What Is Over the Top (OTT)?

Over the top (OTT) refers to film and television content provided via a high-speed Internet connection rather than a cable or satellite provider. Viewers who dislike paying for bundled content are often referred to as cord-cutters. OTT does not mean free, as the term encompasses services such as Netflix, Amazon Prime Video, Hulu, and HBO Now.

Key Takeaways

  • Over the top (OTT) is film and television content that is provided via the Internet as opposed to the traditional means of a cable or satellite provider.
  • Common examples of OTT include services such as Netflix, Amazon Prime Video, Hulu, and HBO Now.
  • OTT allows individuals to avoid having to pay for bundles that are typical of cable and satellite, while selectively choosing their providers, at a much lower cost.
  • Transactional Video on Demand (TVOD) refers to renting or buying movies through certain providers, such as Apple TV, YouTube, and Vimeo.

Understanding Over the Top (OTT)

Over the top (OTT) viewing became popular with Netflix's sharp growth as it segued from simply showing old movies and television shows to developing original content and distributing licensed content more quickly. Its fast-growing profitability and popularity, especially with younger audiences, has spurred wide-ranging competition. OTT content can be accessed directly on a computer, but it is often watched on a Web-enabled television or through an Internet-enabled device, such as a Roku or Apple TV, connected to a conventional television.

Transactional Video on Demand

Transactional video on demand (TVOD) services rent or sell movies or television shows one at a time. The best-known service is Apple's iTunes, which added television shows to its music offerings in 2005. Full-length movies followed in 2006.

In 2019, Apple decided to retire iTunes, and rentals or purchases will now be done through Apple TV for television shows and movies. Vimeo on Demand is a TVOD service launched in 2013 with the aim of providing independent filmmakers with a new outlet to sell content; it is a fee-based add-on to Vimeo's free content. Vimeo has also begun creating its own original programming.

Amazon Prime Video is a TVOD that debuted in 2006 as Amazon Unbox; the name was changed in 2011 to Instant Video and now is known by Prime Video. Like iTunes, the service rents and sells movies and television shows for separate fees. In February 2011, Amazon announced its Prime service, which offers faster delivery of packages for a single annual fee, would add a subscription video component.

Subscription Video on Demand

Netflix began as a DVD by mail service in 1998 and added streaming in 2007. The company's first original content was the series House of Cards, which became an immediate hit when all of the first season's episodes were released simultaneously on Feb. 1, 2013. The show offered a new way for viewers to watch a series and propelled the company to sharply higher levels of attention and subscribers.

The success of Netflix's continued expansion in original programming led other streaming video on demand (SVOD) companies to follow suit. Hulu launched in 2007 as an advertising-supported service that streamed clips and reruns from broadcast television shows; especially NBC, which was an early partner. It continued to add network partners including Walt Disney, Fox, the CW, and Showtime. The company added a subscription service in 2010 and original content in 2011.

Amazon Prime offers unlimited streaming of a subset of Amazon Prime Video content. The company launched its first original series in 2013, which is only available to Prime members. Networks such as HBO, Showtime, and CBS offer subscription-based services streaming their content over the top.

The Golden Age of Television

Since the success of Netflix, more and more streaming companies have entered the market, all creating their own content to attract viewers, and therefore, profits. This has led to a boom in the amount of television content available as well as to an increase in its quality; both in terms of visuals and story. The success of OTT has been coined "the golden age of television," a reference to the first golden age of television that occurred in the 1950s.