12. What is OTT?

Consumers are adopting over the top, and smart marketers are paying attention to the shift that’s underway.

Over the top media has revolutionized the television industry. In the United States, according to eMarketer, nearly 52% of the population was expected to subscribe to OTT video services in 2018. In other words, consumers are adopting over the top, and smart marketers are paying attention to the shift that’s underway.

Over-the-top consumers stream content to their screens —  a TV set, a tablet, their smartphone, etc. — via the Internet using apps or a separate piece of hardware rather than a cable or satellite source.

OTT media comes from individual content providers who license and create programs that consumers can watch within a proprietary app, or through an app that aggregates different providers’ offerings. Examples of OTT services include Netflix, Hulu, and also legacy cable channels that have expanding into the over-the-top space, including HBO and Showtime. Other entrants into the OTT space include Disney and CBS. 

Over-the-top services create revenue in several ways. Consumers sign up for either subscription video on demand (SVOD), ad-based video on demand (AVOD), or transactional video on demand (TVOD).

Netflix is a prime example of SVOD. Basic YouTube is an example of the AVOD model. Apple’s iTunes store for movies and TV shows is an example of how TVOD can work in the OTT space. Also, some services blend the possibilities. Hulu, for instance, offers both AVOD and SVOD options depending on the consumer’s subscription tier.

As Marketing Land reports, 45% of surveyed marketers are looking to OTT for significant campaign opportunities. Agencies and brands are similarly looking at over-the-top’s potential within the multi-touch and cross-device landscape.

The challenges that marketers must overcome to capitalize on OTT’s promise will, as always, come down to a mix of attribution, verification, and the demand for premium-quality media.

Advertisers who seek out technology partners that can help them follow the OTT consumer across their streaming-content journey — gathering and analyzing consented data to better understanding behaviors, movements, and likely next steps — will be the advertisers who win spend in the OTT space.

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