Simply put, OTT streaming means streaming content directly “over the top”—that is, over the internet straight to the user. This makes any audio, video or text-based content available 24/7, as long as a reliable underlying internet connection is available.

This may not be particularly groundbreaking for today’s generation of TikTok and Instagram Live streamers and viewers, but businesses and advertisers are well-advised to take heed as OTT permeates into other demographics. According to the Video Advertising Bureau, OTT adoption in the U.S. tripled between 2013 and 2018. And with over 2.13 billion users across the globe in 2020, OTT’s sheer audience size will make it the leading content distribution model for the foreseeable future.

Telecommunications providers will typically optimize their internet data pipes and infrastructure based on the most popular content types. Subsequently, these tend to be the types best suited for OTT.

For example, Netflix, Amazon Prime, Hulu, Roku and Apple TV are a few examples of leading video-on-demand (VOD) and live event streaming services. Audio content is also ideal for OTT streaming, with countless podcasts and music available on leading platforms like Spotify, Apple Music and Soundcloud, just to name a few.

It’s fair to say that no singular event gave birth to OTT. Instead, a combination of converging innovations gave rise to what’s referred to now as OTT streaming.

One of the earliest pioneers in streaming media is RealNetworks, which broadcasted one of the first internet-based audio events, a baseball game between the New York Yankees and Seattle Mariners, on September 5, 1995. The company would dominate the space with their streaming video technology into the early 2000s.

With the arrival of YouTube in 2005, businesses and consumers alike suddenly had at their disposal a free, widely accessible platform for free content distribution. On the paid front, Netflix expanded its DVD delivery service in 2007 with the introduction of a streaming video/movie service, and the rest is history. Although the company is still the leader in the OTT space, listeners and viewers these days have an astonishing plethora of OTT platforms catering to their individual tastes in media and genres.

OTT
Generally speaking, OTT encompasses any type of content that can be streamed directly online to viewers or listeners. The surge in popularity of OTT streaming has only accelerated the decline of television, with many popular titles having moved either partially or entirely to an OTT-based delivery format.

Similarly, music streaming services such as Spotify, Pandora and Tidal have, for the most part, supplanted both terrestrial and satellite radio. Many artists, brands and media houses even develop their own iOS and Android apps for streaming content directly to users, bypassing the barriers to entry set by leading streaming platforms.

Video Streaming
Video streaming consists of delivery of live video or video-on-demand (VOD) content. As the fastest growing category of OTT, it will make up over 82% of all internet traffic by 2022. For this reason, many firms choose to focus specifically on this type of content as their primary brand and messaging vehicle.

These days, content creators will seldom focus on one specific OTT platform to stream their content. More often, their distribution strategy consists of several platforms.

For example, YouTube, Instagram Live, TikTok and Twitch are popular platforms catering to both general and specific audiences. Mainstream, long-form video and entertainment (e.g., new Hollywood releases, video/music releases by popular artists) tend to reside on platforms like Amazon Prime Video and Netflix. These services offer both live broadcasts and libraries of video on demand—prerecorded shows and movies available for immediate viewing as part of a subscription or pay-per-view basis.

Short for dynamic ad insertion, DAI involves the insertion of video advertising into live programming and VOD content—for example, the automatic showing of relevant video ads in the middle of extended-length video content. DAI’s technology allows content creators and media outlets to target audiences based on increasingly granular viewer characteristics, such as specific interests, habits, and preferred device type, to name a few.

More contextual and relevant advertising translates to higher rates of commercialization for both media creators as well as OTT platforms. Interestingly, the distinction between creator and OTT platform is rapidly diminishing as content owners develop their own apps and platforms to stream custom content. However, most OTT streaming initiatives involve using a combination of the leading delivery platforms to tap into existing viewers and markets.

Artificial intelligence/machine learning (AI/ML) will continue to make DAI even more personalized and contextualized, allowing platforms and content creators to assimilate ads that are less intrusive and more personally engaging than ever before.

For example, Google’s Ad Manager already integrates ML into its ad delivery and advanced monetization software. The goal is to customize ad delivery and maximize revenue across devices for both live broadcasts and VOD. And as traditional broadcasters continue to incorporate OTT streaming into their hybrid monetization strategies, new content creators will suddenly find themselves on equal footing with traditional media giants. This means that for both enterprises and small-scale productions, OTT will become the primary domain of future online advertising.

According to Juniper Research, OTT subscriptions will hit 2 billion by the end of 2025—or around $194.2 billion. Suffice to say, innovation in the OTT streaming space is worth close monitoring in the coming months and years.

PDG Consulting has successfully delivered streaming media development and business process optimization projects that help drive business growth for clients that include DIRECTV, CBS, Sony Pictures, and 21st Century Fox. Have questions about OTT streaming? Contact us and let us know how we can help.