Over-the-top (OTT) marketing is rapidly growing, as they are an effective method to reach the target audience.

So where do the terms like VOD and OTT apps/ services fit? This blog gives a quick overview of the OTT and how mobile apps can take overall advantage of the OTT. 

Overview of OTT

An OTT (Over-the-top) application is a service or an app that bypasses the traditional distribution and offers service over the internet. Though OTT is highly used in almost all industries, they are highly beneficial for the media and entertainment industry. Over-the-top is generally referred to as services that are over streaming services. In the present scenario, OTT is used as a replacement for traditional infrastructure for streaming the content. 

In short OTT application is anything that interrupts traditional billing models from cable/satellite companies. Some of the popular examples are Netflix, Hulu, and Skype, the first two examples could replace potential TV providers.

How does OTT (Over-The-Top) work?

OTT uses the open internet instead of unmanaged networks, and carry out the content transportation with support of standard internet protocols. The cost of desired network infrastructure incurred by the service operators can be avoided for service delivery. Rather, OTT invests in Adaptive Bitrate (ABR) and Content Delivery Network (CDN) for best UX. These two are the key building components for effective OTT delivery. 

Adaptive Bitrate (ABR) ensures best UX and supports insecure video streaming across multiple networks 

Content Delivery Network (CDN) supports in delivering content for multiple browsers, mobile devices, set-top boxes in a cost-effective manner.

Why is OTT (Over-The-Top) important?

Though OTT is a new phenomenon, there is potential growth as several companies are entering this space. This results in a wide range of options for customers, and a rise in the number of ad inventory for marketers. Since several customers are moving towards online media consumption, OTT services could be the best way to reach them. The possible method to take the benefits of these platforms remains unseen. 

There are certain OTT apps that make use of the internet as a replacement for cable television, cellular service, and financial services. 

Three variants of OTT (Over-The-Top)

The OTT can likely be seen in three distinct variants:

1. OTT Services: OTT service is the replacement for the apps that had been managed using tangible materials. For instance, in the traditional stock market, the stockbroker will physically shout the prices of the share that they are willing to sell or buy and the party would accept the deal if the price fits in his budget. Whereas, in the current era all the stocks are purchased instantly. 

2. Content and Message Delivery OTT Apps

OTT apps have a huge impact on the cable provider’s business. Streaming services such as Netflix, Hulu, and Youtube have become more popular and are accountable for millions of people cutting the cable providers pay for content delivery. These are sometimes termed as VOD (video on demand). There are certain other OTT apps that make use of the internet to send SMS and MMS messages. In earlier days, SMS and MMS had been sent using cellular service, but today with the advancement of Whatsapp and iMessage, passing over the message becomes easier whenever the mobile device is connected to the internet. 

3. OTT Devices

OTT devices such as Chromecast, Roku, and Fire Stick lets the users watch their favorite content onscreen as it streams content on the screen and helps in developing more over-top-technologies. Furthermore, these devices aid in the development of more (OTT) over-the-top technologies. 

Benefits of OTT Apps

Saves infrastructure cost

There are several benefits to using OTT apps that are beneficial for both customers and businesses. These apps allow multiple marketing structures, payment structures, and options compared to traditional business models. 

OTT app service can purchase the license to broadcast any sports events or any other events from the broadcasting infrastructure networks. In this way, the business can save a lot of investment in resources and equipment. 

Highly Targeted Advertising

These platforms made a huge transformation in the field of advertising, as it offers multiple methods to match the ads with the target audience. In the past, advertisers couldn’t really track the number of people who viewed their ads or any consequent action of the ads. With the help of OTT products, advertisers get the power to target ads and track their responses. The advancement of OTT could bring more tools to channel the ads and track their engagement. 

Customer Segmentation

With more precise data, OTT apps enable the marketers to segment their customers more accurately that includes live user segmentation. For instance, let’s consider the data segmentation in Podcasting. In the past, radio towers emanated frequencies, but they never had any data regarding who was listening. Whereas, in podcasts, people can get to know about the information related to the number of live customers along with details including device types, geography, episode retention, etc. 

Cost-effective 

OTT apps are able to leverage existing technologies because they are more cost-effective. Several customers prefer to opt for OTT apps because they find it inefficient to pay huge money for multiple TV channels that are usually unwatched. Instead, they prefer to pay for their favorite channels or the ones they usually watch.

OTT vs. VOD 

VOD is Video-on-demand, which requires a cable subscription to view the content or delivered through an internet connection. Customers should authenticate the TV provider subscription to use the VOD service such as HBO, GO. OTT is a subset of the VOD category, but as mentioned above there is a category where it requires user subscription.

In the case of OTT apps like Netflix and Hulu, it doesn’t require any subscription and offers the content over the internet when demanded. This is the main difference between OTT and VOD. 

Categories of VOD 

VOD can further be broken down into various subcategories based on the business models. Here are some of the categories of Video on demand. 

1. AVOD (Advertising video on demand) is a device that supports ads and these are usually free to watch. YouTube is an example of AVOD  

2. SVOD (Subscription video on demand) offers access to the content for users with a recurring fee. Netflix is an example for SVOD

3. TVOD (Transactional video on demand) follows the pay-per-view model. Amazon Prime Video is an example of TVOD. 

Takeaway

The marketing strategies and channels are changing continuously. The same strategy won’t work for a long time and for all mediums. To attract customers, marketers should understand the on-going trend that moves towards cost-effective and convenient tools and platforms.  There is a lot to explore in the OTT space as it can fuel the growth strategies for mobile apps.