2014: When OTT apps became important

The text message has not yet been killed, but it may be injured. In 2014, Over-The-Top (OTT) Apps dominated the consumer, media and political landscapes. They played vital roles in diverse places. FireChat helped crowds in Hong Kong orchestrate effective protest during the Yellow Revolution. WhatsApp became a tech giant of Wall Street following a $16 billion takeover. Snapcash emerged a new m-commerce option. OTT messages were sent more regularly than SMS in the UK. Perhaps the greatest sign of change however? The evident decline of SMS. Despite the huge growth in smartphone ownership, the number of SMS’s sent since mid-2013 has virtually plateaued.

So what are OTT Apps and was 2014 a turning point? Over-The-Top applications are apps or services that provide a product over the internet, evading conventional delivery. As for whether 2014 was a turning point? Well, not exactly. Nonetheless, we now at least have to pay closer attention to OTT’s increasing prominence.

Text messaging will still obviously play a role in our lives. Smartphone penetration is not ubiquitous. OTT’s demographic is overwhelmingly young. Additionally, in the developing world mobile web still dominates. Even in merry old England, OTT has its limitations. If curious as to why; ask anyone who has ever tried to contact somebody when 3G or 4G isn’t active.

But to ignore OTT would be to swim upstream. Juniper Research suggests up to $14 billion is lost by mobile carriers due to OTT. There is no longer demand for the text services previously offered. Technological innovation has bypassed consumer need for many of their charged services. Facebook recognised these winds of change. Zuckerberg’s $16 billion takeover of WhatsApp is in one part the acknowledgement of a potential future rival to the company’s messaging dominance. It is also another part recognition of the huge value WhatsApp offers in keyword targeting data to advertisers. The irony of FireChat’s use to circumvent government tracking in Hong Kong, is that its greatest value comes from this commercial monitoring.

The rise of OTT has also transformed the mobile customer. To Generation Z who have grown up under unlimited contacts, social networks, music streaming sites and now OTT, free messaging becomes not a luxury, but an expectation. This extrapolates to other saleable areas. Data is now increasingly expected to be unlimited. For this reason AT&T and Verizon have doubled the available data usage to select consumers in the US at no extra cost. The modern consumer does not expect the boundaries of free services to just be pushed. They expect them to be blown up.

So if 2014 was the year OTT became important, what does 2015 hold? At this current juncture it is difficult to say. It is hard to assume anything other than continued growth. Particularly, as consumer concern over government surveillance increases and messaging services become more available and publicised. Yet, there are concerns. Late 2014 revealed a bug in the intrinsic workings of WhatsApp which could crash the app. Public reluctance to m-commerce ventures remains significant. Younger individuals are becoming bored with standard OTT offerings. They expect more in return for their attention.

How OTT will progress therefore remains a mystery. What is clear however, is it is an important mystery the tech and marketing sectors cannot ignore.

This article was written by Matthew Dow, Mobile Executive at Fetch.

Originally published at wearefetch.com.