According to various sources, 4.5 billion people used the internet regularly in 2020. This was more than half the world’s population of around 7.7 billion! With governments taking steps to expand the area under internet connectivity, more people are now spending substantial time in the digital world. One of the biggest ways in which the internet has impacted human lives is by revolutionizing the way people entertain themselves. The first device that exposed people to the world was Marconi’s radio. Then came the TV with cable connection, which was soon replaced by TVs with satellite/dish connections, commonly known as a set-top box (STB).
In the last 4–5 years, the personal entertainment sector has witnessed further evolution with the advent of the online streaming, over-the-top (OTT), and internet protocol TV (IPTV) concepts. They are, in turn, replacing TVs with smartphones, tablets, desktop computers, and laptops as the preferred medium for watching TV.
So, what really are online streaming, OTT, and IPTV, and why have they become so popular in such a short time?
Online streaming is essentially people consuming any kind of media, including TV shows, movies, videos, and songs, on a website or mobile app. Therefore, watching videos on YouTube, Facebook, or any other website is considered ‘online streaming’. Hence, anybody who has an internet connection can stream content online on the device of their choice. Thus, with the rising number of people with an internet connection, online content consumption is gaining pace.
IPTV is essentially TV programs that people access via the internet. The local cable TV provider establishes a local area network (LAN) between itself and the subscriber. Instead of the traditional cable or dish wire, an optical fiber cable is connected to the STB. Although the local cable TV provider offers IPTV, the latter concept offers subscribers on-demand content instead of scheduled programming. Apart from cable TV providers, several media and entertainment companies have entered the IPTV business with their own services, which are streamable on any device.
Therefore, with the option of watching what people want when they want, many are shifting from traditional cable and dish, also known as direct-to-home (DTH) TV, to IPTV.
OTT is similar to IPTV in the way that both provide content to subscribers via the internet. The difference here is that people don’t need to be customers of a cable TV provider to access OTT content; it is available over the air, meaning anyone can access it by subscribing to the service. The data packets are transmitted via the conventional broadband and Wi-Fi connections, so anyone who has an internet connection can subscribe to these digital services.
Here is a list of the largest global OTT platforms, along with the number of subscribers, as per CNBC:
The biggest reason for the rapid popularity of such platforms is that they offer a personalized viewing experience. People can watch their favorite shows on demand and access live streams. This offers independence from the traditional scheduled programming of cable and satellite TV. Moreover, with these platforms, people don’t have to necessarily have a TV; the shows can be watched on any internet-connected device, including smartphones, laptops, desktop computers, and tablets. Even though IPTV offered by cable TV providers requires an STB and TV, there are mobile and desktop apps that help users cast the show from the TV to any other device.
Therefore, online streaming platforms allow people to consume entertainment content even on the go. OTT services can be accessed via the internet connection of the mobile phone, allowing people to watch TV from wherever they are. In this regard, the burgeoning number of mobile internet users is helping digital TV companies expand their business. As per the GSM Association, already in 2019, 3.8 billion people were using the internet on their mobile phones.
This has come as a boon for youngsters who are continuously on the prowl for better jobs, therefore often stay far from home. Staying at a rented flat, shunting from city to city, many find it unfeasible to buy a TV and carry it around wherever they go. Therefore, the easy availability of high-quality smartphones at reasonable prices allows millennials to entertain themselves non-stop. As per reports, already by 2019, mobile phones had become the primary devices for consuming online content.
Moreover, many of the OTT platforms, including Netflix and Amazon Prime Video, have started producing their own movies and TV series, which usually feature more adult content than those broadcast on primetime. As the young population of today enjoys content with a lot more thrill, action, and romance, movies and TV series produced by OTT platforms have become rapidly popular. For instance, over 64 million people watched Stranger Things, while Sacred Games became one of the most-watched OTT TV series in India.
The COVID-19 pandemic has also had a profound effect on the popularity boom of online streaming platforms. As people were told to stay indoors, many suffered from mental and emotional isolation. Locked inside for long periods, social life almost ended for many, which shifted the global attention to TV, gaming, and other forms of entertainment. As per an article by Indian Express, "The usage of smartphones during the COVID-19 pandemic period rose to 3 hours 54 minutes, compared with 3 hours 22 minutes in the pre-COVID-19 period."
Moreover, during the lockdown, MX Player, Hotstar, Netflix, and Amazon become the most-popular OTT platforms in India. As per the India Brand Equity Foundation (IBEF), paid OTT subscriptions witnessed a 31% increase during April–July 2020, reaching 29 million. In April alone, when the first COVID-19 wave was wreaking havoc, OTT subscriptions grew by 5 million. A lot of people had lost their jobs either permanently or temporarily, which left them with too much time and too little to do. This was a key reason behind the boom in the usage of traditional and online TV during the lockdowns around the world.
Seeing the mushrooming viewership of OTT and IPTV platforms, companies across industries are using them to advertise their products and services. These platforms offer marketers independence from TV channel owners for running advertisements. OTT advertising is similar to any other form of digital advertising; here, the ads are delivered to people through the internet on the device being used to stream online content. In traditional TV advertising, companies need to bid for specific time slots to run their ads, which can be expensive and not that fruitful.
With OTT advertising, companies have the freedom to decide which ad to show to which subscriber at which time. Ads include those that interrupt a video, banner ads, and sponsored content. For instance, somebody uses their smartphone or smart TV to search for cosmetics; the advertiser will track the user activity and then show relevant ads on the OTT or IPTV platform. This is similar to seeing ads on Facebook, YouTube, or any other website. This allows companies to avoid spending on TV ads that target the entire TV subscriber base at once and allow them to create more-effective ads for a specific target audience.
Therefore, with internet connectivity expanding to a larger share of the global population, online streaming platforms of all kinds are proliferating. This is not only allowing people to consume digital content on demand, but also helping companies advertise better.