What is OTT and Why Does it Matter?

 In Podcasts

OTT is one of those terms that shows up in every industry article, email, and whitepaper.  OTT is everywhere, and it’s always talked about as critically important for online video.  We even talked about OTT in our last podcast covering the rise of IGTV.

For our latest video podcast, we decided to take a step back and look at OTT from a high-level.  What is it, why should you care, which companies are doing a good job using it, and how can the average brand take advantage of it?

Video Podcast: You and OTT – Why You Should Care

Podcast Transcript:

Tyler Pyburn: Hey there everyone, what’s happening? I’m Tyler Pyburn here with Phil DiMartino from Five Tool Productions, another edition of the Five Tool prod pod today we’re talking about OTT.

Phil DiMartino: Yeah, I’m not doing it.

Tyler Pyburn: Oh, I was hoping he’s going to say yeah, you know me because he’d been saying at the last five minutes leading up to this. So we’re talking about over the top video content and the reason why we want to talk about this is because people have been talking about it. I feel like really since you and I went to NAB, I remember that was when I started 10 years ago. Started hearing about it all the time but didn’t really understand what it meant. So we figured kind of breaking it down a little bit now. What it means, what it means for brands and advertisers and how is kind of shifting the way we do things right now. So over the top content you want to give a quick definition of it?

Phil DiMartino: I’ll let you do it because I think what’s interesting to me is I think OTT is one of those things that’s used in almost every single industry article every paper and it’s like ubiquitous at this point. But I feel like it’s just taken for granted that people just automatically know what it is and it’s pretty simple actually.

Tyler Pyburn: It’s actually, it’s content being delivered to you without going through, say a cable company. So think of watching a video and it’s going through youtube as opposed to going through verizon and time warner cable and things like that. Norwood cable access type thing going. It’s going over the top of it, if that makes the easiest sense. So that’s really what it is. Um, let’s talk about some examples of what over the top actually is. I’ll let you start with examples because you just yourself kind of cut the cord, right?

Phil DiMartino: I did, I did. So it’s interesting because in this day and age you can’t, people always talk about like, oh, I’m a cord cutter, I’m a cord cutter and you’re like, want to get off the cable companies’, you know, get off the cable company’s dime all this stuff.

Tyler Pyburn: I was wondering where you’re going with that.

Phil DiMartino: But you can’t completely because you still need internet, so you have to have an internet provider no matter what. So there’s only so far you can really go, so I’m a cord cutter now in the sense that I have eliminated my cable subscription, still have to be subscribed to internet, but I have now I’m a youtube TV subscriber, which is basically delivering me the same tv channels, live tv channels just delivered completely over the Internet. Um, which is interesting because my last iteration of cable had, you know, a traditional cable box downstairs, but the cable box I had upstairs had to connect over Wifi in order to do it. There’s no wires, it was just a wifi access point basically. And like all your Dvr for traditional cable is living in the cloud anyway. So getting off track a little, the point is youtube tv now exists and as a way to deliver this live television content without going through a cable company, it’s month to month completely kind of changing the game there. So in addition to that though, I also am getting my Youtube TV delivered to me on a smart tv which has a lot of other options,

Tyler Pyburn: Which is one of the other things. I mean, I think saying another of it is kind of the apple TV, right? So many folks over the course of the last 10 years have picked up an apple TV. We have one in two rooms of our house and really, like you just said, we upgraded one of the TVS to a smart tv. We’ve completely bypassed the apple TV as well, so we’ve gone over the top, over the top, if that makes sense. Directly to the smart tv because we no longer need apple tv to get on Netflix. We just go directly to one of the apps that’s built in and baked into the television itself, which kind of makes me wonder if in time we’ll ever see things like apple saying we’re going to develop a television now or google say we’re going to develop, I mean – They’re already developing those screens for phones. If some day, maybe they’ll say, hey, let’s make a 50 inch version of it or a 70 inch version of it. Who knows if that’s ever going to happen, but you know, that’s neither here nor there for this conversation. Um, but what’s interesting from a branding perspective with over the top is how we’ve seen more companies and more content creators being able to go direct to consumer themselves. Right? We’ve seen, you know, one of the biggest ones as of late, actually two of them in particular, right, are we’re seeing barstool sports with their pay per view models, right? They’re going direct to consumer and they’re making a million dollars per pay per view event you know – maybe you and I should box. Maybe we’ll make a couple hundred thousand dollars

Phil DiMartino: I don’t know if we have quite the following that they do.

Tyler Pyburn: Highly doubt it we’d just hurt each other and that’d be the end of the company. But, and Cheddar TV, another great example of one that I really liked to follow quite a bit because they’ve created their own, you know, go up against the likes of CNN and Fox News and say we’re going to target the millennial user who’s not watching the cable companies and broadcasting networks work watch. We’re targeting them going over the top, direct to the consumer. At the end of the day.

Phil DiMartino: I think the really interesting thing you bring up Cheddar, Cheddar really started, as you know, they were one of the first people to really use first people, one of the first companies to really use facebook live.

Tyler Pyburn: And Watch, they created their own show, one of the very first companies to do that.

Phil DiMartino: And when I signed up for Youtube TV, I was very surprised to see that Cheddar has a channel listed alongside Fox and CNN and all these other channels listed in the channel lineup is Cheddar. And so now if you’re a youtube TV subscriber, it’s basically as if they have their own network. So that’s a really interesting example of a company that kind of started as OTT first and is now almost going the other way. Like now they’re trying to, you know, create 24 hour programming to support their youtube TV, Youtube TV channel. Um, but a lot of it is repurposed content.

Tyler Pyburn: Yeah. We just saw an example literally as we were kind of researching this, you know, two minutes ago before we came on, we were laughing and saying, oh yeah, this was one of their episodes. I think from Friday, kind of a rerun of some of their content that they run, which is perfectly fine.

Phil DiMartino: So they were kind of OTT first and I think a company that’s the opposite way is espn. So espn was always, you know, based on cable subscriptions, right. Like that’s how you got espn and they’re now changing their whole business model dramatically to try to keep up with the changing times. So they’ve leveraged facebook watch. They’re trying to change the way they deliver. They were, they were pretty deep with snapchat in terms of trying to deliver, you know, 60 second quick hit highlights to snapchat discover and things like that. And their app now, you know, you have to, for some of the content, have a cable subscription for live content, but they’re also delivering tons of content just for free through their APP. So they’re now trying to go the opposite way of what Cheddar did, which is espn was cable first and they’re kind of seeing the writing on the wall, which is that, you know, that’s increasingly not how people are consuming content and trying to figure out, okay, how can we still get our stuff in front of people and make money off of it either via advertising or direct, you know, direct subscription dollars, how can we continue to survive and make money and be a huge multi multibillion dollar company. Um, you know, when people are accessing our stuff mostly through the phone. And it’s interesting to see how those two different sides of the coin are reacting.

Tyler Pyburn: What’s interesting, you start to wonder, there are all obviously all these other services out there like Youtube TV, like apple TV and things like that. But you wonder at a certain point if you know, with the advancements that have smart tvs, if people are just going to have a series of apps on their television that are really the channels or networks that they want to watch. Right? So like an example of like right now when you go to say Verzion – I just went through this because we kind of re-upped our contract with them – because you go for a verizon, you get the – you can choose from three to 10 different packages call it, right? Right. So this is the basic package. This the one with the kids things. This is the one with sports as well as the movie package. This is the all inclusive packages, travel packages, the news package, whatever it may be. And they try to bundle everything together for you. Obviously they charge a pretty penny, but I wonder if at a certain point you basically say, well really, like in my house I watch – my kids watch a couple of shows, my wife Watches Bravo – Feels like way too much – Um, but all the time and a couple of showtime shows. But at a certain point and you saying you know, I’m going to go on this TV and I’m going to subscribe and pay monthly $3.99 for this channel $2.99 for that channel $5.99 for the kids channel or I’ll pay $1.299 for the kids channel just to keep them quiet. But right there just say I’m going to pick and choose and make my own kind of lineup of networks, if that makes sense.

Phil DiMartino: It does make sense. And it does feel like that’s more of the way that live TV is trending. But I think that there’s, there’s a couple of weird different things to this too, right? Like when you think about like the way you watch content on Hulu or Netflix or um, or youtube or facebook, any of these channels is actually a lot more active. Right? Like you’re actively deciding, I’m going to go on Hulu and pick out this TV show. I’m going to go on Youtube and watch this vlogger that I like. I’m going to go on facebook and I’m going to scroll through my feed or maybe I’ll go on facebook watch and watch a show. Um, whereas cable TV is way more actually, it’s way more passive, right. That’s why like advertising works so well on cable TV because it is by its nature, like a little bit more of a passive experience. Like scroll through your channel lineup, maybe land on something you want

Tyler Pyburn: Turn the channel – I’m going to change the channel and watch something different during this commercial break. Right, right.

Phil DiMartino: But it’s a little more passive, right? Like the whole idea is that like you just turn on your TV and you’re going to watch what’s on and that’s almost like from a bygone era. So when you talk about – But then like…

Tyler Pyburn: Well that’s an era of six channels and you didn’t have much choice.

Phil DiMartino: So I think there’s a couple of interesting different things at play, like the, the ability to choose to pick and choose like I’m going to pay for, you know, these channels specifically. I think that’s one path. And the other one is the people who maybe are, you know, I don’t need those channels at all anymore. I’m going to get everything, you know, via a couple of specific apps. I’m going to do everything on demand. Um, so I don’t know, it’s kind of an interesting crossroads here and I think Youtube TV specifically and, and things like that have a chance to change the game because they’re still delivering you that live experience that people don’t quite want to give up on yet. Um, so it’s kind of like a hybrid of, of it’s kind of the best of all worlds, right? You still get the live TV, the local news and things like that without, um, without having to go full bore for the cable subscription.

Tyler Pyburn: What’s interesting is the fact that a lot of these kinds of networks and platforms are becoming creators themselves, right? Like netflix being the company that it goes in there and they’re creating a ton of their own stuff. I think Netflix was the leader, correct me – I mean, I could be wrong, we’ll have to go and check the stats on this, but I believe Netflix by network or by platform got nominated for more Emmys than anybody else out there. So you’re close to something like that, which is incredible.

Phil DiMartino: Certainly something that would’ve like – you never would have believed if someone told you that five or 10 years ago.

Tyler Pyburn: No way, but they are investing in their own original content to draw you into it. They say, okay, we’re the platform that has the best original content come watch us. Right. It was, it was hbo, you know, 30 years ago and they said you’ve got to get hbo because we have the best original content here. Right. And so that’s kind of where it seems to be trending more to.

Phil DiMartino: Yeah. So I guess the question is for like the everyday brand that’s not necessarily a huge media studio like Cheddar or a giant company like espn, like what does this mean for the average brand that just wants to create content and be top of mind? Like what is this shift all mean?

Tyler Pyburn: Personally, I think is that it just means you have to create more. Great for us! Um, but I really do, I just feel like they have to create more because there, there’s even more static in the air, right? They have to cut through even more so it’s create more and create better.

Phil DiMartino: So is it all just about the way I think I agree with you first of all, but I think in addition to creating more, it’s also being smarter about repurposing the stuff you are creating to go to different places, right? Um, and we’ve talked in the past about youtube versus IGTV and, and that kind of thing. Um, but delivering a video to youtube for an optimal experience is a lot different than delivering it to IGTV for an optimal experience in terms of size, requirements and length and all this type of stuff. So I think I agree with you creating more, but also being really mindful and thoughtful and strategic about is where it’s going. Where’s your audience? And how are you getting it to them?

Tyler Pyburn: A great example is, you know, Cheddar TV, they don’t broadcast 24/7 on facebook, right. But they do know what’s going to do really well. And I heard one of the, uh, the podcasts from the CEO, the founder, um, I forget what his full name is, but anyways, he was talking about I know what’s going to go really well on facebook and my own personal linkedin account is just kind of tech reviews and innovative things. It could have been a product that’s been out for four years, but if we happen to show it by way of video and upload it natively, it’s going to do really well. I know that’s going to sell and that’s just all branding for me. So he’s really leveraging not so much for the numbers and the advertisers but from the branding perspective of just getting the Cheddar name out there. Right?

Phil DiMartino: Yeah. No, I think. I think that it’s, I think strategic thinking about where your content is going and how it’s being distributed there and where your audience lives. It’s more and more important because create more, yes, but you can’t be everywhere with everything all the time.

Tyler Pyburn: I mean, with the amount that it would cost to be able to do that. It’s impossible.

Phil DiMartino: So yeah, I think, um, I think the fact now when you think about it, and this has been true for awhile, but it’s, it’s a lot more true now. You mentioned with the rise of smart tvs, like the ability to create long form content and actually have people watch it in an appropriate setting like on a big screen TV. Um, that’s, that’s true for everyone now. Like anybody can basically be treated like a TV network if you want to produce enough content and upload it to your youtube channel that your rabid fans can watch it on a giant screen tv all the time. Like that’s more accessible than ever before. Um, the idea of anybody being able to be a media company that’s directly in touch with their audience all throughout the day, you know, from cell phone on the train to computer at work to TV at home. That’s possible for the average brand more now than it ever has been.

Tyler Pyburn: It’s really interesting because I feel like, you know, we’ve been saying it, every company needs to become a media company that had a totally different meaning five years ago. That meant yeah, you should go ahead and create some content. Now it’s be a media company means almost be a network and be strategic and have advisors is like you said, where the content goes and being mindful of that.

Phil DiMartino: Yeah, and I mean if you think about it, um, you mentioned the way like Cheddar, the Cheddar CEO thinks about like what goes on linkedin versus, you know, whatever. If you’re a company that wants to think about like the lifecycle of your consumer and you’re trying to just be like a B to C company, IGTV in the morning when they’re on their way and on the train, facebook for during the day when they’re trying to avoid doing work and at the youtube, youtube once they’re at home, sitting on the couch either on their phone or on their, on their smart tv. Right? So you can kind of catch them all day long, you know, and trying to be strategic about the different ways in the different types of things you want to get them doing.

Tyler Pyburn: Exactly. It’s wild. It’s awesome. It’s create more, create more, create smarter. He’s Phil, I’m Tyler. I’ll see you guys next time.

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