subscriber of Comcast with a basic plan that includes news (ie. Fox News, CNN), broadcast networks (ie. ABC, CBS, NBC, Fox), specialty channels (ie. Discovery, MTV, Food Network), and superstations (ie. TNT, WGN, TBS). My guess is you’re probably paying $70-$100/month minimum. But you’re probably only watching a fraction of the stations you pay for with your current cable bundle or package. Why not ask yourself, “Shouldn’t I have more options for viewing and payment?”

Isn’t that why most viewers “cut the cord” in the first place? Isn’t that why consumers chose OTT services like Sling TV in the first place, because they wanted cheaper, smaller bundles?

OTT not only offers cheaper and smaller bundles but the freedom of choice for consumers. They want their favorite shows or movies when they want them and where they want them and how they want them.

Consumers want the freedom to choose. OTT offers just that – whether you have a TV, computer, or Xbox. OTT provides you with the media when, where, and how you want it.

How might OTT look in the future?

Think of “over-the-top” platforms like Netflix, Amazon, Hulu, YouTube, iTunes, Vimeo. What if you were given a choice of specific or select shows? Wouldn’t it be nice to just pay for your favorite shows through like Outlander (Starz) and Marvelous Mrs. Maisel (AmazonPrime) and Lucifer or Tiger King (Netflix) or Game of Thrones (HBO)?

Wouldn’t it be nice to select your apps for specific shows from multiple platforms regardless if you watch the shows on your TV, phone, or tablet? In fact, each consumer in the same household could have different apps on their different media devices (TV, computer, tablet, or gaming console) and to allow specific or selected viewing options to meet each consumer’s needs.

Why should people who break into showbiz pay attention?

Are you serious? Do you want to be kept in the dark? Talk about being back in time!

Back in the old days, in the ’60s,  if you were trying to make it in showbiz your only choice was to go through one of the big three broadcast networks – ABC, CBS, NBC in order to get your programming nationwide exposure. Unless of course, you were one of the few and far between, who had connections to “make it big”.

Today, anyone can be a star at any moment in time, that is of course if you are aware of OTT and the multiple services offered to a wide array of viewers. Services like SVOD (Netflix, Amazon, Hulu), AVOD (Crackle, YouTube), and TVOD (iTunes, Vimeo) provide viewers with multiple media choices for quality content.

However, if your content is accessible ONLY on one TV channel and only through cable, how will all those viewers or consumers who have already “cut the cord” and gone to “over-the-top” services find your content?

Let’s face it! “Watching TV” has been redefined with OTT. It’s now about watching media over multiple portable devices – anytime, anywhere. It’s more about portable or mobile devices than it is about TV itself. It’s now more about the content delivered through the internet and viewed over portable devices.

OTT is a wide array of net-based, mobile communications services available via an app. Whether that app is available on your phone, tablet, or TV, viewers want to be able to access it anytime and anyplace.

Anyone breaking into show business should understand this evolution of TV and media. Because now more than ever “Watching TV” has a whole new meaning to a whole new world of viewers.

With over 500 OTT services globally available, those that want to get a “leg up” in show business will need to have their content available on multiple digital platforms. With the internet, media is unlimited.

In fact, those who want to get into showbiz and understand OTT and the evolution of media today, it can all be summed up by one line:

“The World is Yours!” – Tony Montana (Al Pacino in “Scarface”)

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