OTT Full Form – The Present and Future of Streaming Media

ott channel costs

The consumption of traditional television has been on a decline in the last decade, and the ratings speak volumes about that. It is increasingly being replaced by Internet content, such as YouTube and various online streaming services and OTT platforms. OTT full form allows viewers to directly influence the content they consume, depending on their interests and preferences.

Join us as we explore how OTT technology works, what its key features and characteristics are, digital content monetization, etc.

Table of Contents:

  • What Does OTT Stand For?
  • Technical Overview on OTT Full Form
  • Key Features of OTT Platforms
  • OTT and Traditional Media Comparison
  • Different Types of OTT Content Services
  • Benefits of OTT Services for Consumers and Providers
  • How Does OTT Impact the Media Industry?
  • The OTT Platforms and Services Leaders
  • The Future of OTT
  • OTT and Digital Marketing
  • Challenges Facing the OTT Full Form Industry
  • Final Thoughts
  • FAQs

What Does OTT Stand For?

The over-the-top definition, or OTT, refers to streamed content from devices connected to the Internet. OTT is also considered a part of mobile marketing, usually seen as video content. 

Over-the-Top: Origin and Evolution 

 

OTT platform provider
Dacast offers businesses a video streaming and VOD solution to host and deliver your OTT content.

Over-the-top media services began in the early 2000s. It’s an idea of bringing content to consumers through the Internet without the need for traditional cable or satellite providers. Its popularity grew due to the numerous advancements in technology and changed customer habits that demanded more on-demand content. The OTT market growth became notable during its massive evolution over the past 15 years.

Different Contexts of OTT 

OTT can be seen in different contexts, such as media, communication, and gaming. The OTT meaning in media is on the highest level. OTT technology is generally accepted as an expression and includes various online streaming services and platforms. 

In communication, the invention of VoIP and messaging platforms lowers the need for traditional networks and providers, which were essential in the past before the evolution of OTT. In the gaming context, OTT technology includes cloud gaming that allows players to stream the game online, reducing the need for powerful hardware which is usually the biggest obstacle. 

Technical Overview on OTT Full Form

OTT delivers content through Internet protocols, using Adaptive Bitrate Streaming (ABR) and Content Delivery Networks (CDN) instead of broadcasting methods. It allows smooth playback and scalability.

Content Delivery Networks (CDNs)

OTT content delivery networks are essential. They send the content to many worldwide servers, which improves the load time and lowers the latency. This happens because of the proximity of the server to the user. CDNs work by storing copies of the content pieces close to the users, handling high traffic efficiently. 

Streaming Protocols

Multiple OTT protocols are crucial for content delivery across the internet. We will concentrate on the following key protocols:

  • HTTP Live Streaming (HLS): The HLS streaming protocol was developed by Apple and uses HTTP for OTT video streaming. This protocol divides the content into 2-to-10-second segments, which allows easier distribution. It supports adaptive bitrate streaming, which allows users to see multiple quality levels, giving them a better experience adapted to their network conditions. It switches between levels automatically unless the user sets it up to a certain level. Delivered through the standard HTTP web protocol, it’s highly compatible with most CDNs. Originally, it was designed only for Apple devices, but now it is widely supported. The biggest strengths of this protocol are its scalability and flexibility.
  • Dynamic Adaptive Streaming over HTTP: This protocol is also known as MPEG-DASH. It is an adaptive streaming protocol that supports different bitrates and resolutions. It divides the content into smaller segments, allowing the client to change the level of quality. It uses HTTP for delivery, increasing compatibility with web servers and CDNs. This protocol supports several codecs, providing high flexibility, and is compatible with multiple DRM systems. It includes a low-latency DASH that is a latency reducing extension. 

Device Compatibility

Leveraging internet-based protocols allows OTT services to work across various devices, such as smart TVs, tablets, game consoles, and smartphones. All the devices usually have apps or an interface to access OTT services. They are in charge of handling the user interface and content playback. It adapts the content to the device’s screen size and the hardware that supports it. The OTT services are cross-platform compatible by being encoded in a standard format that is widely supported.

Data Compression and Encoding

The data compression reduces the size of the files, making them easier to stream and also saving storage on the OTT servers and user devices. There are two methods: lossy and lossless data compression.

The most widely used video codecs are:

  • H.264 (AVC): It supports high-definition video and has balanced quality and compression efficiency.
  • H.265 (HEVC): Improves quality at low bitrates, and is highly useful for 4K video.
  • VP9: Open-source codec developed by Google.

Key Features of OTT Platforms

OTT Platform Provider

The growth of OTT in the past 15 years is based on multiple advantages compared to traditional broadcasting. Here are some of the key features and characteristics of OTT platform services.

Accessible Content

With the expansion of smartphones and tablets and the availability of OTT platforms on multiple devices, we can now access OTT content anywhere and anytime. 

Direct-to-Consumer

OTT platforms are using internet protocols to bypass traditional distribution channels, bringing the content directly to the customer.  

Content Variety

OTT platforms provide a wide range of content, including:

  • Video on Demand (VOD). This includes a variety of TV Shows and movies.
  • Live streaming. OTT platforms offer live streaming of different events, including sports.
  • Podcasts. Certain OTT platforms provide podcast episodes.
  • Interactive content. Interactive content on OTT platforms allows users to engage with the program.

Personalized User Experience

The personalized user experience is another one of the advantages of OTT in comparison with traditional distribution. The algorithms enhance the viewer experience by recommending content based on watching history and user preferences. 

Monetization

Digital content monetization comes packaged in multiple for different platforms and services. You will find the main OTT subscription models below. 

Subscription-Based (SVOD)

The subscription-based platforms offer high-quality content with premium features and an ad-free experience, usually charging a monthly price for their service. They often have different subscription tiers, offering various features and charging different prices for each of them. The most popular subscription-based OTT platforms are Netflix and Disney+.

Ad-Based (AVOD)

Access to ad-based OTT platforms, such as Tubi and Pluto TV, is usually free or has a lower cost due to the expenses being covered by advertisements.

Transaction-Based (TVOD)

The pay-per-view or rental options for individual content pieces are also popular. This often includes sporting events at DAZN or Amazon Prime video rentals. Each content piece or stream has its own price, and users gain access to the video or the duration of the event. 

Hybrid Models

Services that combine two or more monetization strategies are called hybrid models. Here, companies often mix ad-based digital content monetization with other methods to reduce user costs. Other cases are so-called freemium options, which give limited access for free with the option to pay for a premium experience. 

OTT and Traditional Media Comparison

OTT full form is developed as an alternative to traditional media, so there are several differences between them. In this section, we are going to explain some of the biggest ones.

Flexibility and Accessibility

One of the biggest advantages of OTT in comparison with traditional media has been its flexibility and accessibility. The traditional media has scheduled programs and the content is delivered through satellite and cable networks, with limited device support. The OTT content is delivered through internet-based channels and is available on multiple devices, allowing seamless transition between them. The content is on-demand with no scheduled programming.

Pricing

Cable packages are often expensive, as users are paying for a broader type of content not tailored to their preferences. Paying annual or monthly OTT subscriptions for personalized content has lower costs. 

Global Reach

OTT platforms have global reach, with the availability being variable by region due to licenses. Traditional media has geographic constraints and the content is passed through cable providers or broadcasters.

Content Variety and Originality

OTT platforms have a broad selection of genres and formats, offering users original content from multiple providers. They focus on niche content tailored to their interests and preferences. It is designed for users to have control over the content choice. Traditional media offers less variant, mainstream, curated content designed to fit into the scheduled programming.

Different Types of OTT Content Services

ott platform dacast
Many professional broadcasters turn to Dacast as their OTT platform of choice since it offers both live streaming and VOD hosting.

If you have started looking for OTT content services, you know that several different types are available on the market.

Subscription Video on Demand (SVOD)

SVOD OTT content is among the most popular. It is usually ad-free and users pay a fee to access an extensive content library. The globally most popular examples are Netflix, Disney+, and HBO Max. 

Advertising-Based Video on Demand (AVOD)

Advertising-based video-on-demand is usually free of charge for users, but it has a revenue model that is covered by advertisements. Some of the examples are YouTube, Tubi, and Pluto TV.

Transactional Video on Demand (TVOD)

Transactional video on demand is different than SVOD in the detail that users pay per view for an event, a movie, or a TV show episode, instead of monthly or annually for the whole library. The most popular transactional video-on-demand platform is Amazon Prime.

Live Streaming OTT

OTT live streaming is managed through several protocols, such as real-time messaging protocol (RTMP), web real-time communication (WebRTC), or DASH. They are using edge servers that reduce latency. Streams are usually encoded at multiple bitrates and resolutions, so the users can adjust it to their network. OTT platform examples for live streaming are ESPN+ and DAZN. 

Free Ad-Supported Streaming TV (FAST)

fast channels for OTT streaming

FAST is free-of-charge live TV or on-demand content that is advertisement-supported. They are accessed through apps on smart TVs, without any additional hardware. They offer live TV channels with news, sports, and entertainment content. It includes local and global channels. The most popular FAST channel platforms are Tubi, Freevee, Xumo, and Roku Channel.

Benefits of OTT Services for Consumers and Providers

The benefits of OTT services are numerous, both for consumers and providers. Let’s discuss some of the obvious ones. 

Consumers

The biggest consumers OTT services benefits are:

  • Flexibility. The OTT services are flexible, allowing customers to watch movies, TV shows, and other programs on demand.
  • Affordability. The subscription costs are lower for OTT services compared to traditional media.
  • Convenience. Viewers are fitting content into their own schedules.
  • Personalized content experience. The enhanced algorithms recommend users what to watch based on their history and preferences. 

Content Providers

Some of the benefits for OTT service providers are:

  • Lower entry barriers. The OTT is using cost-effective technology based on cloud. This helps them avoid massive upfront payments.
  • Direct consumer relationships. The content providers are bypassing any additional channels and the content goes direct to the consumers. 
  • Diverse monetization options. Service providers have several different monetization options to choose from: SVOD, AVOD, TVOD, and FAST.
  • Detailed analytics and user data. Providers can tailor the content offers to customer preferences with detailed data analytics. 

How Does OTT Impact the Media Industry?

The spike in interest and the growing trends of OTT are having a massive impact on the media industry as we know it, and the disruption of traditional media models. Below, you will see some of the ways they do it.

Cord-Cutting

During the last decade, cord-cutting statistics have shown a notable decline in cable and satellite subscriptions. This is due to the lower costs and cross-platform access of the OTT platforms. They are more flexible and offer niche content for users. All the trends are pointing towards the OTT platforms, away from traditional cable subscriptions.

Changes in Content Production

The OTT platforms investing in creating exclusive content leads to changes in content production toward creating original diversified content that attracts global subscribers. On the other hand, traditional media rely on third party, mainstream content.

Advertising Shifts

Advertisers are moving their budgets to OTT platforms to target the audience more precisely, which results in greater conversion. 

The OTT Platforms and Services Leaders

Some of the biggest companies reach customers globally and regionally. Below, you will find the OTT platforms list of these great market players:

  • Netflix. They are one of the pioneers in the OTT industry. They offer a wide range of movies, TV shows, documentaries, stand-up comedy specials, and more. As a provider of original and licensed content, they are available in almost 200 countries worldwide. The platform also offers subtitles and localized content. 
  • HBO Max. Here, you will find HBO premium content, like movies, TV Shows, and originals. There is also content from Warner Media. 
  • Amazon Prime Video. It provides an exclusive library of movies, TV shows, and original programs, including sports streaming and access to the Amazon digital store. They are the most popular TVOD platform. 
  • Disney+. It’s a fast-growing platform that offers content from Disney, Marvel, Star Wars, and National Geographic. The platform is available in more than 60 countries.
  • Hulu. Hulu is one of the most popular hybrid model OTT platforms, offering TV shows episodes, movies, and original content. They are available in the United States but are expanding globally. 
  • Zee5. An OTT platform from India, operated by ZEEL. They offer a broad range of content in multiple languages, including Hindi, English, Tamil, Bengali, etc. 
  • iQIYI.  You can find a broad selection of Chinese and international content on this OTT platform. They are available in China but are expanding globally through partnerships.  
  • Stan. Operated by Nine Entertainment Co., this Australian OTT platform offers content from notable world studios, including HBO, Showtime, and more. 

Niche and Emerging Platforms 

Some of the niche platforms emerge faster than others, so we prepared a list of the fastest-emerging ones on the market:

  • Crunchyroll. This is an OTT streaming service specializing in Anime and Manga. It is the biggest specialized company in the market, offering content for fans of Japanese animation.
  • MUBI. An OTT streaming service focused on curated film content. They offer an alternative to the mainstream streaming.
  • CuriosityStream. Founded in 2015, it’s an OTT service specializing in documentaries from various thematics, including science, technology, and history.
  • How the OTT Leaders Operate

When it comes to growth, everyone turns to see what the leaders in the industry are doing that contributes to their success. As an example, we will take two of the biggest OTT companies in the world:

  • Netflix. Founded in 1997 as a DVD rental, they moved to a streaming service in 2007. They differentiate from the other OTT platforms by heavily investing in creating original content. They use algorithms to recommend content, personalize the user experience, and make decisions about content production.
  • Disney+. This platform was launched in 2019 and is part of the Walt Disney Company. They leverage their content library and offer a wide range of films from Disney, Pixar, Marvel, StarWars, and National Geographic. They offer bundled packages with Hulu and ESPN+.

The Future of OTT

The OTT market is growing each day, so the platforms must improve to win the battle. What is the future of OTT services, the trends and possible advancements in the OTT industry?

Technological Advancements

Technological advancements, such as the 5G network, AI technology, and machine learning are set to have a massive impact on the OTT platforms. Faster internet speed and improved connectivity will lead to reduced latency and buffering for HD and 4K content, and will also expand the potential audience. AI is bringing content personalization to another level, and the algorithms will enhance the user experience.  

Interactive and Immersive Content

It is just a matter of time before we see interactive content on OTT platforms and immersive content using augmented reality and virtual reality. AR overlays digital details and content into reality, while VR can provide a fully immersive experience for customers leading them to virtual worlds provided by the OTT platforms. 

Content Fragmentation and Aggregation

With quality content spreading on multiple platforms, viewers need more than one subscription to access everything they want. This is driving the demand for content aggregation services where users can access content from multiple sources. Aggregation also leads to cost-efficiency by reduced overlaps and bundling. 

Localization and Regional Content

Global OTT platform leaders for internet video streaming are looking for ways to capture specific high-population markets and establish world dominance. Increasing the focus on local languages and content will help them achieve their goals.

OTT Growth Projections

The North American market is the biggest market for OTT technology, followed by the European. The Asian market offers the biggest opportunity for this industry because it’s expected to bring the biggest OTT market growth due to increasing internet access. 

Revenue in the OTT Video market worldwide is forecasted to reach US$316.40bn in 2024. The revenue is anticipated to demonstrate an annual growth rate (CAGR 2024-2029) of 6.30%, leading to a projected market volume of US$429.40bn by 2029.

OTT and Digital Marketing

Over-the-top platforms are becoming increasingly popular for digital marketing strategies. This is due to the big audience reach and data capabilities. Some of the advertising strategies on OTT platforms are:

  • Diversified ad formats
  • Engaging content
  • Leverage advertising
  • Targeting and personalization
  • Detailed analytics

Data analytics in OTT helps massively in ad targeting. Some of the ways to do that are advertising based on viewing history, audience segmentation, demographic and behavioral data, and engagement metrics. Advertising relevant to the viewer’s interests leads to a greater conversion rate. 

Challenges Facing the OTT Full Form Industry

Consumers get many benefits from OTT platforms, but it goes without saying that the OTT industry will face some challenges.

  • Content piracy and security concerns. Piracy is one of the main problems in the OTT industry. It can lead to significant revenue loss for companies, impacting the financial capability for quality content creation. Addressing this issue is difficult and requires never-ending monitoring by the OTT regulatory environment
  • Intense competition. Differentiating is key in this market that has established an intense competition. However, there is also the danger of user fatigue from content fragmentation.
  • Bandwidth and infrastructure issues. Streaming HD and 4K content requires good infrastructure and decent bandwidth. Limited infrastructure and lack of bandwidth in certain locations is a massive challenge for the OTT growth.
  • Regulation and compliance. Understanding international and local regulations is crucial for the OTT industries. Some of the licenses across different regions and locations are costly and are a challenge that the OTT industries have to face on a regular basis.

Final Thoughts

The OTT full form is having a huge impact on the media market. With their flexibility, accessibility, and specialized content, they are outperforming the traditional media, and causing cord-cutting from the cable and satellite subscriptions. They offer customers the option to pay for original, niche, on-demand content that can be accessed anywhere, anytime, on any device. Advertising companies are shifting their budgets toward OTT platforms for precise targeting and bigger conversion rates. We can say it is the present, as well as the future of media. 

Looking to build a professional, top OTT platform of your own? Look no further than Dacast. Dacast’s professional-grade OTT platform technology has the tools you need to host and deliver incredible OTT content. Using HTML5 video player and partnered with top-tier CDNs, Dacast provides the best possible OTT broadcasting experience.

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FAQs

1. How are audiences redefining their relationship with the media?

Audiences are increasingly searching for on-demand consumption, not depending on TV schedules. This leads to OTT market growth and curb-cutting away from cable and satellite subscriptions. Consumers also need more control over what they are watching, and OTT platforms use enhanced algorithms to provide that.

2. How does consolidation shape the future of OTT services?

Consolidation leads to fewer leaders on the top of the OTT market, merging multiple services to give users fewer subscriptions to pay and more quality content on their hands. Content aggregation and library extension are a logical consequence of this process that also helps the user experience. 

3. What is the role of OTT in the Metaverse?

OTT platforms are integrating their content into the metaverse, allowing users to stream it. The platforms are creating spaces in the metaverse where people can watch movies, TV shows, concerts, stand-up specials, and more, joining virtual spaces.

Jon Whitehead

Jon is the Chief Operating Officer at Dacast. He has over 20 years of experience working in Digital Marketing with a specialty in AudioVisual and Live Streaming technology.