Over the top business services

Over the top (OTT) is a term used to refer to content providers that distribute streaming media as a standalone product directly to consumers over the Internet, bypassing telecommunications, multichannel television, and broadcast television platforms that traditionally act as a controller or distributor of such content.   


Over the top services are typically accessed via websites on personal computers, as well as via apps on mobile devices, digital media players or televisions with integrated smart TV platforms.  


Video content can be viewed across any device, including computers, mobile devices, televisions,  OTT devices, and more.   


Over-the-Top (OTT) Content comes from an OTT content provider and can be viewed on multiple devices, including computers, mobile devices, OTT devices, and more.  OTT devices are not desktop, laptop, or mobile but are used to consume OTT content (for example Smart TVs, Apple TVs, PlayStation, Xbox, Amazon Fire sticks and other streaming devices).   


The OTT content market is projected to grow at 14% CAGR during the forecast period (2017-2023).   


Personalized content has demonstrated to be extremely effective in reaching the target audience.  


Additionally, OTT content providers are making high quality original content that provides direct competition to content created and distributed on more classic forms of communication.   


Advertising is also moving online and using OTT content as a medium for reaching targeted audience.  


Key players are investing in innovative technology and development of new OTT content.

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OTT Marketplace & Trends

Technical OTT industry advancements in video encoding, encryption and delivery methods center on convergence, globalization, new technologies and business development.  


Here, some of the significant trends that will shape the OTT industry in next few years:  


Efficient encoding transcoding: AV1 has a proven increased efficiency over the existing High-Efficiency Video Coding (HEVC) and VP9 codecs.  It was backed by the introduction of official support in Microsoft Windows (beta currently), Google Chrome and Mozilla Firefox.  


Subscription price may increase: SVOD platforms such as Netflix, Prime Video, Hulu, etc. are spearheading the OTT industry by offering ease of access to life and on-demand streaming.  


Rough weather to continue for Pay-TVs while Roku, Fire TV, etc. will be the main streaming devices, the launch of new platforms from media houses such as Disney, Warner Brothers etc. clearly suggests the mammoth growth of time spent on the internet by users.  


Ad-supported Offline Viewing can be a reality: The increased number of OTT users will automatically attract digital advertisers to take advantage of the platforms with an AVoD revenue model.  These platforms can increase a user base via making their service completely ad-free by charging more or reducing the price.  As for SVOD users who download videos for offline viewing, advertisers come with an option to embed ads in the content itself.   The video streaming service owners can charge extra from their users for completely ad-free viewing. 


 Artificial Intelligence (AI) to make streaming smarter: The OTT industry has already used the AI through the recommendation engine at the platforms which function on a subscription-based model.   Being Interactive with AR & VR: The VR headsets will not require the support of external devices increasing the market enormously.  


Live Streaming & Short-Form Contents will stay in Vogue: The backstage chitchats in leading entertainment and sports events are immensely popular among viewers. They also prefer the life streaming over the on-demand videos.   


Streaming UHD Videos in Low Latency: even a smaller lapse in videos can cause you loss in viewers number.   Improved video delivery will top the list for leading streaming service providers and especially the ones who are starting off.  


Soaring Demand of Cloud Hosting: Along with the extensive storage space for online store owners and their users, a cloud-based infrastructure for OTT platforms will assist them to scale their services.  


Sachet Pricing will enter the Move: The OTT industry will focus more on the quality content: viewing pattern and content consumption behavior.  The OTT service providers offer the users comparatively low-priced subscription plans for a week or for a month.  


Convergence through data: The convergence of OTT with e-commerce, aided by advanced analytics and personalized ad-injection is opening up more revenue models for providers.  Personalizing for loyalty and revenue: The new generation of users expect tailored services based on their choices and preferences.   Personalization is demanded also from recommendations, subscription plans, metadata and even frontends.  


Demand for high-quality content: Providers are focusing more on the production of UHD 4K, 8K and HDR content, which is becoming common in households.  Evolving mobile media consumption: The next generation of cellular communication, 5G promises low-latency and speeds up to 10Gbps.  


Blockchain-powered content protection: Blockchain adoption in the OTT domain can help content creators and distributors in storing, cataloguing, copyrighting, and distributing the digital content.   Blockchain’s public ledger will help to ensure that digital content remains seamlessly accessible to authorised users, while protecting it against copyright infringements and online piracy. 


OTT beyond entertainment:   The combination of mobile internet and smartphones expands the dimensions of a classroom to life-streaming lectures, across the globe and across time.  This will be accompanied and bolstered by video lectures, life webinars, and interactive quizzes.   OTT-based digital learning will also enable learners to pursue multidisciplinary education by taking up relevant online life or recorded courses, as per their requirements.

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understand & communicate with others about streaming TV

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OTT Terminology

OTT stands for “over-the-top,” the term used for the delivery of the film and TV content via the Internet, without requiring users to subscribe to traditional mediums: a traditional cable or satellite pay-TV service.   


Two common examples include OTT content and OTT messaging.   


However, both OTT content and messaging still require internet access, cable, DSL, or a cellular data connection.   


OTT services do not offer a list of channels. Instead, shows and movies must be selected individually, can be downloaded and watched on demand.   


One of the most commonly used ways to record, compress, and distribute the business’s video content is a H.264 file type.   


Thus, based on what one plans on doing with the files, for exporting video may be chosen other common types of files encoding compression as: H.265, MPEG, MPEG-2, MPEG-4, MPEG-DASH.   


Over-the-top content refers to movies and television shows that are delivered directly to users. Popular OTT mediums include Netflix, Hulu, Amazon Prime and HBO Now, free services like YouTube and Vimeo. When your content skips over the middlemen and goes directly to the consumer it’s called DTC: Netflix, which doesn’t need to find a TV channel to show their content.  


 Multichannel Video Programming Distributor (MVPD) is something like a cable provider — a service that delivers packages of TV channels.   


Comcast, one of the biggest MPVDs in the industry, offers packages past 200 channels.   


Because OTT service is relatively cheap, many users purchase multiple OTT subscriptions as an alternative to monthly fees for the cable or satellite TV.  

Over-the-top Messaging

In 2009, WhatsApp introduced a free way to text message other users without using SMS.  Apple introduced i-Message in 2011, which uses Apple's own free messaging.   


Because of these alternative messaging options, many cellular service plans now offer monthly unlimited messaging.   


Video On Demand (VOD) If the programming isn’t  life, and the consumer is choosing the content to play, this is Video on Demand.   


OTT can largely be broken down into three different revenue models:  

• Subscription Video on Demand or SVOD (services such as Netflix, Amazon and Hulu);  

• Advertising Video on Demand or AVOD (free and ad-supported services such as Crackle);  

• Transactional Video on Demand or TVOD (services such as iTunes, Vimeo On Demand that allow users to pay for individual pieces of content).   


Set Top Box (STB) is an internet-connected device that streams OTT video. The Apple TV is one of the most popular STBs on the market. 


There is also an Amazon Fire TV (AFTV) for streaming media.   Amazon also offers a high quality content to the audience with high performance with their Amazon CloudFront proxy servers in multiple data centers. It is called a CDN option (Content Delivery Network).   


The latest ways to view content, usually with the help of technologically advanced goggles or headsets, or using the camera on mobile devices is Augmented Reality (AR) or Virtual Reality (VR).   


Playstation’s VR headset is the least expensive device with a bunch of content ready to go. Sony’s gaming media device Playstation 4 (PS4) allows to watch HBO when not gaming. 

Marketing Issues

To avoid the annoyance of the audience with the ad breaks, when one doesn’t control the video player or distribution outlet, one can use the VMAP (Video Multiple Ad Playlist), which is an XML template with a “structure” for ad insertion.   


Digital Ad Ratings (DAR) evaluate how the ads did online and mobile, like Nielsen’s TV ratings.  


 The RAF (Roku Ad Framework), an advertising on the Roku set-top box, helps to monetize by putting video ad functionality.    


A common interface between video players and ad units is the VPAID (Video Player Ad Serving Interface Definition) allows the ads to be interactive in-stream.  


Video-based ads or IMA (Interactive Media Ads) can be linear or nonlinear, like banners helping to make the customers to be okay with natural ad-breaks when using the Internet like on television. 

Management Issues

Originally proprietary tech for sending audio video data between Flash players and a server is a RTMP (Real Time Messaging Protocol) which allows high-quality  life media.   


Adobe has purchased it and partially-released it for everyone.   The HLS (HTTP  life Streaming) communications protocol was offered by Apple and is a part of QuickTime, OS X, iOS, and Safari.   


The backend software to manage the content, like Wordpress, is called CMS (Content Management System). For example, a Zype’s dashboard lets control everything from distribution to monetization and analytics.   


VBR (Variable Bitrate) is a kind of bitrate used in sound video encoding, while the files vary the output data for each time segment  offering a wonderful quality during the streaming.   


CBR (Constant Bitrate) is a codec’s constant data output which handles audio faster, but then doesn’t allow great optimization for storage and quality like VBR.

Key OTT services

Over-the-top apps (OTT) are bringing in a “new age” of video as it eliminates the need of a cable subscription or expensive satellite package.  


These apps allow you to stream video from your favorite provider, on your preferred device, whenever you want, paying only for channels you want or use.  These apps make the content available on television, mobile phones, tablets, desktop computers and streaming boxes.   


The over-the-top streaming market is just waiting to explode: the success of Netflix, Amazon TV, and Roku all attest to this.  You can leverage each segment of this potential audience by creating apps for: televisions,  tablets, streaming boxes, mobile phones.  


OTT video offers content providers, including B2B businesses, an opportunity to distribute their video content as a standalone product directly to their target audience through own branded apps.  Currently, there are more than 50% of internet-connected homes in the U.S. who use an OTT platform or app to stream content on a regular basis.   Not only will the video soon be the major source of internet traffic around the globe, but over half of that content is consumed on mobile devices.   


Millions of people prefer paying only for broadband internet and streaming services, seems we are entering a post-text world.   Developing an OTT app for mobile and TV devices can help the companies grow the business audience and revenue.   


OTT apps provide full control over their content, its accessibility, and its reach.   Some of the most-used apps can be  divided into several categories:  

- “TV Everywhere” apps, which are associated with traditional cable stations;  

- “TV streaming services”, which are an alternative to cable;  

- standalone, specialized apps (the streaming versions of specific channels or offer specialized content).  


TV Everywhere apps and websites ask viewers to authenticate their television subscription.  Once that subscription is verified, you’re able to access the stream live and on-demand content from over one hundred channels that are included in your TV package.   


TV Everywhere is free for TV customers and includes access to online programming for channels that their cable subscription includes.  If you watch TV Everywhere through a mobile phone not connected to wifi, you may have to pay data charges from your cellular carrier.  


The quality of TV Everywhere does depend on the strength of the available signal.  


Streaming TV services are subscription-based but separate from traditional TV service subscriptions.   


Streaming TV services are delivered via the Internet and typically offer a free trial so consumers before they buy.   They also offer the benefit of no contracts so that consumers are able to cancel their subscription without penalties.   


Streaming TV offers consumers a choice for those who prefer niche programming or cannot get traditional TV service.

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New OTT Revenue Sources – on screen and off screen

Every media company, content creator and distributor fights for viewers following the success of Netflix.   


Yet even though Pay-Per-View and advertising based models are prevalent, they will evolve and hybrid advertising-subscription models will likely become the standard.  The greatest secrets certainly for a successful video streaming business is buried deep within its revenue model and the content strategy.


One of the biggest mistakes streaming businesses do today is to simply look at what market leaders are doing and adopt the their content and revenue strategy. But where is uniqueness?  A streaming business’s revenue model is the way it makes money and it largely depends on the type of content you’re putting in it.  It also depends on the understanding of your audience’s preferences.   By choosing the right revenue model, you can make or break the entire base of your video streaming business.   


Subscription Video on Demand (SVOD): Consider Netflix or Hulu Plus as an example.  This is the most common revenue model many online video streaming businesses use today where users pay a fixed subscription of any duration and access the content unlimited.  


When users have paid for their subscriptions, they can surf and watch their choice of content anytime and anywhere, pause and play, rewind and record, etc.  Subscriptions are generally auto-renewable, can be cancelled them anytime, and they are good for platforms that have a huge variety of entertainment video content.   SVOD comes with a flat fee and platforms cannot normally decide different pricing for different content pieces.  


However, SVOD can be easily clubbed with pay-per-view or Ad models and can be further monetized.  Transactional Video on Demand (TVOD) or Pay Per View (PPV): Consider iTunes, Google Play as popular examples.  Remember, how we used to go to the physical rental stores and buy  rent movies. Transactional model works exactly like those rental stores but online.   It is like a transaction where viewers pay for accessing each piece of content they consume from your online store.  Buying lets them own that particular piece of content and keep it with themselves either on your platform or downloadable to their personal devices.   Whereas, renting lets them use a piece of content for a particular period allowed.   


This model of TVOD has other popular known names like “Electronic Sell Through” (EST) or “Download to Own” (DTO) or “Download to Rent” (DTR).  EST and DTO means that viewers then own the downloaded content, where they retain rights to watch it anytime for a fixed fee.  While DTR is the renting of the same content for a particular period of time, at a fee, likely for a lesser cost than a sell through. 


Pay per view (PPV) also works with special events and life programming, where viewers purchase a particular programming to view at a particular set time.   It is the best revenue model for various sporting or global events. 


TVOD services will generally try to retain their customers by offering special discounts and skim the cream with latest releases and hot buzz in the market.  


Advertisement-supported Video on Demand (AVOD): YouTube is the best example.  Ad-supported is the most explored option in video on demand OTT space.   AVOD is where you make your content available to be viewed for free but insert some advertisements in their viewing, earning revenues from the advertisers.     


Here your viewers pay with their eyeballs rather than credit cards.   You can even choose your pricing depending upon the type of content to be chosen for the ad and your platform’s popularity.  Traditional TV programming is ad-supported, clubbed with the subscription model. However, it is not video on demand.  


Video on demand ads are broadly categorized into Pre-Roll (played at the beginning of a video), Mid-Roll (in the middle of a video) and Post-Roll (at the end of a video) ads.  These ads are generally skippable or non-skippable depending upon how advertiser and the ad network chose to keep them.  VOD ads are shorter in length and are often less premium than those on TV.   


However, with the popularity of Smart TVs, advertisers choose this ad if it is targeted to a Smart TV vs a Laptop or Mobile Phone. AdoTube, Videology, Brightroll, Google Adsense are some ad services to use.  Hybrid of SVOD-TVOD or any other such combination If a platform has a big library of videos and gets popular day by day, it certainly needs a hybrid of different revenue strategies that can help to monetize the videos.   


If your audience base is deferred and you want a different monetization strategy to suit the needs of different set of audience, it is best to categorize and opt for hybrid VOD revenue model.   There will be people who would prefer paying for a monthly subscription). n, and there will be people who will just want to buy a particular piece of content.

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