The video streaming industry is rising with technological advances and the increasing demand for content. OTT or Over The Top technology has enabled better quality video streaming services at a lower cost. The industry has recently seen a lot of competition with companies like Amazon, Netflix, Hulu, Apple TV, etc.
This blog will explain what OTT technology is and how it works. Let’s dive in.
What is OTT technology?
OTT means “over the top.” Over-the-top is a type of delivery model for streaming media. OTT bypasses traditional cable or satellite providers, using the public internet to deliver content. It’s a way to watch TV or listen to audio without a pay-TV service. OTT is typically delivered through app-based services like Netflix, Hulu, and Amazon Prime Video. Compared to traditional TV, OTT streaming services are much cheaper and have no long-term contracts. That’s why the size of the OTT market in the USA is expected to reach $137.80 Billion by 2023.
How does OTT work?
From starting to monetizing, there are multiple stages of an OTT platform. Let’s see how OTT technology works.
OTT Platform Creation and Setup:
Before continuing, you must set up an account with a content delivery network (CDN). A CDN comprises many servers in different locations that will send webpages and other types of web content to the user. The location of the user, where the webpage originates, and the server used for content delivery all play a role in this process.
Next, set up encoding for your live or on-demand content. encoding is compressing video and audio data to make it easier to store and transmit. Encoding settings will depend on the content you deliver and the quality you want to provide. To host your content, you’ll need a media server. A media server is a computer system that stores and retrieves digital audio and video data. There are two types of media servers: software-based and hardware-based.
After establishing your hosting and domain, create your content management system (CMS). A CMS software application allows you to control digital content creation, revision, and publication. This makes managing website staples such as images and videos much simpler. Last, develop your user interface (UI). The UI is the part of the OTT platform that users interact with. It’s essential to make sure your UI is intuitive and easy to use.
Multiple monetization methods are used in the OTT industry. The most common are:
Pay-per-view or TVOD:
With pay-per-view (PPV) or TVOD, users can purchase and view content on demand. This is different from traditional television services, which require a subscription. With PPV, users only pay for the individual content items they want to watch. This can be attractive for users who don’t want to commit to a long-term contract. Additionally, PPV can be convenient for users who wish to watch content on their schedule.
Ad-Based Video on Demand (AVOD):
Ad-Based Video on Demand, or AVOD for short, is a type of ott platform monetization in which video content is provided to viewers free of charge, supported by advertising revenue. While this model has been around since the early days of television (think: broadcast television), it has only recently been applied to online video.
AVOD has many advantages. To begin with, it allows you to reach a big audience with your content. Plus, since viewers don’t pay anything to watch, they’ll try new videos more often than if they had to pay for each one individually. This means AVOD provides opportunities for content creators to develop an audience without stressing whether people would be willing or able to buy their work outright.
Furthermore, AVOD platforms usually provide more versatile pricing options than other ott platforms, giving content providers a more significant opportunity to offer viewers a “try before you buy” experience.
Subscription Video on Demand (SVOD):
SVOD refers to a content delivery model that gives users access to video content whenever they want, most commonly through a subscription. SVOD platforms generally have many movies and TV shows that can be watched at leisure, with new titles added regularly. Although SVOD has been available for quite some time, it has only recently become a standard option for ott platform revenue. In the past, most ott platforms made money through advertisements placed throughout the videos.
With the recent popularity of streaming sites like Netflix and Amazon Prime, people have become more willing to pay for video access. Therefore, SVOD has developed as a potential way to make money from ott platforms. Although it takes more initial investment than ad-supported models, SVOD could eventually bring in substantial income if it grows a large enough customer base.
List of OTT Platforms in the World
Best OTT Platforms in the USA
- MLB TV
Best OTT Website Platforms in the UK
- Next Up
- Amazon Prime Video
- Brit Box
- Channel 4
- Disney Plus
- Flix Fling
Best OTT Website Platforms in Canada
- Red Bull
Best OTT Website Platforms in India
- Eros Now
- Sony Liv
- Vodafone Play
Advantages of OTT Technology
There are many advantages of OTT service. Perhaps the most significant is that it offers a more convenient and affordable way to watch video content. The significant benefits of OTT technology are :
The key upside to OTT technology is that it provides more control and convenience than regular television. You can watch whatever you want, whenever you want. You don’t have to wait for a show or worry about recording it- log in and start watching.
OTT platforms are also accessible from any device with an internet connection. So you can watch your favorite programming even when you’re on the go. This is helpful for busy people who don’t always have time to sit in front of a TV screen.
OTT platforms are often cheaper than traditional television because you only pay for the content you want to watch. You don’t need a cable or satellite subscription, and all the channels you never watch aren’t included in your bill.
With an OTT platform, you can save money while still getting access to the content you want. Additionally, many platforms offer free trials so users can test these OTT services before making a financial commitment.
Not only is OTT technology more comfortable and cheaper, but it also offers excellent video quality. You can watch your cable or satellite provider’s channels with regular television. However, with OTT, you have access to content in HD or even 4K quality.
Disadvantages of OTT Technology
OTT technology comes with several drawbacks, some of which are listed below.
Potential for Buffering:
One of the main disadvantages of OTT technology is that it can sometimes buffer. This happens when the internet is too slow to stream the video content. When this happens, the video will stop and start again as it tries to load.
This can interrupt viewers and impair the experience. Also, if you’re not on an unlimited data plan, buffering employs a lot of data which could become expensive.
OTT technology has the disadvantage of not making all content available on every platform. For example, if someone wants to watch a Netflix show but they have Amazon Prime, they won’t be able to. This lack of selection can be frustrating for viewers.
Furthermore, some content may only be accessible in specific countries. This can pose a significant challenge for individuals who often travel or live in nations with reduced content offerings.
OTT technology also has the potential to compromise security. OTT platforms often store personal information like credit card numbers and home addresses. If this data falls into malicious hands, it could be used for identity theft or other nefarious activities.
OTT vs. CTV
Connected TV (CTV) is a technology that allows people to connect their smart TVs to the internet, giving them access to streaming services, apps, and other website features. Although CTV is like OTT in numerous ways, there are also some vital distinctions between the two.
The key distinction between CTV and OTT is that the former necessitates a physical connection between the telecasts and the internet, while the latter only needs wireless connections.
Lastly, CTV platforms don’t offer as much content or features as OTT platforms. This is because CTV is often provided by the TV manufacturer and only includes a few apps and services. However, OTT platforms give users a wide range of choices.
Launch Your OTT Platform with Castr
Creating an OTT app is always challenging. But with Castr, you can launch your platform efficiently in 7 days. We provide everything you need to get started, including a user-friendly dashboard, reliable streaming servers, and 24/7 customer support. Castr’s white-label OTT solution is easy to host, stream and monetize your content. Feel free to request a demo today.