In the digital video industry, OTT has become the holy grail of content distribution. Statistics estimate that the global OTT video market will generate over $300bn in 2024. And are we really surprised? I can’t remember the last time I turned on my TV to watch cable television. And I’m surely not the only one. But what is OTT anyway, how does it work, and is it truly the future of entertainment?
What Is OTT Anyway?
The abbreviation OTT stands for “over-the-top”. As I’m sure you already know, it denotes any content streaming service that distributes media via the Internet. The phrase “over-the-top” refers to the fact that content is delivered through another platform (medium).
Types of OTT Content
Naturally, in this article, I will focus on OTT video streaming (we are TargetVideo, after all). But for the sake of comprehensiveness, let’s take a quick look at the different types of content distributed using OTT technology:
- Video Content – Video is, by far, the most common over-the-top medium, with big names such as Netflix, Hulu, and YouTube popularizing it worldwide. There are two main types of OTT video – VOD (on-demand video users can watch when they choose to) and live streams (content that viewers can watch in real time).
- Audio Content – A close second in terms of popularity is over-the-top audio. This usually encompasses music, podcasts, audiobooks, and similar formats. We’ve all heard of Spotify, iHeart Radio, and similar audio streaming services.
- Messaging and VoIP – Messaging and voice calling applications and platforms are a less talked about OTT format. Apps like Skype, Viber, and WhatsApp work via the internet to convey textual, visual, and audio content from one user to another. There are also lesser-known VoIP tools, like OpenPhone, which often have more unique features.
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Follow UsTypes of OTT Devices
In addition to content, the device where said content is streaming is an integral part of the over-the-top infrastructure. In the simplest terms possible, an OTT device can be any device where you can stream OTT content. If you could program a toaster to stream, the toaster would be considered an OTT device.
More specifically, though, the most common OTT devices include mobile phones, PCs, laptops, smart TVs, and gaming consoles.
Mobile OTT Devices
The mobile video market has been growing steadily for quite some time now. In fact, people downloaded OTT video apps over 3 billion times in 2023. This makes OTT apps one of the most popular mobile app types.
If you’re planning on building a mobile OTT app, you’re right where you should be. TargetVideo offers comprehensive OTT app solutions for an array of devices, including mobile. And if you already have an app, but still need a player – check out our mobile SDK solutions.
Desktops and Laptops
The popularity of PCs seems to be unwavering, both in general and in the over-the-top world specifically. Now, I don’t want to say that you have to have a website. But you kind of do have to have a website if you want to build a successful OTT streaming service.
Smart TVs & OTT Boxes
Most smart TVs are compatible with OTT apps, allowing viewers to enjoy video content on the big screen. Additionally, connected TV has been the buzzword in the video industry for a while now, with CTV advertising being one of the largest revenue sources for OTT publishers.
Additionally, even users who don’t have smart TVs can enjoy the benefits of one through an OTT box. This is a device that connects to a non-smart TV to provide it with internet connectivity and other smart-like features.
Gaming Consoles
While originally built for, well – gaming, gaming consoles have many more functionalities. One of them is the ability to connect to the internet and act as OTT streaming devices. This makes them a popular solution for streaming over-the-top content among gamers and younger generations in general.
How Does OTT Work
At the surface level, the concept of over-the-top delivery isn’t all that complicated – a user requests to watch a video (either by clicking the play button or loading an autoplay video player), and the content begins streaming. However, there’s a lot more going on behind the scenes:
- Once the publisher uploads a new video through an OTT platform’s CMS, the video will be encoded.
- After encoding, a user can request to watch the video, usually by clicking the play button.
- Upon this request, the content will be transcoded into the appropriate video format for the video player and OTT device in question.
- The DRM software then proceeds to authenticate the end user before preparing the content for delivery.
- If the user’s device successfully passes the authentification, the requested content is handed over to the platform’s CDN and transported over the internet to the user’s device.
- Finally, the user’s device receives the content, and the video player starts streaming.
This process may vary to an extent depending on the platform and device in question, but the above steps are the gist of it.
How Is OTT Content Delivered?
Since over-the-top content can stream on various devices, the delivery process is pretty intricate. One of the most significant challenges providers face is adapting data streams to various network performances and display devices. For instance, when watching videos on your phone from a public-access wifi, you might not have the same internet speed and bandwidth as you would at home on your computer.
In other words, it’s important for publishers to be able to deliver content that won’t keep buffering every couple of seconds. OTT providers accomplish that through adaptive bitrate streaming. That means that content quality will scale with the end-user’s internet speed and device capabilities. This allows for smooth, uninterrupted playback and optimal user experience.
How to Launch an OTT Service
With the popularity of OTT video content distribution at an all-time high, publishers worldwide are determined to jump in on the action. But how do you start a successful OTT streaming service? Here’s a (very quick) step-by-step overview of the process.
Step 1: Content Production
Without content, there is no point in building an OTT service. So before anything else, you’ll need to invest in the production or procurement of a video library for your users. The exact type of content will depend solely on the kind of over-the-top streaming service you want to build.
Step 2: Choose a Video Monetization Model
Unless you’re planning on financing your over-the-top venture through other means, your streaming service should generate some sort of revenue. It is up to you to decide whether you want your viewers to pay a recurring subscription fee or only pay a one-time charge for the content they want to watch (i.e. pay-per-view). Of course, you can always go with OTT advertising and offer your content for free in exchange for viewing some ads.
Step 3: Finding an OTT Platform
Launching an OTT business is much easier if you have access to a robust, feature-rich OTT platform. The platform’s infrastructure should include things such as secure video hosting, easy library management, a reliable HTML5 video player, white-label OTT apps, and of course, the monetization capabilities of your choice.
Step 4: Building the Streaming Service
Now that you have the plan, the content, and the infrastructure, it is time to actually build your streaming service. Ideally, the OTT platform you choose should have all the necessary tools to help you do so.
Launching an OTT website is generally simpler and more affordable than building a mobile or CTV app. Besides, as I have already mentioned, having a website is a must for over-the-top businesses.
Still, without an OTT app (ideally for as many devices as possible), you’re potentially losing out on a good chunk of your target audience. So if not now, then down the line, do think about investing in one.
Start an OTT Streaming Service With TargetVideo
With OTT being one of the fastest-growing branches in the video industry, the best time to start an online video business is now! If you’re thinking about launching an OTT streaming service, TargetVideo can provide the entire infrastructure, advanced video and ad tech, and expert support to get you off the ground. Get in touch with our sales team to learn more.
What Is OTT – FAQ
1. What Does OTT Stand For?
OTT stands for “over-the-top” – a reference to the streaming technology used to deliver media over the internet.
2. What Are the Benefits of OTT for Publishers?
OTT is beneficial for publishers because it allows them to reach a wider, online audience they wouldn’t have access to in traditional media. This, by extension, leads to better monetization opportunities.
3. How to Launch an OTT Service?
To start an OTT service, you will need a reliable online video platform and a rich content library. From there, it’s all about building the website and apps and reaching the right audience.
3. What Is an OTT Platform?
An OTT platform is a SaaS provider that offers OTT publishers the infrastructure necessary to stream content over the Internet. This includes hosting, transcoding, CDN, safety features, an online video player, monetization capabilities, and so on.
4. OTT and CTV – What Is the Difference?
The difference between OTT and CTV is that, while OTT refers to the content distribution method over the internet, CTV refers to the device where the content is delivered – a connected television.
5. What Is an OTT App?
An OTT app is an application for streaming live or on-demand video content over the internet. These apps can be available across dozens of devices and operating systems, including various mobile phones and smart TVs.
6. What Is OTT Advertising?
OTT advertising is a method of monetizing OTT content through ads. Ad-supported over-the-top content is often accessible to users for free, in exchange for seeing ads.
