What are OTT platforms? What are their main features?

Experts predict that in the United States from 2017 to 2023, the OTT service market revenues will double from 22.9 billion to 48 billion USD, and IPTV operators’ revenues will decrease from 9 billion USD in 2015 to 4.7 billion in 2023. This suggests that OTT platforms will soon replace IPTV services. We’ll be taking this opportunity to explain why the demand for OTT services is growing every year, and how these services differ from IPTV, cable, and satellite TV.

What does an OTT platform mean?

An OTT platform (a streaming platform) is an online service where video on demand, linear TV, and other types of media are available. In most cases, this is a cheaper alternative to cable and satellite TV. There are generally subscription fees to access the service.

The OTT service users do not have to waste time downloading files. All content has already been uploaded to web servers. Information is displayed in real-time using TV set-top boxes (Apple TV and Android TV), PCs, tablets, smartphones (Android- or iOS-based), and game consoles (PlayStation and Xbox).

How does an OTT platform work?

Access to the service is provided through websites and applications. OTT services offer a wide range of content: movies, TV shows, TV, music, and radio.

There are several OTT business models. The AVoD (advertising VoD) model offers free video content, but it is accompanied by drop-in commercials. The SVoD (subscription VoD) model provides access to content for a stipulated duration. In this model, the user pays for a subscription and selects any content from the operator’s catalog.

Some OTT services provide retail access to content, i.e. the customer pays only for the videos that interest him/her. For example, in the EST (electronic sell-through) model, users acquire a digital copy of the content, while in the TVoD model, he/she rents movies and TV shows (access to the material is provided for several days).

Why is it called OTT?

OTT stands for ‘over-the-top’.

What is the difference between OTT and IPTV?

IPTV services use IP protocol technology. The service operator controls the content distribution, independently determines the subscription package contents (e.g. the number of TV channels), and sets the corresponding tariffs. The IPTV provider customers cannot watch content while away on holiday, on a trip, or on their way to work. Content transmission is linked to the device’s hardware address.

OTT services operate the same way, however, the communication channel between the operator and the customer does not depend on the Internet provider. This means that the service user has access to content anywhere in the world where there is Internet access.

How many OTT services are there?

OTT platforms are very popular all over the world. The number of service providers amounts to a thousand. According to official data, more than 600 services are registered in Europe and the USA alone. Experts say that in 2020, the number of active users of the services will reach 650 million people.

OTT services spend less on infrastructure maintenance, so the service subscription fee is cheaper than that of a satellite or cable TV package. It is much more convenient to use OTT platforms. One can watch his/her favorite TV shows and movies anywhere where there is both Internet access and a playback unit.