What is OTT (Over-The-Top)

 

 and How Does it Relate to Apps?

OTT is basically the tech version of OTC (over-the-counter) medication. 

Traditionally, a business providing media or telecommunications services would charge a subscription price for their bundle of products, prescribing what products and services you receive. 

Today, the metaphorical media pharmacy is being opened up à la carte style for customers to pick and choose which products and services they wish to pay for.

This is where OTT comes in. Let’s discuss what OTT means, examples of OTT apps, and the bright future for mobile apps that take advantage of the OTT economy. 

What Is OTT? 

OTT (over-the-top) initially referred to services that went “over” the heads of cable providers, specifically streaming services. The term OTT has since been applied to many other products and services that stream content to users using the internet as a replacement for pre-existing infrastructure.  

Some OTT apps use the internet as an alternative to cellular service, cable television, and financial services. We like to think of OTT as fitting into three distinct buckets:

1. OTT Services

Services that were traditionally managed offline, using tangible and even physical materials, are being disrupted by apps that are going over the top. 

Historically, if you wanted to buy a share of stock, your stockbroker would need to be physically present at the exchange to shout the number of shares and price they were willing to buy or sell. A counterparty would accept if the price was right.

Today, stock and bonds are purchased online and confirmed nearly instantly —  surpassing the traditional model and simultaneously saving the vocal cords of countless traders.

Hailing a taxi is another example of how mobile OTT apps have disrupted the traditional model. Once upon a time, you had to physically hail a taxi to fetch a ride. Today, ride-sharing apps have removed this step and in doing so, disrupted the private transportation industry. 

2. Content and Message Delivery OTT Apps

OTT has certainly had its impact on the businesses for which the term was first coined — cable providers. 

Streaming services such as Hulu, YouTube TV, and Netflix have been responsible for millions of people “cutting the cord,” circumventing the need to pay cable providers for content delivery. These are sometimes referred to as VOD (video on demand), but more on that later.

Other OTT apps use the internet as a method to connect phone calls and send MMS and SMS messages. For example, text messages have traditionally been sent using cellular service but today, iMessage, WhatsApp, and others allow users to send messages whenever the device is connected to the internet. 

3. OTT Devices

Our devices enable the emergence of more over-the-top technologies. Devices such as the Roku, Chromecast, and Fire Stick allow customers to play their favorite streaming content on their TVs. 

As IoT devices enter the home, an increasing number of industries are being disrupted by OTT devices. Consider your electricity for a second — where does it come from? The utility company, of course. But if you install solar panels, you can generate your own electricity and circumvent the need for the electrical grid. 

One could argue that solar panels are the most literal form of OTT since they are installed over the top of your house. 😎

Benefits of OTT Apps

OTT apps are beneficial to businesses and consumers alike. For example, OTT apps typically offer many more options for payment structures and advertising strategies compared to traditional business models. 

Services such as FuboTV can license the rights to live sporting events from the networks that have built out the broadcasting infrastructure, saving FuboTV the investment in the equipment and resources necessary to broadcast live sports. 

1. Highly Targeted Advertising

Demand-side platforms (DSP) transformed the programmatic advertising world by offering a way to match ads with the right users more effectively. OTT brings these tools to more channels and platforms that historically could not target or track engagement.  

In the past, television advertisers could never really be sure how many people viewed one of their ads or if any further action was taken because of the ad. OTT products offer advertisers the ability to target ads and track the response from various segments more effectively. 

2. Customer Segmentation

OTT apps offer marketers the ability to segment customers more precisely, including live user segmentation. Let’s use podcasting as an example. 

In the past, radio towers emanated frequencies essentially into the ether — with little to no understanding of who was listening. Today, podcast apps offer audience insights including geography, device types, episode retention, and more.    

3. Increased Efficiency

Apps built to bypass the incumbents usually do so because they are able to leverage modern technologies at a better price. As Moore’s Law1 continues to drive the price of computation down, the comparative advantage of OTT apps becomes even more evident. 

From a consumer’s point of view, paying for a bundle of TV channels that goes mostly unwatched is unnecessary and inefficient. Instead, pay for the channels you want to watch. 

OTT vs. VOD 

VOD, as we touched on earlier, is video on demand. But sometimes these VOD services require a cable package subscription in order to view the content. This is where the line between VOD and OTT is drawn. 

OTT apps, like Netflix or Hulu, can serve video content over the internet on demand. But in order to use a VOD service like HBO GO, you must authenticate your TV provider subscription.2

OTT is systematically opposed to this model of slapping a separate paywall on your content. Paying a cable provider to watch content online is like paying a labor union to do the work automation has streamlined.

When containerization was transforming the shipping industry, the labor unions fought to keep their workers employed. To do this, they would physically unpack and repack containers, an inherently inefficient role. 

Imagine you go to buy a share of AAPL (that’s Apple’s ticker symbol) on the Robinhood app, but first, someone has to run down to the NASDAQ, shout your buy order, and wait for a sell-side before your app updated with confirmation — this would be inefficient. 

Video on demand can be broken down even further into a few categories based around their business model:

• AVOD: Advertising video on demand is an ad-supported service that is free for users to watch, with the caveat being they must watch advertisements. (think YouTube).
• SVOD: Subscription video on demand is a service that provides access to video content with a regularly recurring fee structure. (ie. Netflix).
• TVOD: Transactional video on demand is similar to a pay-per-view model. (ie. Amazon Prime Video)

How OTT Impacts Mobile Marketing

Marketers must understand OTT enough to see that their ecosystem is changing rapidly. 

The strategies and channels that worked last year may not work next year, and the strategies that work next year may not exist this year. What won’t change is humanity’s gravitation towards low-cost convenience, which is where OTT is the most disruptive. 

What are Over the Top Services?

Let’s start simple. Over the Top (OTT) services refer to any type of video or streaming media that provides a viewer access to movies or TV shows by sending the media directly through the internet. Some of the most popular OTT providers include Netflix, Amazon Prime Video, and Hulu. 

Basically, Over the Top services use an internet connection to play TV shows and movies. Most OTT providers have their own app, website, or page of some kind where a user can log in to access the content available with the subscription.  

OTT services offer a variety of attractive pros that viewers like yourself may not know. So, we made a list of the 5 top things you need to know to understand Over the Top services like a pro.

1. Over the Top Services are HUGELY POPULAR

The first thing that’s a “need to know” is that OTT services are quickly becoming one of the most popular ways to consume video media. Of all the OTT service providers, Netflix is the Big Dog in the arena, and we aren’t joking when we say that they are literally changing the way that the world views TV and video. 

What does this mean, you ask? For viewers, it means that the possible viewing platforms are constantly changing and evolving to provide the best possible user experience. More shows, more availability, and access to your content anywhere you go sounds like a pretty good deal. (Especially when a Netflix subscription only costs about $12 a month.)

People all over the world subscribe to Netflix and other service providers to take advantage of the convenience that OTT has to offer.

 

Survey data from 2017 showed that 54% of U.S. adults used Netflix.

Leichtman Research

To make that number even more impressive, there are 785 million users that subscribe to an OTT provider (such as Netflix, Hulu, or Amazon Prime Video) worldwide.

2. OTT Requires an Internet Connection

Before you  jump on the bandwagon, you need to know that over the top services require an internet connection. If you want to have a successful viewing experience that isn’t disrupted by constant buffering, we suggest you have at least a 25mbps stream.

If you’re not sure of your current connection speed, or if you don’t know what connection speed means, read this post.

A 25mbps bandwidth connection typically only supports one over-the-top stream and one or two smartphones, if the connection is having a good day. The lowest speed that we offer is 25mbps because we understand that most households like to stream with two or more devices while perusing the internet, playing games, or scrolling through Facebook. Doing all of these things simultaneously requires a faster connection.

3. No. More. Commercials.

Yep. That’s right. With an OTT stream, you can watch your favorite shows on Netflix or Amazon Prime Video without commercials. Part of what makes subscriptions like Netflix so popular is their lack of commercials, saving viewers from show interruptions and time wasted watching commercials instead of the actual show.

Cordcutting.com says that Netflix saved each of its subscribers from
160 HOURS of commercials on average in 2017.

Now, before you get too excited, streaming services like Netflix don’t offer the recent cable TV shows. Other streaming services like Hulu offer the most recent episode and season of current cable TV shows. However, these shows still have commercials unless you purchase the premium subscription. 

Unlike traditional cable or IPTV, Hulu typically selects commercials based on your viewing history, or in some cases allows you to pick the brand for the commercials that you’ll view during the show.

4. OTT Doesn't have to be Either-Or

You don’t need to limit your subscription to only one service provider. Many households subscribe to Netflix, Hulu, and Amazon Prime together for a few different reasons.

Because OTT subscriptions are so affordable, users are able to spend the $12 on Netflix and $8 on Hulu a month and get access to an enormous library of commercial-free shows and recently-aired cable shows. Users also like to subscribe to Amazon Prime, which provides access to another huge video library, free two-day shipping on Prime products, and a plethora of other benefits.

Plus, many households subscribe to one or multiple OTT providers in addition to their monthly cable plans to have access to huge video libraries and still keep up with live TV.

5. There are Multiple ways you can Access OTT Services

If you want to add OTT to your home, there are several options to choose from.

Get a Smart TV

A flat screen TV or a smart TV used to be extremely expensive and not affordable for most households. Now, consumers can easily find 30″ or 40″ Smart TVs for less than $250. Also, most of the Smart TVs on the market come with Netflix, Hulu, and Prime Video apps pre-installed.

Get an Add-On Device for Your Current TV

Just purchased a new TV that wasn’t a smart TV? Don’t worry. Add-on devices like Roku, Chromecast Stick or Amazon’s Fire TV Stick cost around $30 to $50. These allow users to plug the device into a TV’s HDMI port and access an “app” screen on their TV’s corresponding HDMI channel.

Then, you can log into any of your subscription apps directly on the screen and access any of your services on your TV.

Does none of that sound appealing to you? 

Well, you could purchase an HDMI cable, which usually costs between $5 and $10. Pull up the OTT service provider’s site and connect your computer to the TV using the cable to stream your shows.

Use your Laptop/Computer/Tablet/Device

If you don’t want to worry about any of the previously mentioned ways to access your OTT service, you can pull up the provider’s website. Using a tablet, laptop, computer, smart phone, or any other type of electronic computer device, you can watch your shows directly on that device. 

WHAT IS OTT AND HOW DOES IT WORK?

April 16, 2021

By Jake Kelly

OTT (Over-the-Top) Video Consumption Is Higher Than Ever

The way people around the world today consume their TV shows and movie content varies greatly from what we saw 20 years ago. In the past, viewers watched TV by “appointment viewing,” where families huddled around their TV at the same time each week to watch their favorite sitcoms and shows.

What we see today is still similar in terms of what we are watching, however, we have seen a major shift in the viewing habits and how we are watching. Today, nearly 520 million United States consumers are watching OTT (over-the-top) video:

Source: Statista

What Is OTT Video?

OTT is an acronym for over-the-top. OTT is the delivery of TV and movie content to anyone who has access to the internet by going “over the top” of broadcast television. In layman’s terms, this means watching television content:

• Anytime – When it’s most convenient for the viewer, not necessarily when an episode premiers
• Anywhere – In homes, cars, hotels, etc.
• On any device – Smart TVs, phones, tablets, gaming consoles, computers, Chromecast, Amazon Fire Stick, Roku, and more
• On any streaming service or TV network app – Streaming services such as Sling and Tubi, and streaming apps like HGTV, NBC, Trvl, TLC, FOX, FOX Sports, A&E, Discovery Channel, and more

If you’ve ever watched live sports on your FOX Sports app on your smart TV, enjoyed a DIY show on the HGTV app on your tablet, or caught up on your favorite TV show in a hotel on a work trip (or anything similar), you have viewed OTT video.

OTT VS. CTV, WHAT’S THE DIFFERENCE?

It is important to recognize the difference between OTT and CTV—Connected TV.

CTV is defined as any device that can connect to a TV or smart TV that facilitates the delivery of streaming video content via the internet. For example, gaming consoles such as Xbox and PlayStation, Roku, Amazon Fire Stick, Apple TV, and many more.

There’s one big difference between OTT and CTV:

• OTT – The process of watching content via internet stream (physically watching video content)
• CTV – The device used to consume your OTT content

The Rise of OTT Video: Why Are Consumers Cutting Cords?

As we mentioned earlier, OTT has grown a lot in recent years as people have been deciding to move away from broadcast television—you know these as “cord-cutters.” There are a few reasons why OTT is becoming more popular as time progresses.

OTT PROVIDES MORE CHOICES THAN BROADCAST TELEVISION

OTT gives viewers a personal choice. Viewers choose what streaming services they want to subscribe to, rather than being locked into the specific channels and contracts they receive from their broadcast TV providers.

VIEW OTT CONTENT ON ANY DEVICE, FROM ANYWHERE

With OTT, viewers have the convenience to stream their preferred content on any device, at any time—on their iPad while lying in bed, on their smart TV, their gaming console in their man cave, or even on their phone while commuting to work on the subway.

VIEW OTT CONTENT AT ANY TIME

Your favorite TV show is Grey’s Anatomy, but you’re busy picking up your kids from baseball practice every Thursday at 8 pm ET. Well, with OTT content, viewers have the ability to consume their favorite shows any time they want, instead of having to be locked into watching during the one-time slot per week the show airs on broadcast television.

So, What Does This Mean for Advertisers?

OTT ADVERTISING PROVIDES MANY BENEFITS CABLE TV CANNOT

OTT advertising brings many benefits to the table for advertisers looking to build and grow their brand that cable TV can not—mainly, hyper-specific audience targeting.

For local businesses and other advertisers investing in broadcast television, their commercials are served to a very broad audience, which doesn’t always translate into their target audience actually viewing their ads.

That’s not the case with OTT advertising.

OTT Advertising Benefits

BETTER AUDIENCE TARGETING THAN CABLE TV

OTT advertising allows advertisers to build a custom, hyper-specific audience based on behavioral and contextual demographics. As a local business, this is critical to your advertising success. Is your ideal customer a homeowner living in a 10+-year-old home, with a household income of greater than $100,000, living in a specific ZIP code? Well, you can target these homeowners directly with OTT advertising.

Put simply, OTT advertising gives companies the power to target their ideal customers just before they are aware they need your products or services. TV commercials instead serve your ads to potentially millions of unqualified viewers.

GUARANTEED AD VIEWERSHIP

People watching OTT content are unable to skip ads, close their browser window, install an ad blocker, or simply change the channel. This gives OTT advertisers a huge advantage over those investing in broadcast television, as they can ensure that their ideal audience member actually watched the entirety of the ad.

GEOGRAPHIC TARGETING

OTT allows you to get more specific with your geographic targeting when compared to broadcast TV. On broadcast TV, your ad will be shown to an entire DMA (designated market area) that you chose to target. Viewers in your DMA might be your target audience; however, it will also include some service areas that aren’t a priority for you.

With OTT advertising, you are able to choose the specific ZIP codes where you want this ad to be shown, dialing in on your specific target audience and eliminating any unnecessary impressions from low priority service areas.

ADVANCED ANALYTICS

Getting detailed data points from your marketing efforts allows you to make the best decisions for your company. Because all OTT content is consumed via an internet connection, this means that you are able to get advanced and detailed analytics on exactly how your ad performed. You can then optimize your ads for better performance—knowing what worked and what didn’t—in order to change your strategy and re-engage with your target audience.

HIGH-QUALITY IMPRESSIONS

Based on all the targeting benefits above, this means that we will be guaranteed more impressions from an OTT ad than a broadcast TV ad. With broadcast TV, you run an ad that aims to be shown to a projection of your target audience. Each impression from an OTT ad will be of higher quality, and that higher quality comes from the advanced targeting and data that can be used beyond the scope of the broadcast audience targeting.

OTT Advertising: What Truly Matters Is the Viewer, Not the Channel

If there’s one main takeaway it’s this: What truly matters for OTT advertisers is who the ad is shown to, not what channel they are watching.

You want to reach a specific audience demographic, not every consumer who lives within a 100-mile radius of your business. OTT delivers your ads to your best customers. 

4 Reasons Why Local Business Should Advertise on OTT

1. INCREASED VIEWERSHIP OF OTT

It has been mentioned a few times already, but more and more people are deciding to “cut the cord” and switch over to OTT content. As more users are deciding to switch over, this is creating the need for more content providers to enter the OTT market, most notably services that offer free content in exchange for ad delivery.

These ad-supported OTT services will continue to grow as more people look to expand their streaming options without increasing their monthly ad spend. As a result, local businesses will continue to see their ad inventory options increase over time.

2. IMPROVED TARGETING OPTIONS FOR OTT ADVERTISERS

OTT allows local businesses to really narrow in on their target audience through a number of different things. OTT advertisers can get extremely specific with the prospective audience they create based on their existing customer base. OTT also allows businesses to target users on a number of different devices. Your ads are eligible to be shown to a user viewing OTT content on their smartphone, tablet, computer, or CTV device.  By honing in on your exact audience, that makes each marketing dollar spent more efficient.

3. NEW AUDIENCE AVAILABILITY

OTT works well when layered in with other marketing efforts such as SEO, PPC, and social media. By honing in on the exact audience you want to target, you introduce your business to a new audience that you have never been reached before.

You insert all these new potential customers right into the middle of the marketing funnel and you can see them convert through your other marketing efforts. By honing in on your exact audience, that makes each marketing dollar spent more efficient—optimizing your marketing costs and increasing ROI. Not only does OTT build up your local brand awareness, but it makes a direct impact in the number of leads your business is driving as well through other digital channels.

4. BETTER DATA & ANALYTICS

OTT allows you to get advanced analytics into how your ad campaign performed. When running other marketing efforts, the data your digital marketing provider can get from OTT allows you to better understand the impact your OTT campaign had in a multi-channel ad strategy. This then allows you to optimize spend to determine which ad campaigns offer the greatest value to your business.

Blue Corona Now Offers OTT Advertising to Local Businesses

OTT is growing in popularity, and as more and more consumers turn to Google to find and hire local businesses, OTT ads are a natural complement to your digital marketing investments to create brand lift and increase leads and sales.

Interested in learning more about how OTT advertising can increase leads and sales from your website and reduce your cost-per-lead across your online marketing investments? Send us a message.