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OTT and CTV Explained in 5 Minutes

Amid the ongoing global pandemic and rapid digital ecosystem development, streamed TV content has boomed, just as streaming TV advertising. However, to properly take advantage of this new trend, one must clearly understand the digital media landscape and streaming TV itself. So it is essential to figure out the difference between over-the-top (OTT) and connected TV (CTV).

1,053
7 MIN READ
OTT and CTV Explained in 5 Minutes
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Amid the ongoing global pandemic and rapid digital ecosystem development, streamed TV content has boomed, just as streaming TV advertising. However, to properly take advantage of this new trend, one must clearly understand the digital media landscape and streaming TV itself. So it is essential to figure out the difference between over-the-top (OTT) and connected TV (CTV).
Feb 07, 2022
1,053
7 MIN READ
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Adtelligent
A full stack advertising technology company for publishers and advertisers.

What is OTT?

OTT, which is short for ‘Over-the-Top,’ refers to the process of streaming video content via the internet, so it goes ‘over-the-top’ of a standard satellite or cable TV system without the need to subscribe to these more traditional TV services. So the OTT includes the possibility to view all kinds of TV programming and other video content over the internet. The most popular OTT services are Netflix, Youtube, ESPN, Hulu, HBO Max, Disney Plus, Showtime, etc.  

What is CTV?

Connected TV (CTV) stands for all devices that can connect to the internet and enable content streaming. The term CTV covers all types of Smart TV and streaming devices like set-top boxes, gaming consoles, etc. – any device that provides content streaming options. Devices like Roku, Apple TV, Fire TV or Chromecast, and gaming consoles like Xbox, Playstation, or Nintendo Switch can deliver those functionalities.

OTT_CTV devices and services

OTT Service vs. OTT Platform

OTT services usually refer to the streaming services such as Netflix and HBO Max that deliver video through the internet with or without a subscription. OTT Platform is a software behind the streaming technology that allows the delivery and post video content online. OTT advertising platforms also ensure the ability to monetize video content, solely focusing on this functionality. OTT platforms can be more holistic and also include monetization features. 

What are AVOD and SVOD?

OTT video media content is delivered in a video on demand format (VOD). It does not need a TV subscription as long as the user has a relevant device such as a smartphone or a Smart TV – the content can be streamed over the internet. For the viewer, online streaming is seamless, but several business models underlying the technology behind online video content delivery.

What is SVOD?

SVOD resembles traditional TV subscription deals that allow content consumption for a flat rate paid per month. Such streaming services as Netflix, Amazon Prime Video, Hulu, and more recent additions like Apple TV+, HBO Max, and Disney Plus operate under SVOD logic. There are no commercials or advertising involved.

What is AVOD?

AVOD offers free content. But just like with regular broadcast television, viewers have to watch ads. The most powerful AVOD services are YouTube, Facebook Watch, Twitch, SlingTV, Roku, etc.  

It’s interesting to note that YouTube has been slowly converting its subscription-based Youtube Premium to an ad-based model to catch on with the competition. AVOD is of particular interest to publishers and content makers as it allows for advertising and presents an effective monetization opportunity. 

Difference between OTT and CTV?

Because the two terms are very interconnected, they are often confused. Indeed, they are very similar and interlaced, but while OTT refers to the process that provides TV and video content online, CTV is the device that enables the streaming of such content. 

OTT presents a broader term, and CTV is a subtype of it. So, for example, if you are watching your favorite TV show on Netflix – you are streaming OTT content. And if you are watching the show on Netflix through your Xbox connected to the television – you are streaming OTT content over CTV. 

OTT devices allow you to watch video content on them; any smart device with a screen falls under this category. CTV devices can connect you to a TV set/screen or have embedded technology to support video streaming if it is impossible otherwise. 

In the scheme below, you can see the whole OTT/CTV ecosystem and interconnectedness. 

OTT Streaming services with devices and connected sets.

What is Convergent TV?

There is another term used widely in connection with OTT and CTV, and it is Convergent TV. To avoid confusion, let’s clarify what it stands for. Convergent TV is interchangeable with Connected TV. It often refers to a union of both traditional pay-TV and connected TV in the context of advertising. So it is just underlined these tendencies and means the same thing. 

The best OTT platforms 

In the light of this information, it is important to know through which platform advertisers can take advantage of OTT video streaming. It is mainly done through dedicated OTT platforms that help post and monetize video content. It can often come in the form of a supply-side platform paired with a video player that allows post video content and manage video ad monetization. Adtelligent SSP with its video player solution is an example of such a merge. Such platforms as Setplex, Vimmi, Dacast, Vimeo OTT, IBM Watson Media, ViewLift, VPlayed, Uscreen.tv, Brightcove, JWPlayer, Wowza, Kaltura, Muvi can also help take advantage of the OTT formats. 

Highlights 

So we have established that OTT is video and TV content delivered through the internet, and CTV is the device that enables it. In recent years many production companies and broadcasting giants launched their own streaming services and smart TV devices, raising the competition and sparking even more popularity. OTT streaming is on the rise, but the pandemic sparked the unprecedented boom in streaming content popularity. 

OTT video ad revenue from 2010 to 2026

The statistics reveal that the global OTT revenues have experienced massive growth since 2010, with 6.1 billion U.S. dollars in 2010 to over ten times in 2020. According to the research, OTT services are expected to bring over 210 billion U.S. dollars in revenue by 2026

To grasp the sheer amount of popularity growth of OTT/CTV advertising, let’s the reports issued by Innovid. They analyzed over 200 billion global impressions from more than 550 advertisers in 2020. The results showed that global CTV impressions increased by 60% year over year and programmatic CTV impressions by over 200%.

According to the research done by Winterberry Group, 2022 will be the year of “streaming wars” as more and more media companies embark on the OTT train. More viewing choices mean more competition that will drive the industry. Likely, metrics will also change, with the focus shifting from mere viewership measures to more complex analytical systems, transforming how we use data to fuel marketing campaigns.   

Moreover, considering the impressive growth over the last years, it is still an untapped territory. Innovid questioned over 100 agencies and brands on the usage of CTV advertising, and 24% of marketers have never tried it, 24% began using CTV advertising in their strategies in 2021, and 41% launched their first CTV campaigns no more than three years ago.

OTT_CTV Consumption report

This is just another example of how popular video streaming is, making this channel even more lucrative for advertising purposes. Considering that it is not oversaturated yet, it can be the perfect opportunity for publishers and advertisers to try in the upcoming years.