Have you heard the latest about OTT?

  • OTT has fundamentally changed the way people view content!
  • OTT has toppled the titans of broadcast and cable!
  • OTT’s helping build and grow businesses! 
  • OTT’s the next big thing for influencers! 

You’re probably thinking, “That’s awesome. But what is OTT? And how can I put it to work for me?”

Let’s take a look at OTT’s meaning, where it’s been, where it’s heading, and most importantly, how companies and individuals can tap into the opportunity.

What is OTT?

First things first, what does OTT mean? It stands for “over-the-top,” as in over the top of TV (back in the 2000s when TV was a 32” box on a stand). The long-standing OTT definition is entertainment media streamed on the internet, bypassing cable and broadcast gatekeepers.

Still not sure what it is? The big four over-the-top media companies are Netflix, Hulu, Amazon, and most recently Disney+ — the cord-cutting mafia that took viewers from cable TV to online apps.

What does OTT mean?

OTT (or “over the top”) is a service that streams video through the internet to any device, bypassing traditional broadcast, cable, and satellite platforms.

Ahh… yes. So why is that such a big deal?

Not to be too grand about it, OTT has fundamentally changed how people access and view content. Thanks to OTT, consumers have gained viewing independence from:

  • Location. Moving us out of the living room.
  • Device. Imma watch on my TV, my laptop, my iPad, and my phone.
  • Time. Some of us binge-watch til 3AM, TYVM.
  • Low choice. Bye-bye true crime docs when I just want British baking.

OTT has put consumers in the front seat of content consumption, and they’re quickly changing where that car is headed.

Given this rapid state of change, the OTT you read about 5 years ago is not the OTT of today. Dynamic technology, behavior, and monetization trends have led OTT beyond the Hulus of the world. It’s now a lucrative tool for brands, small businesses, and influencers looking to build their businesses, expand their audiences, and increase revenue.

Changing audience behaviors is a boon for OTT.

Look around at all the people not looking up from their phones. OTT has had a global impact on the way creators and audiences think about streaming content. 

Consumers are binge-watching videos thanks to some awesome content available anytime, anywhere. We not only sit back and watch an entire season of Stranger Things over a weekend, we also look for (and then binge-watch!) content on niche topics like Battle Royale gaming or DIY house repairs.

The COVID-19 pandemic has created even more changes in viewing behaviors. We’re living, working, and playing at home. Nielsen reports that staying put in our homes can lead to almost a 60% increase in the amount of content we watch.

What’s more, in the second quarter of 2020, Nielsen reported that the cumulative weekly time spent with streaming video increased nearly 75% (from 81.7 billion minutes in Q2 2019 to 142.5 billion minutes Q2 2020).

75% increase

in time spent watching streaming video every week from 2019 to 2020.

OTT and our new normal.

Rather than going to the gym at 5AM every morning, we’re exercising in our living rooms at lunch or between Zoom meetings. We’re attending religious services from our patios. We’re watching live-streamed concerts and on-demand performing arts in our jammies on the couch. While some have considered OTT to be a millennials play, viewing habits are changing across every age group.

The extra at-home downtime means we’re also seeking out learning opportunities and finding them in streamed classes and how-to series. According to Forbes, streaming content has jumped by at least 12% during the COVID-19 outbreak. This shift isn’t short-term. It’s a life-changing shift for more streaming.

We need content that hits us where we live (and work, and learn, and play).

Streaming is no longer a young person’s game. The behavior has been adopted more widely among those aged 55 and up, garnering a 26% share of the streaming audience [up from 19% in second quarter 2019].

Peter Katsingris, SVP Audience Insights, Nielsen

Not surprisingly, OTT is experiencing exponential growth. At Vimeo, we’re seeing 5X more OTT channels created in 2020 than in 2019, and 20X more subscribers to those channels. The number of paid OTT subscriptions in the US is expected to grow over 50% in the next 5 years, from 199 million today to 307 million in 2025.

More OTT viewers means a greater variety of interests and expectations for content creators to fulfill.

50% increase

in OTT subscription growth is expected by 2025.

More opportunities for more creators.

Engaged OTT audiences seeking out, subscribing to, and binge-watching content gives creators any number of ways to expand their brands and businesses. These independent creators are the future of online video:

  • Social influencers looking to expand beyond YouTube and Instagram, move their most engaged audiences to a high-level viewing experience, and monetize their content.
  • Solopreneurs looking to build a business from their personal passions.
  • Small businesses looking to pivot to a digital-first experience to reach customers directly.
  • Brands looking to find new outlets to expand their reach, engage prospects, and turn customers into loyal brand advocates.

What’s the attraction for these smaller content providers? Simply put, it’s technology and income.

Discover more creator stories.

Check out these independent creators monetizing their content with OTT.

Making OTT accessible, for everyone.

If you’re thinking “Hey, I’m a content creator, not a tech wizard,” don’t freak out. You don’t have to hire a large tech team to launch a streaming service and develop apps to get your content seen. OTT video platforms like Vimeo make it easy for creators to:

  • Build branded channels and apps. 
  • Create high quality viewing experiences.
  • Stream content wherever their audiences are.
  • Easily monetize content and process payments.
  • Manage content and digital rights at any scale.
  • Measure success with in-depth analytics. 

With the technical needs covered, OTT is now a creators’ world.

What do I need to launch an OTT channel?

First, you need great content that people want to engage with. Once you have a growing library of good stuff, choose a turnkey OTT platform to handle the tech for you so your audience is guaranteed a killer viewing experience.

OTT video monetization

What does OTT mean to this new wave of content producers? Content monetization (you know, a paycheck). And they’re definitely on to something. Overall, the OTT market is set to reach $167 billion in revenue by 2025, and now’s the chance to get a piece of that. 

An image of global currency symbols yen, dollar, pound, and Turkish lira

OTT lets you go far beyond the revenue creation abilities of a basic streaming channel using: 

  • Subscription Video On Demand (SVOD) for ad-free, high-quality content
  • Transactional Video on Demand (TVOD) for special promotions and offers
  • Ad-supported Video on Demand (AVOD) for free, ad-supported content

Subscription video on demand 

SVOD is a smart choice for content creators, letting viewers pay a monthly or annual fee to access video content. It offers stable, recurring revenue to anyone with great content and engaged audiences. Netflix and others have proven that viewers are hungry for excellent content, and willing to pay for it. What kind of revenue are we talking about? Total OTT SVOD revenue was $48 billion in 2019, according to StreamingMedia. It’s no surprise that SVOD made up 58% of OTT revenue in 2019, up from 41% in 2015. This model works.

The COVID situation offers an interesting combo of SVOD options. In-person instructors who have had to move classes online can use SVOD for their online classes today. Post-COVID, when they go back to in-person classes, they can create a supplemental digital content series for a second revenue stream. For example, a yoga instructor who has taken her class on-line this year could have next year’s in-person students subscribe to an at-home meditation and mindfulness series.

Transactional video on demand 

TVOD monetization is where a viewer pays for a limited viewing offer (think access to a single video, or a series viewable for a limited time). TVOD offers can be made on any type of OTT channel or app, and it can offer an added revenue boost to SVOD platforms. It just takes some smart thinking and offers that promote your brand. If you’re looking to gain viewers, you could offer a free trial letting potential audience see for themselves that your content is worth a subscription. 

It bears mentioning that Live Pay Per View, or PPV, can be an effective generator of additional revenue. Live PPV enhances SVOD offerings with special paid events, and that content can be used as TVOD after the live event is over.

Ad-supported video on demand 

But don’t count AVOD out. In this model, advertisers pay you to place ads in your content where viewers will see it. While it’s not the simple and stable SVOD revenue stream, ad-supported content is a very real opportunity for many types of content providers.

Deloitte has stated that 62% of U.S. consumers (65% since COVID-19) want access to cheaper, ad-supported streaming video options. Depending on the content you create and your audience, AVOD might be the right model for you.

Ready for a deep dive?

Get the low-down on how to monetize video on demand using SVOD, TVOD, and AVOD.

Real-world OTT examples.

Is all this making sense in theory, but you need to ground it in reality? Let’s look at some real-life stories of today’s OTT content creators.

Millionaire Hoy: From YouTube to OTT.

An image of Millionaire Hoy's Vimeo OTT fitness channel

Millionaire Hoy moved his fitness boot camps from in-person instruction to a YouTube channel, growing his audience to over 288k global subscribers. He realized that changing to a subscription model on OTT would let him monetize his content, protect his work from freebooters, and avoid some of the built-in hassles of YouTube (e.g. search algorithm hacking).

What he hadn’t expected was for a paid subscription to bring him closer to his most engaged content followers, and allow him to streamline and tailor his content to the needs of his most avid fans.

Thanks to a full suite of branded apps on iOS, Android, Apple TV, Android TV, Amazon Fire TV, Roku, and Chromecast—as well as Tizen and Xbox—he’s able to reach his most ardent members with a high-quality fitness experience.

Since switching from YouTube to running my own subscription, I’ve been able to have more time with my family, focus more on what my subscribers want and need, and earn more revenue.

Millionaire Hoy, Founder, HoyPro.com

His approach is working. At a subscription rate of $19.99/month, he has seen a 55% increase in his SVOD subscriber base since leaving YouTube. Millionaire Hoy has successfully built on his social media success to create a profitable OTT-based business out of his passion for fitness coaching.

Prodigies: A small music company scores big. 

An image of Prodigies' music instruction channel, hosted on Vimeo OTT

Prodigies is a small company serving niche content that offers parents and educators an affordable and engaging way to teach children music.

As a three-person company, they chose OTT over other video streaming options because of its ability to boost their reach, offer a high-quality experience to their customers, and create a steady revenue from annual and monthly subscriptions. However, when they reached out for a quote to create their own OTT app, they got a dream-ending estimate of almost a half-million dollars! Luckily, founder Rob Young heard about Vimeo and realized he could easily and affordably get everything he needed to expand his business through OTT.

All of a sudden we were going from a rinky-dink, three-person team, to a mini Netflix. It’s a total game-changer. Rob Young
Founder, Prodigies

Now Prodigies distributes its content across multiple channels and apps, providing easy access for the more than 2,500 Prodigies members—from parents occupying kids guilt-free to teachers using it on tablets in their classroom.

OTT meaning the next big thing.

As we’ve seen, the OTT landscape is changing as consumers demand new streaming content. We’re predicting a few winning options for content creators in the near future.

The future of OTT viewing

  1. Niche content. Sometimes you gotta go small to win big, and we’re seeing a lot of opportunity in niche content. Whether it’s fitness videos, faith-based content, a pottery conference, or other highly-targeted fare, people are looking to follow niche topics and create deeper connections with the content creators. Focus on your most-engaged viewers and develop content specific to their needs. These viewers tend to stay subscribed. And that creates a guaranteed revenue base, and the chance for creators to use that income to advertise to new audiences.
  1. Live streaming. The at-home audience created by COVID-19 is creating a high need for live streaming content. Music venues, movie theaters, and conferences are finding success matching OTT with tools like live pay-per-view and live simulcasting. From KT Tunstall concerts to Endurance Sports TV, live streaming is offering that in-person experience no matter where the audience may be.
  1. Apps over channels. Our data has shown that apps (mobile apps, tables, game consoles, connected TVs) grow a content creator’s audience by 50% more than web-only streaming. This shouldn’t be a surprise in the world of OTT where people expect a Netflix-style experience, no matter who is providing the content they’re viewing. Be aware that the apps chosen for viewing vary with the topics of the content. Our data shows that news content is viewed overwhelmingly on web apps, instructional content is viewed most often on mobile, and sports content viewership is high on both web and connected TVs.  

That should answer the “What does OTT mean?” question, as well as give a picture of how content creators can use OTT to their benefit now and in the near future. As always, we have more resources to help — our handy Five reasons to launch a video subscription guide is an awesome starting point.

Thinking about creating your own SVOD?

Excellent. Our ebook, Five reasons to launch a video subscription service, offers plenty of details on how to get started.