The Impact of Internet-Enabled Television Sets in the Over-the-Top Video Markets

By on Mar 10, 2012 in Gadgets |

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If you haven’t heard of “over the top television” or OTT, then there’s no better time to familiarize yourself with it than now.  This type of service, although almost non-existent in 2010 may very soon take over the television market.

Also known as Internet TV, it’s the next step in terms of how television is experienced in the home. Internet TV presents much more variety in terms of how audio visual content is controlled, and offers much more personalization to that effect.  Content is delivered by a streaming service either live, or on demand.

OTT’s Beginnings
Audiences have been enjoying online-delivered television for quite some time; over 15 years, in fact. But this form of viewing was only available from telecom companies and internet service providers. The costs associated with delivering content in this way were high at the outset, because consumers would need a device which was created and branded by the provider to access the content they wanted. As well, content would have to be packaged and licensed before it could be delivered to the consumer.

It wasn’t until sites like YouTube came online that the demand for sharing and watching online video became apparent. Since then, many sites have come into existence that allows consumers to watch on demand, such as Netflix and Hulu.

What OTT Does
OTT-enabled televisions, or smart TVs, allow viewers to watch internet content. Delivered by a residential internet connection and not the more traditional cabled connection, OTT bypasses the services of traditional TV providers.  While these televisions have not yet achieved market penetration as of yet, streaming media players like Roku and Boxee are bridging the gap.

OTT services can include anything from Netflix to YouTube, which are both available via a home computer, but become more integrated when coupled with a TV set or top box that is enabled for internet content.

OTT Video Adds New Dimension for Consumers and Broadcasters
No longer are consumers waiting for their favorite movies or program episodes to be aired. Now, technology has placed the viewer in control of what, when and how they watch. Set top boxes allow for the total management of all video content from any room. Personal technology in the form of tablets and smartphones now allow viewing to take place outside of the home.

But the advent of OTT adds another layer to the experience, making internet content available to consumers, as well as a new market available to broadcasters. Because the geographical and operator barriers to the process of creating a television channel are eliminated with OTT, broadcasters can deliver content to consumers directly.   This ‘open market’ style of broadcasting allows content owners of any size to reach consumers, a privilege previously reserved for larger companies.

And not only can consumers access their content using virtually any means they like, but they can also free themselves from having to purchase a particular device or set top box on which to view their content. As OTT has evolved, the number of available independent boxes and apps with which to view it has skyrocketed.

Social media also plays an important role in the popularity of and loyalty to OTT; consumers can check out content recommended by their friends, and even filter the content they receive based on those recommendations.

Impact of OTT Expected To Be Huge
A recent study conducted by IDate predicted that the market for OTT services will be at almost five billion dollars in just 3 years.

This is due in part to the costs to companies to deliver OTT services; traditionally, investing in the programming offered by traditional television is much more expensive. The speed at which technology continues to evolve, coupled with the growing demand for new technology has also resulted in lower prices for consumers.

Jesse Schwarz enjoys researching and writing about technology, including anything related to broadband ISP services. This article was written by a guest author. Would you like to write for us?