Over-the-top video in 2012: trends and technologies to watch

Table of Contents

  1. Summary
  2. OTT’s three economic models
  3. OTT and the cord-cutting phenomenon
  4. Companies to watch (in no particular order)
  5. Where to from here?
  6. About Larry Gerbrandt


In the past few years over-the-top (OTT) TV has advanced from being an acronym for tech geeks to the new video frontier. It’s also the stuff of nightmare scenarios for many media executives.

At its simplest, OTT is the transmission of video programming directly to television sets and mobile devices (such as smartphones and tablets) using a broadband connection. The technology earned its appellation by going to viewers over and around the traditional closedvideo-distribution platforms built by wired cable operators like Comcast and Time Warner, satellites like DIRECTV, and telcos like AT&T U-verse (collectively known as multichannel video program distributors, or MVPDs).

While the most ardent proponents of OTT would like to bypass the traditional MVPD gatekeepers and use broadband to deliver any and all video programming directly to viewers, at least over the short term, it is unique, original and exclusive content that drives traffic and growth.

The rise of OTT can be tracked by the increasing importance of broadband subscriptions and the steady increase in connection speeds (now often in excess of 25 megabits per second, more than enough for multiple HDTV feeds) as well as the popularity of home networks and Wi-Fihotspots.

The Federal Communications Commission’s May 2011 report on broadband places U.S. penetration of broadband at 63 percent, though that number is likely higher now, given the rapid adoption of smartphones and tablets with 4G and LTE connections. The majority of fixed broadband subscribers are served by the cable industry.

Average weekly media time per person (hours: minutes)

Demo Demo Demo Demo Demo Demo Demo Demo
Media All ages 2+ 2–11 12–17 18–24 25–34 35–49 50–65 65+
Traditional TV 32:47 24:52 22:24 24:17 28:08 32:58 41:04 46:16
Internet on a computer 3:58 0:30 1:25 4:02 6:03 5:50 4:58 2:38
Timeshifted TV 2:21 1:50 1:29 1:30 2:57 3:07 2:42 1:42
Video on the Internet 0:27 0:07 0:21 0:45 0:50 0:35 0:23 0:12
Video on a mobile device 0:07 NA 0:20 0:17 0:12 0:05 0:01 <0:01

Still, there has been no erosion in traditional TV consumption, despite the emergence of Netflix, YouTube and Hulu. In its Television Audience Report 2010–2011, Nielsen reported that total weekly TV viewing per TV household had increased by more than an hour between 2010 and 2011, growing from 58 hours and 28 minutes per week to 59 hours and 28 minutes per week.

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