Search

Will OTT Replace Traditional TV - There's Still No Last Verdict

June 26, 2018


History continues to repeat itself, constantly affecting those who don’t want to make adjustments. Video killed the radio stars, CDs killed cassettes, and downloadable content somewhat put DVD sellers in jeopardy. TV service providers are fighting a hard battle against the advancing technology. They are in the same position where technological advancements are making their services obsolete, and unless they make quick adjustments to the changing trends, they are bound to end up losing this battle. The biggest challenge for cable and satellite services providers is OTT.

Understanding OTT

OTT stands for over-the-top. It refers to content being delivered to end consumers utilizing over-the-top means. In simple words, a company lets you watch some TV content without requiring you to subscribe to its “TV services”. It does that by delivering you the content through internet. So, you might have an internet connection from Verizon, but some third OTT company can deliver movies, TV shows, documentaries, etc. using that Verizon internet connection even though Verizon has its own paid TV services too. Examples of some famous OTT services include the following:

  • Apple TV
  • Netflix
  • Hulu
  • Sling Orange
  • HBO Go
  • Amazon Fire TV

These services can deliver your favorite programs to your screen using the internet connection you have.

OTT vs. Traditional TV

Now, it’s OTT trying to camp in the lands owned by traditional TV. On the other hand, the TV service providers are trying to penetrate the realms of OTT. OTT service providers achieve their goals by allowing their viewers and subscribers to view content on any device that is connected to the internet. That’s more like compelling users to ditch their traditional TV. Traditional TV service providers are competing with that by allowing their services to be available on all the screens in addition to TV. The biggest advantage for OTT services is that there are different subscription models from which customers can choose. The three main VOD subscription models are TVOD, SVOD and AVOD.

  • AVOD

AVOD is ad-based or advertising video on demand. This is a unique subscription model in which users can watch the content for free. However, they have to agree to watch ads as part of the streaming. Since users cannot skip these ads, advertisers find this model quite attractive too.

  • TVOD

In this subscription model, you as a user will have to either pay to buy or rent the content. When you pay to rent, the content is available for you to watch for only a limited time whereas purchased content is yours forever for a onetime fee. TVOD is short for transactional video on demand.

  • SVOD

SVOD is the most well-known and widespread model. SVOD stands for subscription video on demand i.e. you pay a fixed monthly fee to access the content of your choice. Netflix is a good example of this model.

Being able to watch only the content that you like gives you a sense of freedom that has made OTT services very attractive for users. The variety of subscription models act as another great advantage that goes in the favor of OTT service providers. Since more native companies are expected to compete against the current OTT giants in the coming times, it is believed that users will receive even more useful content as “free content” in the coming times. However, these reasons are still not enough to say that traditional TV is dying.

Traditional TV Is Not Going Away That Easily

Yes, TV service providers have panicked big time after seeing consumers taking tremendous interest in OTT services. In the third quarter of 2016, the OTT industry saw a 63% YOY growth in the ad revenue. Moreover, in 2017 the number of American homes watching videos using OTT services increased to 51 million, which makes up nearly 54% of all the homes that have a Wi-Fi connection. Despite such exponential growth, traditional TV is not to disappear just like that.

First, OTT still relies on a broadband connection and not every country in the world has the best internet connection speeds. Most countries in Africa, South and Southeast Asia, South America, and Middle East don’t have the best internet speeds. For example, world largest democracy, India, has an average internet connection speed of only 2.3Mbps.

What makes matters worse for OTT is that many countries in Asia have very cheap TV cable service. For example, most TV cable operators charge Rs. 200 to Rs. 250 a month to their subscribers in India. That amounts to only 3.70USD per month. The cost of cable service is quite low in India’s neighboring countries as well.

You can safely say that OTT is not replacing traditional TV as quickly as some people might have guessed. Not to mention, high-speed internet connections can cost up to $20 to $30 per month in these same regions.

In the End

One must realize that no matter how attractive and appealing OTT services sound to the worldwide audience, they still rely on the internet connections that usually come from cable TV service providers. Whether it is Comcast or Verizon, OTT service providers will need their partnerships to reach out to their potential customers and penetrate new markets. If they start their own internet services, the concept of OTT will die and the company will have to ramp up its monthly costs to offset the infrastructural and operational costs of a full-fledged internet service.

Traditional TV and OTT might appear opponents on paper as they compete to garner more market share than each other. However, many experts believe that the two types of services will have to marry each other for a future that benefits them as well as the end users.

Sources

https://clearcode.cc/blog/ott-advertising/






No Comments




Add Comment

 
 

We use cookies (including third party cookies) to ensure you get the best experience while visiting our website. Click "Accept Cookies" to accept the cookie usage. Click "Cookie Settings" to adjust cookie settings.

Mandatory Cookies

These cookies cannot be disabled

These cookies are necessary for the website to function and cannot be switched off.

Cookies:
  • .ASPXANONYMOUS
  • .DOTNETNUKE
  • __RequestVerificationToken
  • authentication
  • dnn_IsMobile
  • language
  • LastPageId
  • NADevGDPRCookieConsent_portal_0
  • userBrowsingCookie

Analytics Cookies

These cookies allow us to monitor traffic to our website so we can improve the performance and content of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited or how you navigated around our website.

Cookies:
  • _ga
  • _gat
  • _gid
  • wooTracker

Functional Cookies

These cookies enable the website to provide enhanced functionality and content. They may be set by the website or by third party providers whose services we have added to our pages. If you do not allow these cookies then some or all of these services may not function properly.

Cookies:
  • __atuvc

Targeting Cookies

These cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Cookies:

Not used.