Q: What is the definition of OTT?
This week’s question is one we are often asked. In 2009, we defined Over-the-Top Video (OTT) as “delivering online video directly to the living room TV, bypassing or going ‘Over-the-Top’ of incumbent PayTV operators.” (See "Over-the-Top, Cord-Cutting and the Consumer")
Today, we know these services in names like HULU and Netflix - two companies always capturing headlines. However, there is much more that can be offered, especially to niche markets. Think sports (ESPN3 on XBOX), ex-patriot content (KylinTV), adult, religious (SkyAngel), etc.
The formal OTT definition should be differentiated from other offerings in the space. OTT runs on an open Internet connection without the benefit of a managed network. It is often associated to IPTV; however, IPTV has long meant telco tv with offerings almost identical to cable and satellite provides. Further, as service providers roll out new TV Everywhere services (TVE), there is typically an authentication requirement of having the PayTV subscription and a cable connection (see the requirements of TWC’s iPad app).
OTT offers a two-fold threat. OTT not only bypasses the PayTV operator content offerings, but often runs over the broadband connection supplied by that same operator. We ran a study of Netflix users that showed almost two-thirds of those who streamed the service were using a cable modem. No doubt this is why metering and capped usage are becoming an issue.
Informally, though, the OTT moniker has broadened to cover the open delivery of content to a host of devices (from tv to tablets to mobile phones) – all stories we cover in the weekly OTT Monitor.
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