The lines between video on demand and over-the-top have become very thin due to progress in the video industry. VOD is more adaptable to people’s preferences, and OTT has made broadcasting more affordable and efficient.
Both terms are dominant in the video monetization industry; it provides demand-driven content and uses the internet to deliver the service. Both the technologies were made according to consumers’ expectations and business marketing strategies. Both are the most popular and fastest-growing streaming technologies.
What is OTT?
The OTT stands for over-the-top. The literal meaning of “OTT” is that the service provider goes on top of the existing services. OTT service offers it directly to customers. We can say that OTT is a newly discovered method of watching videos, films, web series, and TV content over the internet on many devices whenever we want without cable TV, or satellite set-top boxes with the help of internet connection.
In simple terms, “OTT” means paying money to service providers to get access so we can watch our favourite shows on Netflix, Amazon Prime, etc. To enjoy OTT live streaming, customers need internet access, a connected device, and different OTT platform subscriptions.
Today, many over-the-top providers have applications, websites, and social media pages to inform customers about their services. Customers can also log in to their internet browsers and access the available subscription based services. Traditional television streams on channels with the help of cables or satellites, but over-the-top platforms stream directly over the internet rather than a private network. OTT platform viewers are increasing day by day.
According to Indian M&E industry reports, OTT subscriptions have increased 16 times in the last five years and are expected to reach 85–90 million by 2022. It is expected to grow at a rate of 20–23% to 11–13 billion by 2030.
As a result of increasing demand, OTT subscriptions are projected to reach 160–165 million in 2027. Due to the OTT platform, internet surfing and streaming time increased by three times.
Attractive video content is pushing people closer to paying for premium or exclusive content, so premium subscriptions are increasing.
How does OTT work?
Over-the-top services are content providers that depend on a free transmission system, i.e., the public internet, to display their video content. OTT platforms deliver their content via the one-to-one transmission method. One-to-one transmission means every end-user has a unique connection with the source content; it serves one single device or receiver every time.
Internet Service Providers (ISPs) are accountable for providing infrastructure in the form of streaming OTT content to end users. ISPs do not have any control over OTT video content delivery or copyrights. OTT adjusts many networks and devices to deliver content on the public internet.
OTT’s working performance depends mainly on the internet connection, internet speed, and available bandwidth. Therefore, image and audio quality might affect an OTT application. To avoid this OTT service, Netflix offers streaming quality adjustments for a better viewing experience.
What is VOD?
Video on Demand VOD is a distribution system related to media that allows users to watch videos without any video playback device and the typical broadcasting schedule. Like OTT, VOD requires an internet connection.
Video on Demand, or VOD, is a streaming service through which you can play and watch videos whenever and wherever you want. It allows viewers to watch serials, movies, and news at any time. It is the polar opposite of broadcast media, where you must watch pre-programmed content.
VOD is pre-recorded video content you can watch on the internet any time you want. Such VOD services are provided by Amazon Prime and Apple TV.
The first VOD business model was released in the early 1990s. After many improvements in data compression and transmission and various technologies, it is now possible to stream videos via phones. VOD can be watched by any means, like cable, TV, or broadband. Many content creators can make better content and add it to VOD platforms.
VOD is the present and future of the broadcasting industry. Television systems stream TV shows through set-top boxes, cables, or smart devices like computers and mobile devices.
But with Video on Demand (VOD) services, users can download content permanently. With the VOD, it’s advantageous because you can also watch it work. Many VOD industries formulate a content strategy for good video content to be delivered to the audience.
How does VOD work?
VOD works when a server sends the data or content to your video player. VOD is free in one model but earns money in another through advertisements, so instead of paying to see, viewers need to bear with watching advertisements in AVOD. Ad revenue is determined by how much time you spend looking at them, whether they have appealing content, and the cost per view.
As AVOD platforms do not charge any extra fees, they are ideal for people who are not much into entertainment. Earnings from advertisements in AVOD are subject to a variety of factors and are somewhat unpredictable. To make things simpler, YouTube and other similar platforms have introduced subscription-based videos on demand.
A paid subscription to SVOD allows users to view all content ad-free. The cost of joining such a streaming platform ranges from monthly to yearly. It is a content library, and users can watch video content on their own time and anywhere they want.
Few channels first post their content on TV and then upload it on VOD platforms. The VOD platform business is much more predictable. The Transactional VOD model charges the customer according to their content requirements, not like open account charges.
In Video on Demand (VOD), to deliver or showcase video content, a video file is compressed and then transmitted over the internet, where it is to be delivered. The video file is converted to a readable format and then placed on servers.
After reaching this stage, videos are loaded, where subtitles, thumbnails, or any other information is added. When VOD gets a request from a user, the video is compressed and then transmitted to the internet via the Content Delivery Network (CDN). When a video is received by our video player, it is decompressed and then decoded into a viewable format that the user can easily watch.
What is the difference between OTT and VOD?
1) The main difference between video on demand and over-the-top is the transfer of data. In VOD, it employs cable and satellite set-top boxes, but in OTT, it is transmitted over the internet.
2) VOD allows the user to download, record, or save the content to watch later. But in OTT, you cannot download the video content; instead, you have to stream it from start to finish. The OTT system is designed for video streaming, not downloading.
3)Pre-recorded or downloaded video content is included in Video on Demand, allowing you to build your library. In addition to video content, OTT platforms offer podcasts (audio podcasts).
4) VOD uses the consumption model of video content, and OTT uses the distribution model by which video is distributed.
5) VOD services permit users to watch collections of videos at any time they want, but on the other side, OTT services allow users to watch video content and also audio podcasts like Spotify and Apple Music.
6) OTT can stream content online during broadcasts, but this cannot be accessed after live streaming ends. But in VOD, it allows users to access downloaded and pre-recorded content.
The top 5 advantages of OTT
1) Video content is delivered without any infrastructure or private network. It is distributed via an open network. It only requires a device on which we can watch videos with an internet connection. As a result, OTT services are much easier to manage and update than TV or cable services.
2) Customers have complete freedom to choose and control their media. They can decide when and how they want to watch their favourite shows on the OTT service.
3) As OTT does not require any infrastructure, it reduces cost and makes affordable and attractive deals according to customers’ requirements, like one-month or annual plans.
4) In traditional TV, we have limited options, but OTT services provide many options from different countries with original and licensed content.
5) Customers can now easily consume the content as per their liking. They can modify the packs as per their wishes.
6) OTT services are ad-free. It offers only targeted advertisements, and they are also limited. Users have control over marketing and advertisements.
7) OTT provides better video quality based on subscription packages. And with direct interaction and involvement, users can update their applications.
The Top 5 Advantages of VOD
1) Watch at any time:
VOD allows users to watch any content at their leisure. Like a traditional TV system, it does not force you to watch according to a schedule; it is independent of a timetable.
2) Media controls in hand:
Users have complete control over their VOD experience, with the options to play, pause, resume, fast-forward, and rewind at any time.
3) Marketing launch:
VOD is better for product launches and publicising many events to a large audience.
4) Cheaper rates:
Video on Demand is less expensive than cable or Tata Sky; however, their monthly fees differ. The charges for various VOD services vary.
5) Video Editing:
When it comes to streaming, once the content is edited, there is no way to change it, whereas with video on demand, the provider makes the content editable at any time and many times.
We believe that these details gave a sneak peek on OTT and VOD. Video streaming industry is growing day by day. Number of platforms are increasing but still only few are able to reach a wider audience and are able to see the fruits of their hard work.
Want to know how you can make your platform more user friendly and reach a wider audience? Naarg has strategy experts who can support you in reaching a wider audience. Get in touch with us to know more details.