Everybody is talking about OTT, “over the top,” video these days. OTT is a shorthand way to describe the delivery of audiovisual content streamed over the Internet without the involvement of an Internet service provider controlling or actually distributing the content.
Beyond that definition, however, lies a complex ecosystem, as OTT encompasses a number of types of distribution and different business models. We are often not clear exactly which of these distribution types and business models we are talking about when we say “OTT.” And we often describe IPTV (Internet protocol TV) services as OTT. This can lead to confusion.
To make sense of this important emerging sector of our industry, the Digital EMA Steering Council has prepared a white paper on “Defining Over-The-Top Digital Distribution.” The white paper was authored by Chris Roberts and Vince Muscarella of Rentrak, both of whom have been recognized as “Digital Drivers” by Home Media Magazine the past two years.
The white paper walks through the three primary business models for OTT: linear programming (Live TV), electronic sell-thru (EST), and video on demand (VOD). Live TV is defined as a “subscription-model service where content is streamed live to an internet-connected device for viewing by the end-user.” EST is described as a service that allows a consumer to purchase or perpetually license a digital reproduction. And VOD is the model where “content not owned or perpetually licensed by the consumer … is either streamed or downloaded to an internet-connected device for viewing by the end-user at the end-user’s discretion on an on-demand basis.”
“Defining Over-The-Top Digital Distribution” then explains the types of VOD: transactional video on demand (TVOD), subscription video on demand (SVOD), and advertising-supported video on demand (AVOD). It concludes by identifying some of the major OTT providers and their business models.
We hope that this white paper will provide greater clarity to our discussions about the significant and growing OTT market.