What Does OTT Streaming Mean? Working, Pros, Cons Explained

OTT streaming is regarded as the future of entertainment. Most people are now cutting the cord and moving exclusively to content streamed on the internet. This is because these platforms offer more variety and better video quality at a lower cost.

However, do you know exactly what OTT streaming means? How do OTT services work? Is Netflix an OTT? We have compiled this guide about OTT streaming, its meaning, and the technology behind it to answer all these questions.

What are OTT Streaming Services?

Over-the-top(OTT) streaming services are platforms that distribute content via the internet. These platforms bypass the traditional cable and satellite providers, delivering content to users directly through the public internet. The OTT model shifts control from the hands of the providers to the customers.

OTT streaming services are more flexible and practical than linear TV as users can access the former conveniently through multiple devices. Netflix, Hulu, Amazon Prime Video, and Disney+ are some examples of popular OTT platforms.

How OTT Streaming Works

OTT streaming involves using the internet to deliver content to the users’ devices. Platforms are, therefore, continuously sending and receiving data from a remote server to a user’s device.

The video is first encoded in the cloud whenever the publisher uploads a video through the platform’s content management system(CMS). Users can then request to watch the said video. It is then transcoded into a format suitable for the user’s device.

The DRM software authenticates the end user, after which the video content is sent to the streaming service’s content delivery network(CDN). It is then handed over to the user’s device, and the video player starts playback.

Types of OTT Streaming Content

There are multiple types of content that are suitable for OTT streaming:

Music and Podcasts

Audio content is a popular and highly competitive category of OTT streaming. Services like Spotify, Apple Music, and YouTube have enabled people to listen to their favorite artists at any time, thus contributing to a rise in active listening.

On music streaming services, you can find the biographies of artists, remixed playlists, and new recommended music based on the listeners’ preferences. The personalized listening experience is a big draw of music streaming platforms.

These platforms also often offer podcasts and audiobooks in their product range by signing exclusive deals to attract the audience of popular podcasters.

Video Streaming

Video-on-demand (VoD) services are by far the most common category of OTT streaming. People usually refer to these platforms when talking about OTT streaming. VoD streaming includes platforms like Netflix, Disney+, Hulu, Amazon Prime Video, and HBO Max, which are subscription-based platforms offering different tiered plans to access their vast libraries of TV shows and movies.

In addition to pre-recorded content, video streaming also features live broadcasts, especially sports events and news.

Game Live Streaming

Twitch has been trending for quite some time, but do you know exactly what Twitch streaming is? Well, it is a live streaming platform where people can broadcast themselves and chat with an audience simultaneously. Twitch is particularly famous for its gamer community, as people use it to stream themselves playing video games.

In its latest update, Twitch has also introduced other categories like vlogging, cooking, singing, creating art, music, etc. However, the ‘Just Chatting’ feature is the one that gets the most traffic on the platform.

YouTube, Bilibili, Facebook, and Huya Live are also known for game streaming along with Twitch.

Online Radio Streaming

Traditional radio stations are in relative decline, so you would be surprised to learn that online radio streaming has been steadily gaining ground. These independent radio stations are entirely online; they don’t need a standard radio license to operate.

Some examples include platforms like Tune.fm that bring together radio stations from across the world and leverage an algorithm to connect users with the right channel. It analyzes your music taste to provide a personalized experience based on your preferred genres, location, and instruments.

Live Stream Shopping

Live stream shopping has been gaining ground as a popular OTT streaming category. In this system, brands and influencers promote all types of goods- from frying pans to skincare to cars on their streams to an established audience. 

Live streams of sellers show them demonstrating and explaining about the products while the buyers ask questions about them and even make purchases in real-time. This trend started in China and has now spread to Western countries as platforms like Amazon, eBay, and Poshmark have hopped onto the live stream shopping bandwagon.

Popular OTT Streaming Devices

Mobile Phones

The majority of all online videos are streamed via a mobile device. Needless to say, they are one of the first to be considered when launching a streaming service, as no publisher can afford to ignore this segment.

There are several white-label OTT app solutions in the market that help you make and launch a branded OTT app for Android, iOS, or any other operating system.

Laptops and Desktops

While the use of smartphones for video streaming is rising, laptops and PCs remain the go-to for many people. Therefore, having a website in addition to a mobile app is a must for any platform. This allows users to log into their accounts and stream content on a bigger screen.

Smart TVs

Most modern smart TVs can be connected to the internet and are compatible with all the OTT apps in the market. This enables users to enjoy their favorite programs on a wide screen in the comfort of their home.

Gaming Consoles

Modern gaming consoles are not limited to gaming. They can also act as streaming devices once connected to the internet. This makes them popular for OTT streaming among gamers and younger generations.

How is OTT Monetized?

Ad-supported Video on Demand(AVOD)

It is a video monetization model in which fees are not charged to the users for accessing content. Instead, they are shown promotional content in between the streams. Users watch the content for free while the platform earns revenue from the advertisers for selling their ad inventory.

Subscription-based Video on Demand(SVOD)

This is the most common form of monetization for OTT streaming services. In SVOD, users get unlimited access to the platform’s content by paying a regular membership fee. These subscription payments are typically made on a monthly, quarterly, semi-annual, or annual basis.

SVOD lays the foundation for a steady and predictable revenue stream for the platform and is used by most major platforms worldwide.

Transaction-based Video on Demand(TVOD)

In the TVOD model, platforms rely on individual transactions on a pay-per-view basis to generate income. A good example is Amazon Prime Video, which rents videos for individual viewing. TVOD’s main advantage is that it provides immediate revenue for the platform while having users pay only for the content they consume.

Also Read: Difference between OTT and VOD streaming

Advantages of OTT Streaming

Instant Playback

Instant playback is often touted as the biggest advantage of OTT streaming. The video starts playing as soon as you press play. The size of the file does not matter much, and it will play uninterrupted as long as you have a good internet connection.

Saves Storage Space

Directly streaming content on the internet helps users save storage space. They don’t need to keep hard drives with large amounts of space to store their downloaded content. Even the streaming platform apps are not very big in size and require little storage space in your device.

Convenient

OTT streaming is convenient as you don’t have to adhere to a radio or TV schedule. You can watch whatever you want, whenever you want, and even skip or fast-forward scenes. You don’t even need to worry about recording the show and can start right from where you left off.

Affordable

OTT streaming is cheaper than traditional cable television as users only pay for the content they consume. There is no need for a cable or satellite connection, and the channels you don’t watch are not included in the bill. 

Many platforms also offer a free trial for a specified period, so you can check out the platform before financially committing to it.

Disadvantages of OTT Streaming

Buffering Issues

The quality of your streaming experience heavily depends on the quality of your internet connection. The video will simply stop and try to load again if your connection is slow. This not only interrupts the viewing experience but is also expensive, as buffering employs a lot of data.

Content Limitations

With OTT, content is segmented across different platforms. You will notice that even different seasons of the same show are on different streaming platforms. Further, some content is available only in specific countries due to licensing issues. This poses a significant challenge for people who often travel to countries with a limited catalog.

Security Issues

Potential data leaks and hacks are always a risk with OTT streaming platforms. These services often store sensitive information like credit card details and home addresses. This data can be used for nefarious purposes if it falls into the wrong hands via a data leak.

Conclusion

OTT streaming is the 21st-century way of consuming content. It has changed how everyone approaches entertainment and has put control in the hands of the viewers. Streaming platforms have provided new opportunities for monetizing content and increased the convenience of watching a movie.

Like everything else, they have both benefits and disadvantages. It is up to the user to determine which platform is the best for them and how they approach these challenges.