OTT: Concept, market, content formats and advantages

Have you ever heard of Over The Top (OTT)? We’ve already said that it’s all about streaming content over the internet and streaming platforms.

OTT services emerged in the context of the evolution of sharing materials such as videos and audios.

This is a reality possible thanks to the web and the guarantee of agility when listening to or watching the selected item.

In this scenario, options such as Netflix, Spotify and YouTube have gained more and more customers in recent years.

In common, all of them offered convenience, adaptation to the interests and routine of consumers.

When observing the potential of these solutions, other major players, such as Amazon and Disney , also entered the OTT market, building their own platforms.

In addition to empowering the customer, who can choose when, how and where to consume their favorite content, these services are on the rise due to the need for social distance to contain the advance of the coronavirus in the world.

More than a year after the start of the pandemic, a large part of the population continues to spend more time at home, which favors adherence and consumption of materials via OTT platforms.

Do you want to know more about this universe and how your company can take advantage of the moment to conquer or strengthen ties with the audience ?

So, keep reading this article. See the topics discussed below:

  • What is OTT?
    • When did the concept of OTT come about?
  • How does OTT work?
  • The OTT production and consumption market
  • What are the main content formats used on OTT platforms?
  • Examples of OTT Platforms
  • What are the advantages of OTT content?

Good reading!

What is OTT?

OTT: Concept, market, content formats and advantages
What is OTT?

OTT is a term that describes the distribution of content over the internet , on demand and directly, without the curation of intermediaries such as the mass media.

It is also the acronym for Over The Top, an expression borrowed from English that means, in free translation, “above the top” – which refers to greater user control over the content he consumes.

Let’s explain this relationship better.

Until the past decade, it was natural for a group of people with similar routines and interests to follow the same radio and television programs and even watch the same movies in the movies.

Just remember our childhood or adolescence to remember moments when we talked with colleagues about a band, series, cartoon or a soap opera we had watched the day before.

These conversations were able to capture the attention of the entire class, as the chances that classmates would know the schedules were immense.

After all, the command of the content distribution means was restricted to a few powerful groups, which selected audios and videos according to their editorial line and commercial objectives.

The internet broke standards from the moment it opened space for anyone with a computer and basic equipment to be able to send or publish materials online.

Both the sharing process and the tools needed to reach different audiences have become more accessible, allowing the entry of different professionals and organizations into this dynamic.

However, there were still barriers such as the need to download the materials before they were consumed and the possibility of copyright infringement .

These problems were remedied with the invention of streaming technology , the broadcast of its own content and/or the proposal to hire subscription services, in which the provider company is responsible for purchasing the distributed materials.

When did the concept of OTT come about?

There are no official records about when the concept was created, or even about a person or institution that has coined the term for the first time .

However, we can take as a reference the occasion when OTT became a popular expression, gaining the attention of entities such as the FCC (Federal Communications Commission), of the United States.

This happened in 2014 .

At the time, one of the main OTT services – Netflix – was experiencing large growth, reaching a total of 50 million subscribers on the planet, with emphasis on nations in North, Latin and Europe.

Four years later, Brazil stood out by writing and approving the first global version of the OTT concept , incorporated by the International Telecommunications Union, which states:

The definition makes clear the opposition between OTT and the traditional telecommunications market, which depends on technologies such as satellites to transmit its programming.

On the other hand, Over The Top platforms employ a disruptive technology , called streaming, to add agility to what is consumed through the web.

We’ll talk more about streaming in the next topic.

How does OTT work?

As we said above, OTT works thanks to technological advances such as streaming.

Before this technology, users already had access to video and audio files online, however, it was not so simple to watch or listen to these materials.

It was necessary to have high-speed broadband internet to keep up with content with some stability.

Even so, it was common to suffer from interruptions and transmission failures, especially when trying to watch a longer video.

The option was then to download the content on your personal computer to watch later, at the risk of violating copyrights , overloading the machine or even downloading unwanted files in the process, such as some viruses .

In this context, streaming was created as a smart alternative to consume content without having to download it completely or pay dearly for fast internet packages.

With this technology, parts of the files are downloaded little by little, ensuring more stability for transmission, even if the internet fluctuates.

Once available, streaming was included among the solutions of technology companies to streamline transmissions and eliminate intermediaries , allowing the delivery of content directly to the customer .

Currently, there are OTT platforms that produce and/or distribute materials for free, paid on demand (on demand) or by subscription.

The OTT production and consumption market

OTT: Concept, market, content formats and advantages
The OTT production and consumption market

According to a study recently carried out by Allied Market Research, the global Over The Top services market is expected to experience exponential growth in the coming years.

In numbers, it should go from US$121.61 billion in 2019 to US$1,039.03 billion in 2027.

The document reveals that video is the most popular format among OTT platforms, corresponding to almost a third of the market:

“Ad-supported VoD platforms are experiencing strong growth in ad revenue, making the ad-based revenue model popular amid the COVID-19 pandemic. For example, five of the top ad-supported streaming platforms, such as Hulu, Peacock, Roku, Pluto TV and Tubi, ad revenue reached 31% year-over-year in the second quarter of 2020.”

Remembering that VoD stands for Video On Demand , that is, one that is available to be watched at the most convenient time, place and device for the viewer.

In the case of VoD platforms that survive on the income obtained from the sale of ads, such as YouTube, this popularity occurs, in particular, because there is no charge for accessing the content.

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