AuthoredbyChrisRoberts&VinceMuscarella
(Rentrak)
DefiningOver-The-Top(OTT)DigitalDistribution
Thisdocumentpresentsanoverviewofover-the-top(OTT)distributionandhowitfitsintotheInternet
protocolTV(IPTV)andvideo-on-demand(VOD)markets.ItexplainstheprinciplesofOTT,considersthe
differencesbetweenOTTandIPTV,looksatthevariousbusinessmodelsintheOTTspace,andprovides
detailedanswerstothekeyquestionsbeingaskedaboutOTT.
“Digitaldistribution”hasbecomeageneraltermreferringtothedeliveryofentertainmentcontentto
theconsumerthroughtheinternetasopposedtoover-the-airbroadcast,cable,telco,satellite,ordiscbaseddelivery.Therealityisthatthereareavarietyoftypesandmodelsof“digitaldistribution,”and
thatcontentdeliveredbytraditionalcable,telco,andsatelliteoperatorscanalsobedefinedas“digital.”
Thegoalofthisdocumentistopresentacurrenthierarchyofthesubsetofdigitaldistributionthatis
commonlyreferredtoasover-the-topdistributionanddefinethemostcommontypesoflicensesand
businessmodelsusedbythebiggesthousehold-names.
OTT
LIVETV
EST
VOD
AVOD
SVOD
iVOD
OTT(Over-The-Top)referstothedeliveryofaudiovisualcontentstreamedovertheInternetwithoutthe
involvementofanInternetserviceprovider(ISP)inthecontrolordistributionofthecontent.TheISPis
neitherresponsiblefor,norisabletocontrol,theviewingabilities,copyrights,and/orother
redistributionofthecontent,whicharrivesfromathirdpartyandisdeliveredtoanend-user’sdevice.
TheISPisonlyintheroleoftransportingIPpackets.It'softenreferredtoas"over-the-top"because
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OTTOverview–TheEntertainmentMerchantsAssociation(2015)
theseservicesrideontopoftheserviceyoualreadyget.OTTservicesdon'trequireanybusinessor
technologyaffiliationswiththeentitythatcontrolsormaintainstheinfrastructurethroughwhichthe
contentisdeliveredtoend-users.
OTTincludesthedistributionoflinearprogrammingandnon-linearvideo-on-demand(VOD)and
electronicsell-through(EST)content.Smartphones,tablets,computers,gamingconsoles,DVD/Blu-ray
Discplayers,televisions,andset-topboxes/devices(e.g.,AppleTV,FireTV,GoogleChromecast,and
Roku.)withinternetconnectivityareabletoaccesscontentviatheinternetfromcompaniesand
serviceslikeAmazonVideo,CBSAllAccess,HBONow,Hulu,Netflix,andSlingTV.)
Q:WhataretheOTTbusinessmodels?
A:TherearethreeprimarybusinessmodelsforOTT—Live,EST,andVOD:
1. LIVETV:Asubscription-modelservicewherecontentisstreamedlivetoaninternet-connected
deviceforviewingbytheend-user(seeOTTdeviceexamplesabove).SomepeoplebelieveIPTV
isOTT,butIPTVoperatesinaclosedsystemoradedicated,managednetworkcontrolledbythe
localmultichannelvideoprogrammingdistributor(MVPD):acable,satellite,telephone,orfiber
companylikeU-verse(AT&T).IPTVmeansInternetProtocolTVandreferstothetechnology
beingutilizedinthecontent’sdelivery,notthelicenseorbusinessmodelbeingemployed.OTT
TVdiffersfromIPTVasittransmitsstreamsusingHTTP(HypertextTransferProtocol),the
protocolwhichhasbeenusedfordecadestotransportwebpagesovertheinternet.Thechart
belowexplainsthekeydifferencesbetweenOTTandIPTV:
ComparisonofIPTVvs.OTT:
IPTV
Over-The-Top(OTT)Technology
ContentProvider
LocalMVPD(e.g.,Uverse-AT&T)
Studio,TVNetwork(channel),or3rd
partyservice
Transmission
Network
Localtelecom-
dedicatedownedor
leasednetwork
Publicinternetpluslocaltelecom
Receiver
STBorDVRprovidedby Internet-connecteddevicepurchased
telecomorpurchasedby byconsumer(e.g.,phone,tablet,
consumer(e.g.,TiVo)
computer,console,set-top-box,etc.)
2. EST(ElectronicSell-Through,Download-to-Own,orDigital“HD”):Electronicsell-throughisthe
modelwherebyaconsumerpurchasesorperpetuallylicensesadigitalreproduction.This
licensedreproductioncouldbeintheformofafiledownloadedtotheconsumer’sinternetconnecteddeviceorlocalharddrive,orviaaccesstothecontentinavirtualstoragelockeror
cloud-basedserviceforstreamingondemandtotheend-user.
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OTTOverview–TheEntertainmentMerchantsAssociation(2015)
3. VOD(Video-On-Demand):Contentnotownedorperpetuallylicensedbytheconsumerthatis
eitherstreamedordownloadedtoaninternet-connecteddeviceforviewingbytheend-userat
theend-user’sdiscretiononanon-demandbasis.
Q:WhataretheVODbusinessmodels?Doestheconsumerpayasubscriptionfee,payby
transaction,orviewadvertisinginsteadofpayingdirectly?
A:Theshortanswerisalloftheabove:
1. AVOD(Ad-SupportedVideoOnDemand):Ad-supportedcontentmadeavailableonanondemandbasisforstreamingtoendusers.ExamplesofAVODincludeABCGo,Crackle,Hulu,
Popcornflix,andYouTube.Suchservicesareprimarilymadeavailabletotheenduseratno
charge,thoughinsomeinstancesa‘freemium’orhybridAVOD/SVODmodelisemployedwhere
onlyaportionoftheservice’scatalogismadeavailableforfree,withtherestbehinda
subscriptionpaywall.
2. SVOD(SubscriptionVideoOnDemand):Forafixed,recurringfee,subscribersmayhave
unlimitedstreamingtoalicensedcatalogofcontentforthedurationoftheiractivesubscription
term.Subscriptiontermsmaybeasshortasonemonth(HuluPlus,Netflix)oraslongasone
year(AmazonPrime).
3. iVOD(InternetVideoonDemand):Thetemporarylicense(i.e.,arental)ofaprogramfora
limitedandpre-determinedviewingperiod(suchas24or48hours)foron-demandviewingby
anend-user.Theprogrammaybedownloadedandstoredlocallyontheend-user’sdevice,or
accessedonlineviastreaming.
Q:Doestheconsumerhaveperpetualortemporarylicenseforthevideofile?
A:ForiVOD,theconsumerhasatemporarylicensetoaccess,view,and/orstorecontent.Inthecaseof
EST,theconsumerpaysforwhatislargelyconsideredtobeaperpetuallicensetostore,view,and/or
accessalicensedreproduction.Inbothcases,andlimitedtothedurationofthelicense,theconsumer
mayhavetheoptionto:(a)storeacopyofthefilelocallyforplaybackonacompatibledevice;(b)access
itonlineforstreamingthroughaninternet-connecteddevice;or(c)both.
Q:WhatdoestheOTTbusinesslooklike?
A:TheOTTlandscapeisquitecomplex.TheillustrationthatfollowsexplainstheflowoftheOTT
businessstartingwiththeOTTVideoRetailers/Distributors(e.g.,Hulu,Netflix,YouTube—notanallinclusivelistofOTTVideoRetailers/Distributors).
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OTTOverview–TheEntertainmentMerchantsAssociation(2015)
OTTIllustration:
NamesandlogosforAmazonInstantVideo,CBSAllAccess,HBONow,Hulu,Mgo,Netflix,PlayStationVue,SlingTV,YouTube,andXbox,are
trademarkedandarethepropertyoftherespectiveowners.
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OTTOverview–TheEntertainmentMerchantsAssociation(2015)
OTTProviders(includingU.S.subscriberestimates,monthlyfees,etc.)
OTTProviders(examples)*
#ofSubs(est.)
Netflix
Price(Month)
Notes
AmazonVideo
42,000,000
27,000,000
$11.99 60,000,000Worldwidesubsestimated.
Includedw/AmazonPrimeannualfee.
$8.25 $8.99mo.fornewmemberseffective
5/9/14.$11.99/mo.for4HDscreens.
BaseHuluAVODserviceis$0.00.
$7.99 10,000,000HuluPlussubsestimatedby
someanalysts.
HuluPlus
9,000,000
Showtime
1,000,000
HBONow
850,000
$14.99 MoffettNathansonestimates1.9Msubs.
SlingTV(DISH)
250,000
$20.00 Noggin(Nickelodeon)
162,000
$5.99 CBSAllAccess
100,000
$5.99 $10.99 $49.99 Àlacarteoptionsarealsoavailable.
PlayStationVue(Sony)
N/A
NBCUniversal
N/A
Apple
N/A
$25.00
WarnerArchiveInstant
N/A
$10.00 SesameStreetGo
N/A
$4.00 Popcornflix
N/A
$0.00 Ad-SupportedMoviesandTVcontent.
*Notanall-inclusivelist.N/A–Notavailable
OTTSports(examples)*
NFLNow
$3.00 Estimatedprice.Servicetolaunchin
2016.
#ofSubs(est.) Price(Month) Notes
N/A
$1.99 $4.99(outsideofUS,Mexico,UK)
NBALeaguePass
N/A
MLB.TV
N/A
$20.00 Basefee.Premiumoptionsalsoexist.
MLSLive
N/A
$15.99 $37.99Season
NHLGameCenterLive
N/A
$4.95 WatchESPN
N/A
$20.00 PGATourLive
N/A
$4.99 WWENetwork
N/A
$10.00 *Notanall-inclusivelist.N/A–Notavailable
$200.00 LeaguePass(fee)
Note:SubscriberestimatesandpricingasofJune2015
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OTTOverview–TheEntertainmentMerchantsAssociation(2015)
Authors:
ChrisRoberts,SVPSales,OnDemandEverywhere,Rentrak
ChrisRobertsChrishasbeenatRentrakformorethan25yearsandstrivestobeonthecutting-edgeofthe
constantlyevolvingentertainmentindustryinordertodeliverRentrak’sclientsthemostinnovativeanduseful
productsandservices.Robertshelpedcreatetheindustry’sdigitalmeasurementserviceformoviesandTVcontent
in2013,Rentrak’sDigitalDownloadEssentialsIndustry™.Usedbyallthemajorstudiosandnetworks,theservice
providescompetitiveESTandiVODintelligenceinanevolvingdigitallandscape.ChriswaslistedasoneofHome
MediaMagazine’s“DigitalDrivers”in2014and2015.ChrisalsoservesasamemberoftheEMADigitalSteering
CouncilandisalsoontheboardofdirectorsofOurFamilyInAfrica,aninternationalnon-profitorganization
providingsupporttoorphansintheDemocraticRepublicofCongo.
VinceMuscarella,VPDigitalStudioServices,Rentrak
HonoredasoneofHomeMediaMagazine’s“DigitalDrivers”in2014and2015,Muscarellahasmorethan13years
ofdigital,VOD,andhomeentertainmentindustryexperience.AftercreatingandleadingMillennium
Entertainment’s(nowALCHEMY’s)digitaldistributionefforts,MuscarellajoinedRentrakin2012,workingwith
majorstudiosandindiestohelpgrowRentrak’sDigitalandVODmeasurementservices.
GlossaryofKeywordsandAcronyms:
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OTT–Over-The-Top
iVOD–InternetVideo-On-Demand
EST–ElectronicSell-Through
DTO–DownloadToOwn
VOD–Video-On-Demand
AVOD–Ad-SupportedVideo-On-Demand
SVOD–SubscriptionVideo-On-Demand
HD–HighDefinition
IPTV–InternetProtocolTelevision
HTTP-HypertextTransferProtocol
MVPD–MultichannelVideoProgrammingDistributor
STB–Set-Top-Box
DVR–DigitalVideoRecorder
ISP–InternetServiceProvider
©EntertainmentMerchantsAssociation(EMA).AllRightsreserved.Theinformationcontainedhereinissubjecttochangewithoutnoticeand
doesnotcarryanycontractualobligationfortheEMAorRentrak.Namesandlogosforcompaniesmentionedinthisdocumentaretheproperty
oftherespectiveowners.
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OTTOverview–TheEntertainmentMerchantsAssociation(2015)