OTT stands for Over-The-Top and this name came about historically to refer to streaming media (audio and video) over the internet connection provided by cable providers – i.e., video over the internet in addition to cable television provided by the same cable operator.
In the US, cable companies like AT&T and Comcast deliver traditional linear TV content via cable to the households and also provide internet access via the same cable. So you have a single cable that provides the customer with television service and internet.
Thus, the acronym OTT came to refer to the access of television or video programming via that internet connection provided “on top” of the cable connection.
Weird way to name one of the largest industries in the world, but, hey, the name stuck.
For a variety of reasons, the OTT industry witnessed explosive growth and now, everyone wants a slice of of the OTT pie!
What Falls Under the OTT Umbrella?
This is probably not a comprehensive list, but, when one talks about OTT, it includes :-
- streaming video on websites or apps like Netflix, Hulu, YouTube, DAZN, Sky Sports, etc.
- using internet-connected devices like TVs (smart TVs) or devices like the Amazon Fire TV stick, Google Chromecast, or the insanely popular Roku streaming device.
- watching live TV using internet streaming: Popular examples are DirecTV, Sling TV, Hotstar (in India), and the list just goes on.
I am restricting this list to video consumption, but, one could talk about Spotify (and the likes) that deliver audio/music as being part of the OTT landscape as well.
Why Is OTT So Popular?
OTT’s popularity in my opinion comes down to one thing – convenience of being able to access your media (songs, movies, shows, podcasts, etc.) – anytime, anywhere, and on any device.
With traditional cable television, you had to be in front of your television at a particular time and place to be able to catch your favorite show. And you were always restricted by the need to have a physical cable connection to your TV.
However, with OTT, you could be at the mall, or in a bus, or sitting at the dentist’s clinic and as long as you had a stable internet connection, you could watch your show on any device and at anytime.
It is precisely this freedom that caught the interest of the public and has lead to the likes of Netflix, Hulu, HBO, DAZN, YouTube, TikTok, Vimeo, etc. becoming insanely popular.
OTT has also given rise to several companies building technologies that directly feed the process of delivering video to customers. You have several companies that specialize in encoding, streaming (packaging, CDNs, multi-CDN routing, DRM, storage), playback technologies, ad insertion, video analytics, AI-based recommendation engines, and the list just goes on.
Most traditional linear TV channels are being forced to rethink their strategies and launch OTT channels (however, I am not sure that these are making money yet – more about this conundrum in a different article)
Will OTT Replace Linear TV?
OTT is extremely popular and surveys clearly indicate that millennials associate with OTT services as “TV” rather than traditional television (linear). Here are some statistics from Comcast: in Q4 2019, they lost 133K Residential Pay-TV Subs, and Gained 424K Broadband Subs. And this is just from Comcast – the pattern is the same across the board.
But, OTT comes with its own set of problems – like the cost of internet and the lack of high-speed broadband “everywhere”, technical issues like start-up delays (a.k.a latency or join-time), buffering, and a fractured subscription landscape where every provider is trying to lower their prices and gather as many subscribers as possible.
There is a long way to go, but, make no mistakes about it – OTT is here to stay and rule! If you aren’t on the bandwagon already, it’s time to purchase a ticket, hop on, and enjoy the OTT ride!