What is OTT? How does it work? How OTT is The World of Tomorrow?

This article provides an overview of what OTT is, how it works, and how it is shaping the world of tomorrow.

By Arslan Hassan

January 27th, 2023

Vodlix OTT

The abbreviation OTT stands for over-the-top. This means streaming across different devices whenever we want is possible because of “over-the-top,” a convenient little term that explains the new delivery method of film and TV content over the internet without the need for traditional broadcast, cable, or satellite pay-TV services. In simple terms, we’re talking about people paying for the internet from Xfinity to watch Netflix, but not bothering to get 400+ channels from Comcast so they can scroll through ESPN4 on their big screen. 

 OTT (over-the-top) is a means of providing television and film content over the internet at the request and to suit the requirements of the individual consumer. The term OTT implies that a content provider is going over the top of existing internet services.

The OTT Advantage

With OTT video delivery technology, people now have a multitude of options at their fingertips. They have the ability to view content on a variety of platforms such as Smart TVs, Roku, computers, tablets, mobile phones, or gaming consoles. They also have the option to access multiple distributors for specialized programs and view channels by “app switching”, giving them more control over the content they choose to purchase and watch.

While they both use IP technology, IPTV is delivered over private cable networks compared to OTT delivered over internet services. OTT systems overcome the limitations of the single-operator set-top box (STB) technology required by IPTV. With OTT, content is only delivered upon request. Each connected device has a unique connection to the source of the content via the internet, making it “unicast”- delivering one stream to one device.

The Shift from IPTV to OTT

Let’s start with how we got here. Since the mid-1990s, digital television content delivery via Internet Protocol (IPTV) has been the common way for TV service providers to distribute content to customers. Reception typically requires a TV subscription, a contract, a set-top box, and a technician to connect the array of hardware to high-speed internet services in each customer’s home or office. Thus, content is distributed through private “multicast” MPEG transport stream networks (meaning multiple streams are pushed to multiple consumer locations, like digital cable and satellite TV). This locks consumers to one service provider (restricted to whichever is available in your area) and the content offered is limited to channels available in their particular area and region.

How Does OTT Work?

One of the inherent problems with serving TV content over the internet is being able to contend with the wide range of network performance. Performance depends on what speed the connection will support (e.g. Fiber, Wi-Fi, LTE, DSL), the display device (e.g. phone, a streaming device like Roku, Apple TV, or Firestick, or laptop), and then how many network hops there are between the provider and the end-user. At a high level, OTT systems and technologies are designed to minimize the impact these parameters have, by providing a “best-effort” approach to serving up the content. That is, OTT technology will adjust to the network performance of the entire chain in real-time so that the video and audio are delivered without pauses caused by buffering. These pauses are extremely frustrating for the viewer and may cause them to abandon the content.

How is OTT Delivered?

The accessibility of OTT content is one of the many reasons it’s so popular. To stream OTT, customers only require an internet connection and a compatible hardware device.

1. Mobile OTT Devices

Smartphones and tablets are able to download OTT apps to stream on the go.

2. Personal Computers

Consumers can access OTT content from desktop-based apps or web browsers.

3. Smart TVs

The most common examples include Apple TVs, smart TVs, PlayStation, Chromecast, Xbox, FireStick, and MORE. While you can typically stream OTT content on mobile and desktop devices, they aren’t considered true OTT devices.

Why is OTT Better Than Cable??

Stream Anywhere OTT means streaming anytime, anywhere there’s a wireless, wired, or wifi ( i.e., Internet) signal. That means on the subway if you’re lucky enough to have it.

Ads Free Content

OTT opened up the possibility for ad-free content (or really targeted campaigns), ad hoc subscription services, and more monetization strategies.

Stream anywhere

With the freedom of going “on the air” whenever viewers aren’t regimented to what’s broadcasting at the moment. They can literally customize their viewing experience to whatever they want to watch from the titles available.

Consumer Freedom

Consumers are getting to be in the driver’s seat. More than ever, content is going straight toward what the consumers want to watch — and the turnaround time is getting faster and faster.

OTT + The World of Tomorrow

We all know that Netflix isn’t the only big guy out there right now — YouTube has launched its video creation service, Amazon has gone “prime,” Hulu has moved to take over TV, and even the indie-darling Sundance is making a splash out of its festival favorites and more. The world is recognizing the potential of OTT, not just for the big players like Disney (who, after launching Disney+ last year, has already exceeded 28 million subscribers).

What’s more, cities like Atlanta are recognizing the power of OTT. As the first of its kind, THEA is taking the idea of OTT and, using Endavo, is pushing it to cultivate a community of creators — ones that are bolstering the metro economy with each piece of video that they create. Launched at SXSW in 2018 and powered to go OTT by Endavo, the platform is already boasting some incredible numbers. Currently, the platform is free, but with incredible monetization strategies in the line-up, it won’t be that way for long. Like all OTT platforms, once the audience comes, so do the opportunities to capitalize.