Content Delivery – The rise of the OTTs
- Vikas Kumar
- January 27, 2023
- BLOG, TELECOM & IT
- OTT market
- 0 Comments
Traditionally, the means of consumption of media for consumers has been through terrestrial television, a type of television broadcasting in which the signal transmission occurs via radio waves from the earth-based transmitter to a TV receiver with an antenna, called over-the-air or simply broadcast. Then came cable and DTH satellite technologies, unlike broadcast TV which used public airwaves, requiring consumers to pay to get access to cable channels
In the early 2010s, the cable television industry was at its zenith. But with the rise of OTTs, it had a significant effect on cable TV, in the same way cable TV had on broadcast TV decades ago. OTTs, short for over-the-top media service, is a method of delivery of film and TV content over the internet. In the modern era, users can sign up for services like Netflix, Disney plus and more and access their offerings over the internet. Another market for OTT is audio, which includes services like Spotify and OTT messaging, and video services like WhatsApp are increasingly common instead of phone calls
OTT model
It operates on a subscription-based basis, offering tiered packages running advertisements or ad-free experiences at a premium price
Rise of OTT
The rise of OTT was facilitated by the new pricing model based on subscription fees. Earlier, the business model included companies like blockbuster, owning physical stores with DVDs providing them for a rental fee. The model required people to watch movies quickly and then return them quickly so that the clerk could rent the same DVD to another customer again and again. In that effect, it levied heavy late fee charges on customers for returning DVDs after the due date
With this backdrop, Netflix came up with a new idea. Instead of making people visit physical stores, they mailed DVDs. In order to avoid late fees, Netflix introduced a monthly subscription model, requiring consumers to pay a fixed monthly charge with no late fees. Consumers could keep one DVD for over a month or borrow 10 DVDs after returning the previous borrowed DVD in the same month. The convenience of not leaving home and not worrying about late fee charges revolutionized the industry, resulting in Blockbuster filing for bankruptcy in 2011. Since then, Netflix has transitioned into using the internet from receiving DVD orders to using the internet to run its business.
Advantages of OTT Platform
Convenience– It can be accessed from anywhere, at any time from multiple devices provided connected to the internet. In contract, traditional cable networks are restricted by physical and geographical boundaries, but OTT has provided a platform giving access to content from worldwide and also provides freedom to watch any content at the preferred time of the consumer, contrasted with live streaming of traditional cable networks
Device independent viewing– It can be watched through Televisions, laptops, tablets, mobile phones, providing the ability to observe and permit live streaming from anywhere
Micro-targeting– OTT provides advertisers to analyse data about who their audiences are, what their tastes are, assisting advertisers to identify their target audience and apply their efforts accordingly
Super Aggregation– Consumers expect to spend more time “watching” and less time “searching”. It has become a critical solution to provide an integrated solution. Multiple brands now put all their content under one name, providing consumers with one place to find all their content
Conclusion
The OTT market is poised to be larger in the coming years. Its success has been largely due to its ability to provide on-demand video and subscription models. It provides varied content and personalized recommendations based on consumer’s tastes, allowing consumers to access and view video content anywhere from multiple devices
Disadvantages of OTT are for people with low internet connectivity and currently the most pressing concerns regarding the adoption are security and privacy concerns
Criticisms of the platform include people becoming more addictive to the OTT platforms due to the wide range of content offered, resulting in limited social life.
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