If you have noticed the decline of TV and been using OTT for a period of time, you wonder why is TV moving to OTT?
In 2018, only 65 percent of households in the US subscribed to a cable or satellite, showing a continuous decline in recent years. Most households spend more time streaming content than watching cable. About 74 percent of households are subscribers of at least one streaming service, while the average households are subscribers of three or more IPTV services.
Has television finally been taken over by OTT advertising? Are you curious about how to improve your OTT strategy? Do you want to update your streaming business? Keep reading and discover the answers.
What is OTT? Over the Top (OTT) is streaming content. Rather than watching traditional cable where programming is being controlled, people who subscribe to OTT services have the freedom to choose what and when they want to watch the content.
In most cases, OTT advertising is played before, in the middle, or after the program. For instance, businesses can position their brand in front of popular shows followed by their target audience or their ads alongside films that their target audience enjoys regularly.
5 reasons why TV transitions to OTT
People are increasingly taking advantage of OTT companies from traditional TV services for daily content consumption. So, here are the reasons why TV is moving to OTT.
Convenience and cost-efficiency
Many users enjoy the convenience that OTT services offer. They can select what content they wish to watch or even what time they want to watch. Plus, they can pause or replay the content. An IPTV provider usually offers less expensive services than traditional cable services.
Easy ad interaction
The majority of consumers find it easier to interact with OTT advertising campaigns. This content medium is watched across different devices. Users stream content during their breaks at home, while performing household chores, or during their daily commute. In return, they tend to see those particular OTT advertisements more than when on television.
OTT ads also offer convenience. The audience does not have to assign those ads during a particular time slot. As many as 76 percent of people watching streaming content use ad-supported services since they pay less. Millennials often spend up to seven hours daily streaming content on their mobile devices, which gives businesses a better opportunity to connect with their prospects.
Higher engagement level
OTT promotes a higher engagement level from users interacting with the ads. Users usually use their mobile devices while streaming content, allowing them to respond to the ads immediately, whether by visiting the business website, answering a question, or making a purchase on the spot.
The immediate response helps raise sales while improving the overall return of the OTT ads investment. Since users may also utilize their mobile devices while streaming on the large screen, businesses still see results regardless of how users watch the content.
More personalized content
OTT and streaming provide more personalized content than TV ads. Businesses can target their ad campaigns more directly to their preferred audience and present them with the content they are most likely to get engaged with.
Ad expansion
Businesses looking to expand their advertising can use OTT as an effective medium to improve their reach. OTT advertising targets the preferred audience better than other platforms. In return, advertisers can deliver exactly the content the users expect from the IPTV companies.
OTT enables better insights about the users, including their watch history, gender, location, likes and dislikes, devices they use, etc. The data collected can be used by the sales team in creating relevant videos necessary for increasing engagement.
Why is OTT platform a must-have service for operators, ISP, MSO, and broadcaster?
ISP, multi-system operators, or broadcasters used to be dependent on DTH platforms and cable for distribution. However, the introduction of OTT cut out the middleman while directly reaching their target audience.
Users only need a device like a smartphone, tablet, or smart TV and an internet connection to watch any content anywhere at any time. Since businesses are not dependent on a middleman, they get paid from the users directly. They can integrate the payment gateway and then receive the money directly into their bank accounts.
Setting up a TV channel is expensive, where uplinking and downlinking charges, content delivery fee, carriage fee, distribution fee, etc., should be paid. These costs can reach thousands of dollars monthly. If they wish to broadcast to new geographies, they must pay the additional downlinking and carriage charges.
However, if they take advantage of OTT, they do not need to pay any of the mentioned charges. The cost of setting up, launching, and managing multi-device OTT services is lower than the cost they have to pay with launching and maintaining a cable TV channel.
MSO service provider, ISP, or broadcaster have an entirely new way to generate revenue from OTT and streaming. They can also upgrade their outdated video deliveries with a host of expanded services, including multi-screen options, such as smart TVs, tablets, and mobile.
OTT offers an additional way to monetize the content. OTT businesses can charge the subscribers, monetize with a hybrid model, or run advertisements. If they plan to run OTT advertisements, they can get ad tags from direct and programmatic advertisers and then deploy them in the ad server. They can go for a platform that comes with a built-in ad server for easier management of the ads in a single place. When charging the subscribers, they can integrate the chosen payment gateway with the service and get paid directly.
Here are other advantages OTT companies can enjoy:
- Fast and hassle-free deployment of IPTV/OTT services
- Option to move on-prem anytime, when necessary
- Fully managed service model alongside bug fixes and latest updates
- Flexibility and customization
- Easy integration with the current subscriber management system
- Low upfront cost, where only the necessary IPTV/OTT servers upfront is paid
- Advance monetization tools
- Stream videos on-demand or live
- White-label applications and web portals
Conclusion
OTT is considered the future of TV, where viewers prefer OTT services over traditional cable TV. So, it is no surprise that cord-cutting became a real concern for MSO, ISP, or broadcasters as OTT adoption among users has been quite fast.
Story by Stacy Chabo
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