The World Of OTT: Part 1 - The Principles & Terminology Of The OTT Ecosystem

OTT is becoming more and more prevalent in the world of video consumption. Some people would say that it will become the dominant form of video delivery in years to come as the underlying technologies expand, develop or mature, and consumer behaviour continues to revolve around convenience, flexibility and personalization. Recent OTT launches and refreshes from major media businesses like NBC, Disney, Warner Media, CBS, RAI, BBC, ITV, SRG and RTL show how important OTT is to their future.

But to many people working in video production and distribution, especially those who have worked a long time in the Broadcast industry, the technical components used in OTT-based delivery are relatively unknown. Also, because OTT is still relatively new compared to other video distribution methods like terrestrial, satellite, cable and even telco’s “IPTV”, and it has disrupted the established broadcasting business models, long-held industry terminology is being used in new and different ways.

If the 2010s witnessed the fast-growing early childhood of OTT in the Media & Entertainment industry, the 2020s will see it develop and mature through its adolescent years. There are clear building blocks in place and some forward-looking visions of the future. Now is the right time for a comprehensive description of the technologies used in OTT that highlights the key functions and their technological evolution. This article provides an overview of the OTT ecosystem for anyone who needs to become more familiar and confident with how OTT works.

We need to start with a few definitions that will follow us as we talk about the OTT ecosystem.

Live, Linear And Video-on-Demand

Since the introduction of OTT video services, the previously established world of video delivery by linear TV channels and pay-per-view has been disrupted and certain terms have become unclear. We will be using the following definitions when discussing OTT:

  • Linear – scheduled content that can be live content or pre-recorded content.
  • Live – scheduled or unscheduled content that is happening now. Live content can have certain sensitivities, like latency, that require special attention in OTT delivery.
  • Video-on-Demand or VOD – unscheduled, file-based content, generally presented in some form of content library, that is available when requested.
  • Streaming – the delivery of video in a continuous set of IP packets for consumption once sufficient packets are available on the consumer device.
  • Progressive Download – the delivery of video over IP for consumption once enough content is stored in the local device.
  • SVOD, TVOD and AVOD – different business models for VOD services. SVOD (Subscription-based), TVOD (Transaction-based, e.g. pay per view) and AVOD (Advertising-supported).

Distribution Methods

Video is delivered to end consumers over a variety of networks:

  • Terrestrial – the oldest method of broadcasting, with RF signals transmitted to RF receivers (antennas) that connect directly to televisions.
  • Satellite – RF signals are transmitted to satellites in orbit around the earth and relayed to RF receivers (dishes) that connect into set-top-boxes and televisions. Signals can be encrypted if necessary.
  • Cable – RF signals and/or IP signals are transmitted through fiber and coaxial cables to a set-top-box for a fully managed, closed network TV service.
  • Telco “IPTV” – IP signals are transmitted through fiber and coaxial cables to a set-top-box for a fully managed, closed network TV service.
  • OTT – IP signals are requested (pulled) and transmitted (pushed) through fiber and coaxial cables to unmanaged IP-connected devices like mobile phones, tablets, computers, smart TVs and IP set-top-boxes. The network path is generally partly managed or fully unmanaged.
  • Free to air and Pay-TV – two different business models that are independent of the network type used to deliver the video.

OTT is therefore a video distribution method that uses the internet to deliver content to IP-connected devices. OTT is not a business model or a type of video service. 

CDNs are more than just a high speed link between network peer points.

CDNs are more than just a high speed link between network peer points.

The OTT Ecosystem – From Transmission To Consumption

OTT operates as a pull system, basically because the internet operates as a pull system. Pull systems were industrialized by manufacturing businesses as they looked for more efficiency while offering more customer choice. Push systems, or batch manufacturing systems, were becoming less popular as the demand for choice increased. And people had realized that unnecessary inventory was expensive to keep. So the main principle of a pull system is to deliver material into the process only when required. If it is not required, it is inefficient and unnecessary to deliver it. Naturally, as efficiency and choice are balanced with commercial imperatives like faster lead-times or buying in high volumes for lower unit costs, some systems combined pull and push to optimize their delivery in terms of speed, price and choice.

The internet was constructed as a pull system, to move information over a network of inter-connected devices. Original information is generally stored in one place with a specific IP address and delivered when requested. It can be stored locally or in other locations, but it is inefficient to store content in every place it might conceivably be required. OTT video must fit into this internet ecosystem. Content caching has therefore become critical to deliver large video files to consumers at the lowest possible speed and to utilize network capacity in the most efficient way. The development of point to point video delivery over fiber, coaxial and mobile networks has followed a steady path towards central storage, fast networks and content caching.

So an OTT device is not a passive receiver that continuously receives every available video stream available to it. It must request a stream in order to receive it. This means that unicast is the dominant delivery method, which brings certain benefits such as personalized video services, but which also means the centralized video platforms must work well with network and caching infrastructure to deliver video at low latency.

Push-Pull systems are core to the operation of the internet and hence OTT delivery.

Push-Pull systems are core to the operation of the internet and hence OTT delivery.

Because broadcasting is a push system and OTT is a pull system, the concepts and paradigms of content distribution are almost opposite. Broadcasting relies on scheduled viewing of live and pre-recorded linear content, OTT has developed first and foremost around on-demand viewing. In a production setting, live TV is complicated to deliver. In a distribution setting, VOD is complicated to deliver. In an OTT distribution setting, VOD places pressures on parts of the ecosystem that Broadcasters haven’t been accustomed to dealing with, like central storage and content origination, driven by the need to deliver thousands of different files on-demand to millions of individual consumers. At the same time Live and Linear content in OTT faces latency and quality pressures that have been fixed for decades in over-the-air and managed network video services but which now resurface in the relatively open and unmanaged networks used for OTT.

Pull systems have entire textbooks written about them. For this OTT Ecosystem article this high-level overview of the principles lays a foundation to talk about the core functions used in OTT services, such as encoding, origination, caching, peering points, access networks, video players and more.  These functions can be aggregated into services like Online Video Platforms (OVPs) or Content Delivery Networks (CDNs), but the core functions remain the same. Video has to be processed, stored and managed. Consumers have to request, be given permission, and receive content. Services have to be monitored and controlled.

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