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1. What is OTT content?

Over-the-top (OTT) refers to the method of sending content over a high-speed Internet connection, instead of the content being shared by traditional distributors such as broadcasters, cable and IPTV operators.

OTT content is, in most cases, film or TV content which is watched on a phone, laptop, tablet or connected TV. Another example of OTT content is music that is streamed directly to a consumer’s smart speaker, phone or computer over the Internet.

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The amount people are watching OTT content is on the rise. Research from Effectv indicates that in the past two years, OTT usage has increased 81%. During this time, OTT subscription services and applications have been quickly springing up, providing easy access to the entertainment people want, on the device they want to watch it on.

Recent OTT service launches include Disney+, NBC’s Peacock, BritBox and HBO Max, which are now competing for your eyeballs against the more established OTT services such as Netflix and Amazon’s Prime Video.

The term ‘OTT’ implies that the content from an OTT provider is only delivered to the consumer directly over an Internet connection. However, in practice many services that are labelled ‘OTT’, such as Netflix or Disney+ are bundled into a single subscription from a service provider and are presented to the viewer as an integrated mix of content.

2. Why are more companies using OTT?

OTT services have risen in popularity over recent years as consumers have opted to ‘cut the cord’ from their traditional TV subscription services.

There are a number of reasons why:

  • There is the combined impact of higher bandwidth
  • Faster, Internet services to the home and via mobile networks
  • More sophisticated mobile devices with large screens and impressive graphics. 

With more digitally-savvy consumers to target, the first OTT services disrupted and challenged the traditional entertainment market. OTT content services initially emerged as the upstart competitor to the TV service provider, but were quickly embraced and are now integral to the on demand entertainment offered alongside linear broadcasting.

For content owners, having their own OTT app gives them an exclusive streaming ‘home’ for their content archives - Disney+ is a classic example of this - taking their catalogue of classic and newly released video content direct-to-consumer (DTC). OTT companies are in many cases content creators and distributors in one, much like the traditional broadcasters of old. 2020 has seen lots of great examples of ott content series.

Take a look at what ActiveVideo employees around the world say about OTT content in 2020.

3. Types of OTT content

OTT content usually refers to high quality film or TV content. However, other examples of OTT content include voice calling (VoIP), messaging or audio.

OTT video content: encompasses a broad range of entertainment, factual content, educational resources and lifestyle content such as fitness or travel.

OTT voice services: include for example services Skype or other VoIP services that are delivered over an Internet connection such as 4G or WiFi.

OTT messaging: includes services such as WhatsApp, Facebook Messenger, WeChat and Line.

OTT audio applications: such as music streaming services like Spotify or podcast and music sharing platforms such as SoundCloud.

4. What are OTT apps?

An OTT application is any app or service that delivers video content over the Internet to a connected device.

OTT apps for TV are predominantly created for Android, RDK, Roku, AppleTV, Amazon Fire or Linux/middleware platforms. They are made available via a storefront for download or pre-installed on devices such as media players, SmartTVs, HDMI sticks or set top devices. These OTT apps need to be designed for a 'lean back' experience using a remote control, rather than touch screen and swipe type control.

Access to video content via OTT apps is usually subscription-based or ad supported. There are thousands of OTT apps available globally.

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As well as the well-established entertainment and sports brands offering their own OTT apps, the flexibility of the OTT app model is opening the door to many niche offerings around the edge, for example based on specific genres such as comedy, regional content or other special interests.

5. How is OTT video delivered?

OTT video delivery leverages technology created for the web to securely stream video files stored on a server over an unreliable network where the bandwidth available may vary.

Pre-recorded content is stored on Content Delivery Networks (CDNs) distributed throughout the Internet.

When a consumer selects a video to stream through an App, requests are made to the local CDN to get a manifest file of the video chunks, as well as a request to the relevant Digital Rights Management (DRM) server for the media key to decrypt video chunks.

The process goes like this:

Step 1

The player on the device requests at least 30 secs of video chunks to fill its playback buffer using the manifest file information from the CDN.

Step 2

The CDN returns these chunks and the media key is used to decrypt the chunks ready for playback.

Step 3

The player will render the video chunks as long as play is selected to the screen.

Step 4

The player will continue to request video chunks attempting to keep its playback buffer full unless the viewer selects pause, or stop, at which point it will stop making requests.

The player is constantly assessing the available network bandwidth from the CDN to the device, if for any reason this changes it may request lower or higher bit rate video chunks in order to keep the player buffer with enough video chunks so it can continuously play video on the screen.

Ideally the player asks for the maximum bit rate available to maintain the video experience quality.

6. What are the challenges of delivering OTT media?

Creating an OTT content service is not just about creating or licensing content, but maximizing the reach of the content cost effectively.

Whether an OTT service is going Direct-to-Consumer (DTC) with their original content, or is licensing content to other OTT Content services, the question is how to maximize the reach across the most device types with the fewest versions of its OTT app, while maximizing their revenue.

Each of these objectives has options and tradeoffs which have implications for the OTT provider.

The unprecedented recent pandemic of 2020 has heightened this challenge, both in the supply of original content, and the demand to watch more content on-demand (on the subscriber’s timeline) on TV screens in their homes as well as other devices.

Find out how AppCloud can enable OTT content providers to deliver your content with a full app experience, across any network, to any client.

Download the brochure now

Whether traditional TV programmer, niche, art-house film, high-adrenaline sports, or mainstream offering is your goal, the content needs to be produced. There is a global industry involved in developing high quality, original programming - in 2019 in the US alone, it is estimated more than $100Bn and OTT content providers have become a growing producer of original content.

Viewers today expect content to be accessible from literally anywhere, and that throws a proverbial spanner in the works.

A viewer with a Paris address still expects to be able to finish streaming a movie they started the night before when they arrive in Rome. Historic geographic licensing rights can get thrown into disarray when the industry and governments do not share the same view of the world.

A degree of adjustment was required when the European Union legislated for the cross-border portability of content, across the 27 member states.

Quite apart from that, the concept of ‘owning’ content in an OTT world is not entirely as literal as it sounds. It makes for a difficult customer conversation when a ‘purchased’ movie is no longer accessible for streaming as they travel from one location to another due to limitations in distribution rights.

Viewers access OTT content via an app and client device, be it a set-top or connected TV, mobile device (tablet or phone) or computer. 54% of all viewing is through the TV - more than every other viewing method combined.

Apps developed for TV viewing are often hosted on a set-top or ‘smart TV’ - the user experience needs to be optimized and coded to the individual OS or middleware.

This means that a single app needs multiple variants each requiring cumbersome updates, certification and support to deliver enhanced functionality or compatibility with OS/middleware updates.

It becomes a desperately complex task requiring a considerable amount of time and development resources.

In practice it results in forced trade-offs between portability, user experience, and performance; inconsistent user experiences, and either a prioritization of devices and OS at the cost of not serving everyone or a focus on ‘lowest common denominator’ functionality so it works everywhere. Effectively these create barriers to market for an app and all are problematic.

Take a look at the video below where ActiveVideo CEO Jeff Miller and Colin Dixon from nScreenMedia discuss, what Colin describes as, ActiveVideo's "novel solution to the OTT app aggregation problem" which fixes app management issues, keeps content protected all the way to the client, with no compromise in performance. 

As apps and OS get increasingly demanding, they can outpace the memory and processing capabilities of the hardware - especially where replacement cycles of a set-top or TV are much slower than say a mobile device. That means viewers can no longer access apps unless they upgrade hardware. This limits reach for OTT content providers and presents persistent problems for operators.

Solutions such as ActiveVideo AppCloud go a long way to address these issues by supporting the operation of existing Android Package Kits (APKs), running in the cloud, within a virtualized platform while maintaining media streaming directly to the client device.

This means development is for a single platform and with the infinitely scalable processing power placed in the cloud instead of the device, the latest version of the app can always be delivered, irrespective of device and OS.

So you have the content, the licensing, the app and distribution. So how do you make money in the OTT content world?

It typically falls to one of three models:

  1. Subscription VoD (SVoD a monthly or annual subscription fee).
  2. Advertising VoD (AVoD - Incorporating advertising during playback).
  3. Transaction VoD (TVoD - the virtual ‘buy’ or ‘rent’ in the OTT world) on top of any geographical licensing to other OTT services.

With overall revenues expected to double from 2019 to 2025 and over 100% growth in SVoD and AVoD, the complete OTT content distribution chain is looking to capitalize on this.

The growth of App stores and super aggregators means for each of these models approaches to share in the available revenues will be critical, however, it must be attributable and reconciliation automated and reputable.

For SVoD the ability for different entities to provide direct billing for services allows for single billing providers for an aggregated set of services.

For AVoD the ability to allow multiple parties to ‘sell’ available ad inventory in real-time, pre, mid and post-roll and within app digital ads will be required for AVoD services to expand their reach and usage and revenues.

7. Simplifying OTT content delivery for TV

How does ActiveVideo AppCloud help operators to deliver OTT content?

AppCloud - Green on Grey copy

ActiveVideo developed a cloud-based platform called AppCloud to directly address three key challenges for operators:

  1. Many set-tops and Smart TV devices don’t meet the processing and memory demands of OTT apps, requiring a new set-top, a third-party OTT device, or an HTML5 app back-ported to the current device.
  2. The complexity and cost introduced to the development life cycle by supporting a single OTT app across multiple hardware and operating system configurations adds to extended development time, cumbersome updates, and inevitable, inconsistent user experience across platforms.
  3. Most operator-tier solutions today provide a holistic solution at the expense of control over app selection, user experience, and account ownership.

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8. How does OTT app development for TV work?

OTT app development for TV is very similar in many ways to developing apps for mobile devices, except that the user experience has to be designed for a lean back experience with remote control or voice command rather than touch screen, swipe, and virtual keyboard entry.

There are more OS environments for developers to consider in developing their OTT app for set-tops, TV and streaming devices.

For each of these OS environments there are often many variants of device manufacturers and the inherent physical hardware and firmware variations that further magnify the challenges for developers of cost effectively developing and managing OTT apps.

These devices have less memory and often processing capabilities than a mobile device and are designed primarily to provide very high quality video playback to a large TV screen.

What every OTT app developer is looking for is how they can develop, test and maintain the fewest versions of their OTT app while reaching the most households, eyeballs and people.

9. How does AppCloud streamline OTT app development for TV?

OTT Operators

Expensive development and support costs, potentially lengthy time-to-market and inconsistent cross-platform user experiences, are major issues for operators when providing OTT apps to their customers.

They typically have three options:

  • Develop a version of the app targeting the current generation of set-tops and Smart TVs - Usually in HTML5.
  • Update the device and implement a bespoke version of Android OS.
  • Update the device and implement a 3rd party OS such as Roku or Android TV Operator Tier.

The second and third options are costly and often only service a small proportion of the install base. What’s more, as the demands of OTT apps continue to increase, it’s likely to leave operators in the same situation three years from now.

The first option maintains control and leverages existing hardware however the cost of app development falls upon the operator, carrying substantial development costs, often exceeding $1m per app.

AppCloud overcomes these issues by design, enabling operators to deliver the latest version of an already-developed APK to their customers, while avoiding the complexity and cost of supporting OTT apps across multiple hardware and operating system configurations.

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OTT Content Providers

For OTT providers, AppCloud can directly help streamline the development of apps by:

  1. Reducing the number of platforms an OTT provider needs to support: AppCloud helps overcome the need to develop and maintain apps on multiple OS and middleware, meaning development resources can focus on one OS - Android, dramatically reducing overall budget.
  2. Overcoming the hurdles of porting and certification to different devices: As AppCloud leverages the existing APK, there is no need to undertake the time consuming and costly process of porting, certification and updates to multiple clients.
  3. Free the app from limitations of hardware: As AppCloud runs apps in the cloud, performance is no longer limited by the capabilities and capacity of the set-top. This means apps do not need to be designed to lowest-common-denominator hardware and the best-in-class performance and user experience can be delivered every time.

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Find out more about AppCloud

To see how AppCloud could help you to deliver a full OTT app service and experience, across any network, to any client, click the button below.

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