Your Guide to Start and Expand OTT Channels(I)

Demand for OTT channels is growing, consumer habits are changing, and it’s creating a clear impact on the OTT market. A recent report found that the global OTT market is set to grow by $77.73 billion between 2019 and 2023, increasing at a CAGR of over 13% during the forecast period. Whether you’re a pay-TV operator, a video content provider, broadcaster, or even a newcomer to the market, OTT channels represent an opportunity to expand your global footprint. An OTT channel can help you increase revenue and reach new viewers, including cord-cutters. In fact, it is predicted that by 2023, the number of pay-TV households in the U.S. will stand at 72.7 million, with cord-cutters estimated at 56.1 million.

Different kinds of OTT channels

OTT stands for over-the-top. OTT goes over the top of traditional access networks and makes it possible to stream video content over the internet to connected devices, such as smartphones, tablets, and smart TVs. Most OTT services are subscription-video-on-demand (SVOD) offerings that provide access to a comprehensive library of TV shows and movies. Examples of these kinds of services include Netflix, HBO Max, Apple TV+, and Disney+.

Another flavor of an OTT service is the skinny bundle. Skinny bundles are slimmed-down versions of traditional pay-TV television offerings. They include many of the linear specialty channels that viewers love, such as ESPN and AMC, streamed over the internet. An example of a successful skinny bundle service is Sling TV.

Pop-up channels are another form of an OTT service. Pop-up channels feature content that is only available for a limited time period. Take for example a live sports event, or specialized holiday content.

While live content has traditionally been delivered on pay-TV and broadcast channels, OTT has carved out space in the video streaming world, especially for live sports. Fans love the freedom of being able to watch a single event or a tournament and manage their subscription on a per-use basis, at a relatively low price.


The real difference between OTT and linear TV channels

The key difference between OTT and traditional linear TV is that OTT leverages the internet for delivery, which opens the door to personalization, regionalization, and other features that only the digital space can offer. Linear TV channels are scheduled viewing experiences transmitted via an over-the-air, cable or satellite network. The content is sent over the entire network, and each TV is getting the same content. With linear, it’s a challenge to personalize and to reach audiences that aren’t in front of the TV, in the right region, at the right time.

There is also a difference between the OTT and linear TV business model. Linear TV channels rely heavily on advertising. OTT offerings can also leverage advertising but provide more options when it comes to monetization.

There is also a difference in the viewing experience. Viewing choices are distinctive between OTT and linear TV channels. Considering that many of today’s viewers like watching content they want, anytime, anywhere, this can be a deciding factor for subscriptions. Research has shown that younger generations prefer OTT while older demographics such as Baby Boomers and Seniors desire the linear TV experience.

The media landscape where everyone can play

Today, it seems like everyone is getting into the OTT game. Thanks to readily available streaming solutions, both big and small players can easily access the OTT arena. OTT is no longer just for big companies like Netflix or Disney. Traditional broadcasters, pay-TV operators and major television networks, such as NBC, have also embraced OTT video streaming.

We are also seeing sports federations and leagues launching their own channels to reach local and regional audiences, as well as new audiences beyond their traditional scope. We now have smaller organizations and content owners that previously had no footprint in broadcast launching channels.

Consequently, the OTT landscape has become very diverse. In a traditional linear TV model, TV channels go through a middleman such as a cable or satellite operator to reach viewers. Now, with an OTT solution, you can offer VOD and live streaming to consumers directly. With the OTT business model, there is more control and greater opportunity for profitability.