OTT and CTV have created a lot of buzz these last few months, with some interesting headlines popping up. The increased investment from content providers and an overall increase in consumption from audiences had a lot to do with this exposure. But what is the difference between these two?
Over the Top (OTT) TV delivers content independently of a cable or satellite subscription across internet-enabled devices.
Connected TV (CTV) is a type of OTT TV consumed specifically on a large-screen, internet-enabled TV.
Let’s look into 2018 before we move forward, as it marks a turning point for OTT providers. It was the first year that more households in the United States had this kind of service instead of regular cable or satellite. Around 69% of Americans were subscribing to one or more OTT services, while 65% still had an active cable or satellite subscription. Sure, there is a 43% overlap, but it still shows a significant shift. Moreover, it represents an opportunity to take advantage of a market that is still in the early stages of growth.
In the past year, OTT ad revenue was 73 percent higher than in 2017, and an additional 25 percent growth is projected for 2019. This means about $2.6 billion in revenue for the year, up from $1.2 billion in 2017. In addition to all of this, a significant number of media companies and tech giants started to expand into the market. AT&T, with its acquisition of Time Warner, is a prime example of that and is actively exploring ways of getting a piece of streaming action with its new brand, WarnerMedia. Add this to Disney laying out the plans for its upcoming Disney+ streaming service and Apple launching Apple TV Plus, and the shift becomes more than just a trend.
With an all-out arms race to claim the top spot in the “streaming wars”, several business models have surfaced. Netflix and Amazon Prime Video, for instance, have over 250 million subscribers combined, yet neither supports advertisements. On the other hand, Hulu, an ad-supported video on demand service (AVOD) that reigns supreme among its competitors, has only 28 million subscribers to its name.
Of course, there are others who simply offer their services for free, albeit having ads. Tubi or Pluto TV, for example, have gained a significant market share by providing licensed content from major TV and movie studios.
Audiences are getting a sense that there is an offer for every taste. Hence, in order to thrive, you will need to find an exclusive audience. A differentiating factor, which you will add to your more general offer. Maintaining a linear-only TV strategy will alienate a significant segment of cord-cutters, many of them being younger and more affluent.
There’s no way of getting around the OTT trend or, dare we call it, movement. To get the most out of this fruitful ground, you need to be wise on your marketing decisions and optimize strategies. With an Online Video Platform, like WeCast, you can do exactly that with the greatest of eases, taking one more hassle out of the way and focus on the landscape at hand.
Is your strategy ready for linear and OTT TV delivery? Find the right partner for your business and learn more at the WeTek website, a company not only dedicated to providing tools for any video distribution segment but also an expert in providing consultancy for your business strategy.
Infographic information by Koeppel Direct