Heidi Norton
OTT, or Over-the-top, is a term used to describe a range of media and messaging services that are provided by third parties and delivered over the internet. OTT services include streaming platforms such as Netflix, Amazon Prime Video, and Hulu, which provide subscription-based access to television and film content. OTT advertising has become an increasingly popular solution for marketers as streaming services continue to overtake traditional linear TV. In addition to video content, OTT services also offer instant messaging and voice calling capabilities through applications such as WhatsApp, Skype, and Viber. While OTT content is typically accessed via streaming platforms on various devices, it can also be delivered through internet service providers (ISPs) that transport IP packets.
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What You'll Learn
- OTT refers to Over-the-top media services, which are streaming services independent of traditional pay TV
- OTT services include paid subscriptions like Netflix and free, ad-supported services like Tubi
- OTT advertising is shown during ad breaks or before/after video content on OTT platforms
- OTT messaging is instant messaging provided by third parties, e.g. WhatsApp, as an alternative to SMS
- OTT voice calling, or VoIP, uses open internet protocols to replace mobile operator services, e.g. Skype, WhatsApp
OTT refers to Over-the-top media services, which are streaming services independent of traditional pay TV
OTT, or Over-the-top media services, are streaming services that are independent of traditional pay TV. OTT services are delivered over the internet, without the involvement of a multiple-system operator (MSO) in the control or distribution of the content. This means that OTT content is accessible on any device with an internet connection, including computers, smartphones, tablets, and smart TVs.
OTT services can be divided into two main categories: paid subscription services (also known as subscription-based video-on-demand or SVOD) and free ad-supported streaming services (known as ad-supported video-on-demand or AVOD). Examples of paid subscription OTT services include Netflix, Disney+, and Amazon Prime Video, which provide access to a wide range of TV shows and movies for a monthly fee. Free ad-supported OTT services, on the other hand, offer content for free but include advertisements. Popular AVOD services include Pluto TV, Tubi, and Amazon Freevee.
In addition to these two main categories, there are also "skinny" OTT television offerings, which provide live streams of specialty channels. Examples include Sling TV and Hulu with Live TV. These services offer a more limited selection of channels compared to traditional pay TV but are often more affordable.
OTT services have become increasingly popular in recent years, with more and more people cutting the cord on traditional pay TV and switching to streaming. This shift has also impacted advertising, with marketers recognising the potential of OTT platforms to reach a wide audience. As a result, ad spend on OTT platforms is expected to continue growing, with forecasts estimating that US spending on OTT video ads will reach $11.14 billion by the end of 2024.
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OTT services include paid subscriptions like Netflix and free, ad-supported services like Tubi
OTT, or Over-the-top, is a term used for media services that distribute streaming content, such as audio and video, directly to viewers via the internet. OTT bypasses traditional cable, broadcast, and satellite television platforms, allowing viewers to access content without the involvement of multiple-system operators in the control or distribution.
OTT services can be categorised into two groups: multichannel video programming distributors (MVPDs) and online video distributors (OVDs). MVPDs include services like DirecTV Stream, FuboTV, and Sling TV, while OVDs refer to entities that provide video content via the internet or other IP-based transmission paths.
OTT platforms offer a range of content, including shows, movies, and sports, that can be accessed through various devices such as smartphones, tablets, streaming devices, and smart TVs. Some popular OTT services include Netflix, Hulu, Amazon Prime, and Disney+. These platforms may offer subscription-based or free ad-supported services.
Netflix, for example, has three monthly pricing plans, including an ad-supported option, to cater to viewers' preferences and budgets. Similarly, Amazon Prime has become a significant player in OTT advertising, boasting a large audience and advanced audience targeting data.
Tubi is another OTT service that falls under the category of FAST (Free Ad-supported Streaming TV) channels. These services provide viewers with free access to linear channels, classic movies, reruns, and more, without the need for a paid subscription.
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OTT advertising is shown during ad breaks or before/after video content on OTT platforms
OTT, or "over-the-top", advertising is a form of marketing that delivers ads directly to viewers through streaming video services or devices, bypassing traditional TV providers. This allows advertisers to reach their audiences without being limited by pre-planned broadcast schedules or geographic restrictions. OTT ads are typically displayed during ad breaks or before/after video content on OTT platforms such as Amazon Prime Video, Hulu, Tubi, Paramount+, Peacock, and Discovery+.
OTT advertising has become increasingly popular due to the rise of cord-cutting, where households cancel their cable or satellite TV subscriptions in favour of streaming services. This shift presents a unique opportunity for brands to connect with potential customers through streaming TV advertising. By 2024, over a third of all US households are expected to be cord-cutters.
OTT platforms offer a range of monetisation methods, including ad-supported, subscription, transactional, premium, and hybrid models. Ad-supported platforms provide free content but generate revenue through paid ads displayed within the content. These ads are typically sold on a CPM (cost per mille) basis, where marketers only pay when their ad is viewed.
OTT advertising allows for precise audience targeting by utilising data and analytics to understand viewer preferences, demographics, and behaviour. This enables advertisers to serve tailored ads to specific audience segments, maximising the effectiveness of their campaigns. Additionally, OTT targeting helps to enhance ad engagement and improve measurement capabilities, providing marketers with modern tools to quantify the impact of their ads.
OTT ads can be grouped together in a tactic known as ad podding, where multiple ads are played back-to-back during a single commercial break. This strategy improves ad viewing efficiency and user experience while maximising revenue for the platform. OTT advertising also offers varied ad formats, including interactive elements, to make ads more engaging and encourage viewer interaction.
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OTT messaging is instant messaging provided by third parties, e.g. WhatsApp, as an alternative to SMS
OTT messaging, or Over-the-Top messaging, is a text-based communications service that operates via the internet, rather than through a mobile network. OTT messaging platforms are provided by third parties and include popular apps such as WhatsApp, WeChat, and Facebook Messenger. These platforms have become a common alternative to SMS messaging, offering a range of functionalities that SMS lacks.
While SMS messaging is limited to 160 characters of plain text, OTT messaging apps allow users to send and receive multimedia files, such as photos, videos, and voice messages, in addition to text. This enhanced interactivity has led to a decline in SMS usage since 2013, as users migrate to more engaging OTT platforms.
OTT messaging is particularly beneficial for businesses looking to connect with customers. By utilising platforms such as WhatsApp Business and Apple Business Chat, companies can provide personalised shopping advice, deliver after-sales customer service, and even run marketing campaigns. The ability to integrate multiple messaging apps into a single system enables businesses to tailor their communications strategy to their customers' preferences.
However, adopting OTT messaging for business communications comes with challenges. Set-up costs, monthly fees, and per-message charges can be high, making it difficult for smaller enterprises to implement. Additionally, unlike SMS, which only requires a phone number to function, OTT messaging apps need specific permissions from recipients before sending messages. Despite these hurdles, OTT messaging is likely to evolve and eventually pose a significant challenge to SMS as a business messaging platform.
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OTT voice calling, or VoIP, uses open internet protocols to replace mobile operator services, e.g. Skype, WhatsApp
Over-the-top (OTT) voice calling, also known as Voice over Internet Protocol (VoIP), is a technology that allows users to make voice calls over the internet, bypassing traditional phone lines and mobile operator services. VoIP uses open internet protocols to transmit voice and multimedia content, enabling users to make calls from computers, smartphones, or VoIP phones.
VoIP services convert your voice into digital data packets, which are transmitted via broadband connections. This allows users to make voice calls to anyone with a telephone number, including local, long-distance, mobile, and international numbers. Some VoIP services, such as Skype and WhatsApp, may only allow calls to other users of the same service, while others offer interconnected VoIP services, enabling calls to and from regular telephone networks.
To use VoIP, users may need a special VoIP phone or a VoIP adapter for a traditional phone. VoIP phones can be connected directly to a broadband connection and operate like traditional telephones. Computer-based VoIP services require software and a microphone, and mobile devices can use VoIP through specific apps.
VoIP has transformed the way we communicate by offering cost savings on domestic and international calls, as well as advanced features such as call forwarding, voicemail-to-email, and video conferencing. It has also enabled the unification of communications for businesses, treating all communications (phone calls, faxes, voicemails, etc.) as discrete units delivered to any device.
Popular VoIP services include Skype, WhatsApp, Microsoft Teams, Google Voice, and various VoIP phone providers.
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Frequently asked questions
OTT stands for Over-the-top.
OTT refers to content from a third party that is delivered to an end-user over the internet, without the involvement of a multiple-system operator in the control or distribution of the content.
OTT services include paid services such as Netflix, Disney+, and Amazon Prime Video, which provide access to subscription-based film and television content.
Examples of OTT messaging services include WhatsApp, Viber, WeChat, iMessage, Skype, Telegram, and the now-defunct Google Allo.
