OTT vs Traditional TV, discover why viewers are ditching traditional TV for OTT platforms. Learn the key difference between OTT and CTV in our expert guide!
Once upon a time, we and our families would gather around a TV at a set hour to watch our favorite family drama’s or shows. We all turn up on time, because we don’t want to miss out, as there were no pre-records to watch later.
Unfortunately, times are rapidly fading away with technology advancement.
Today, using Over the Top (OTT) platforms like Netflix and Disney, viewers can watch their favorite content anytime, anywhere at their convenience.
In light of this, streaming surpassed traditional TV with a record of 38.7% viewership in 2023. This has brought about the battle for dominance between each platform.
Hence, we’ll explore OTT vs Traditional TV, why viewers are shifting from cable to OTT and what the future holds for traditional TV.
Let’s begin.
Table of Contents
Key Takeaways
- Content ranging from movies to music are uploaded, streamed and distributed on OTT platforms for users.
- Streaming content directly over OTT platforms is data consuming which incur extra cost for users with a tight budget.
- In contrast to OTT streaming where viewers watch content on demand, traditional TV requires viewers to turn in at specific times to watch a program.
- Viewers have no control over the types and frequency of commercial breaks on traditional TVs.
- Looking forward, traditional TV has to adopt a hybrid model; live broadcasting and on-demand streaming or fade away with time.
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What is an OTT?
OTT or Over-the-Top model refers to content streamed over the internet without needing to subscribe to a cable box or satellite dish.
Content streamed on OTT includes movies, TV shows, live sports, music and podcasts. Popular OTT platforms are Netflix, YouTube, Hulu, Amazon Prime, Spotify and Disney+.
Furthermore, OTT platforms can be categorized based on how they’re monetized:
- SVOD (Subscription Video on Demand) like Netflix
- AVOD (Ad-supported Video on Demands) like YouTube
- TVOD (Transactional Video on Demand) like iTunes
How Does OTT Work?
OTT content is delivered via internet connections, accessed through apps or websites.
Content ranging from movies to music are uploaded, streamed and distributed on OTT platforms for users. Users interested in any of the content then have to download the app or connect via the website to download the content.
After an account is created by the users, content can be streamed for free with ads, or through paid subscriptions. Also, content on OTT can be saved on a user dashboard and can be accessed anytime. Viewers can as well start watching a video before the entire content gets downloaded.
A clear understanding of how OTT works helps you choose which platform suits your entertainment preferences; OTT vs traditional TV.
Pros
- Easy navigation: It is easy to create an account on OTT platforms. Likewise, streaming your favorite content at any time and any location.
- Device compatibility: OTT apps and platforms are highly compatible with different devices. This includes computers, tablets, smartphones, and even smart TVs.
- Cost effective: You can follow up on your favorite entertainment video via OTT platform at low or zero cost. This is because some content is free and others come with flexible pricing.
- Content variety: OTT platform offers users a vast options of content to stream. This includes movies, Tv shows, documentaries, podcasts and more. Hence, there is content for every user’s preference.
Cons
- Internet dependent: Users need a stable internet connection to experience a smooth viewing without buffering or low content.
- Content restriction: Often, not all content is available for free. You have to pay to access those premium content.
- Data hitches: Streaming content directly over OTT platform are data consuming which incur extra cost for users with a tight budget.
OTT Service Platform Provider
OTT vs traditional TV in terms of hosting, the former requires a reliable service platform provider.
Perhaps, you’re considering starting an OTT service? If yes, below are top OTT service platform provider:
Adilo
Adilo is a robust Over the Top (OTT) service provider with advanced video streaming features. It combines security, monetization, analytics and more features in delivering quality streaming to meet demands of businesses, online creators and marketers.
Here are key features why Adilo is the best OTT service provider in the market:
- Unlimited hosting service
- Ad-free streaming
- Video split testing
- DRM and security
- Video CMS
- Video Playback
- Screen and camera recorder
- Customization
- Monetization
- Analytics
Wistia
Wistia is a reliable Over the Top(OTT) service provider that enables you to host, manage and optimize your videos effortlessly. You can leverage Wistia’s Content Management System (CMS) including folders tags and secured sharing options. Additional tools include analytics tools, monetization options, SEO tools.
Vidyard
Vidyard is an advanced video platform that offers tools like AI-powered script generation, video hosting and automated processes. This helps optimize your OTT service with its robust analytics. Also, its customized video messaging, monetization options, and customization option guarantee quality video production.
What is Traditional TV?
Traditional TV or broadcast TV refers to the standard way of watching television programs scheduled on a cable, satellite or terrestrial networks.
In contrast to OTT streaming where viewers watch content on demand, traditional TV requires viewers to turn in at specific times to watch a program.
This remains a key difference between OTT and CTV, as content on OTT can be streamed even after the event has ended, whereas it isn’t possible with CTV as its programs are scheduled.
Examples of traditional TV include CBS, NBC, ABC and BBC.
How Does Traditional TV Work?
Traditional TV works through signals to transmit scheduled programs to viewers who are connected to the signal.
However, a user must be connect via one or more of the below system to access traditional TV programs:
- Cable: Signals are transmitted through underground cables connected to a user TV.
- Satellite: Signals are transmitted through satellite to user satellite dishes.
- Terrestrial networks: Signals are transmitted over the air and picked up by TV antennas.
Pros
- Reliability and quality: Traditional TV programs are broadcasted in high quality without buffering issues that come with internet connectivity.
- Live broadcast: Traditional TV offers access to real time events like sports, news, or live concerts.
- Access to local content: Traditional TV often comes with local channels that provide regional news for users within such regions.
- Broad variety of content: While not diverse as OTT platforms, traditional TV still broadcasts a variety of programs including shows, news, music, or sports.
Cons
- Lacks flexibility: Traditional TV programs are broadcast based on scheduled timing. So viewers have to turn at such timing or miss the program.
- Cost: Cables and satellite subscription are expensive, when compared with OTT platforms plans. Often traditional TVs come with extra cost for premium channels.
- Limited control over Ads: Viewers have no control over the types and frequency of commercial breaks on traditional TVs.
OTT vs Traditional TV, Which is Better?
OTT platforms and Traditional TV both have their strengths and weaknesses. However, OTT platforms are more preferable compared to traditional TV based on the following comparison:
Content Accessibility and Convenience
OTT platforms like Netflix and Disney grant viewers access to view their favorite video content at any time, anywhere and on their mobile devices. This is more convenient for today’s modern society where time is a factor to consider.
According to Forbes, 99% of U.S. households subscribe to at least one streaming service.
In contrast, traditional TV programs are more rigid, having fixed timing/schedule to every program. This means, once a program is missed, it can’t be accessed by a viewer, although the use of DVRs allow viewers to record programs, adding some flexibility.
Content Variety and Customization
OTT platform attracts new subscribers and retains old ones by regularly updating their content library. This platform offers viewers a vast range of contents including movies, series, documentaries, sport and even music. Hence, a viewer can’t get bored or repeat content.
In contrast, traditional TVs broadcast programs are based on selected channels including news, sports and lifestyle programs. However, this is not subjected to personalization based on a viewer preference as with OTT platforms.
Cost
OTT vs traditional TV, the former is more cost effective and affordable by most viewers.
OTT services come at affordable cost with a cost range of $7 to $20 per month on platforms like Netflix, Hulu or Disney+. In contrast, traditional cable or satellite subscription can cost on an average $100 or more per month, depending on the plan and add-on channels.
This explains why a 34.57% decline in cable subscription was witnessed in the U.S.
Ad Control and Viewer Experience
Ad display during content can be annoying and disrupts the flow of the content.
That said, most OTT platforms like SVOD offer ad free viewing with subscription fees. Viewers have the flexibility to choose to watch ads or not.
Unfortunately, this isn’t true with traditional TVs where ads are a primary source of revenue. This has led to frequent commercial breaks during programs. Studies show that an average hour of a traditional TV program contains about 15 minutes of ads which can disrupt viewer experience.
Live Programs
While OTT platforms are known for on-demanding streaming of programs, it has included real-time streaming into its services. This gives these platforms an extra advantage over traditional TV as viewers can access live sport, news or events through OTT platforms.
On the other hand, live programming remains the strength of traditional TVs especially for sports and real-time news broadcasts. Hence, some viewers still prefer to stream live events via traditional TV. This is because it offers quality streaming without buffering issues associated with internet connection as with OTT platforms.
Reasons for the Shift From Traditional TV to OTT?
In recent times, viewers are ditching traditional Tvs for OTT platforms likewise businesses. Here are reasons for the shift:
Consistent Revenue Stream
OTT has become a profitable business model as it comes with predictable revenue and high profit margin. OTT revenue is derived mainly from subscription fees per users which are stable and consistent.
In contrast, traditional TV relies solely on ad revenue which are not stable and fluctuate based on viewership. Hence, it’s no new news that many are venturing into OTT services.
Cost Effective
OTT platforms come with affordable subscription fees that can be made in tiers; monthly, quarterly, annually or per content stream depending on viewer preference.
This affordability makes OTT platform sought after by all groups of viewers including college students, families and organizations. Additionally, OTT platforms are open about their cost without a hidden fee after subscription. This enables users to know exactly how much to pay ahead of time.
Content Variety
New viewers keep jumping to OTT platforms because of the variety of new content.
Both new and previous viewers can’t exhaust the variety of video content, shows or programs available on OTT platforms. These platforms also provide thousands of video titles across genres, languages and countries.
This caters for the needs of diverse viewers including kids, teens and adults alike.
Flexibility and Convenience
You want to catch up on your favourite drama you missed? OTT platforms have you covered.
The flexibility of viewers to access content at anywhere, anytime and on any devices is a core reason for the drastic shift from traditional Tvs to OTT platforms.
This flexibility suits the modern busy lifestyles, enabling viewers to access shows on the go or download them to watch offline.
Ad Free Option
Most OTT platforms offer ad-free streaming especially on premium plans. This means, viewers can decide to watch ads or not depending on their preference.
Unfortunately, this choice isn’t available with traditional Tvs streaming as ads are their primary source of revenue. Hence, viewers have to watch commercial breaks on traditional TV shows irrespective of their subscription plans or choice.
The Future of Traditional TV?
It is uncertain what the future holds for traditional TVs, although it has experienced a decline in viewers shifting to OTT streaming platforms.
In 2023, streaming captured 38.7% of total TV usage in the US and it spread globally. This shift is especially notable amongst younger audiences, with 84% of people aged 18-29 primarily consuming content via streaming.
Unfortunately, as viewership declines, so does advertising revenue for traditional networks declines.
Despite these challenges, traditional TV still retains dominance in live broadcasts and sports. Hence, to remain competitive, many traditional TV networks have launched their own streaming platforms. For instance, NBC introduced Peacock and CBS expanded with Paramount+.
Looking forward, traditional TV has to adopt a hybrid model; live broadcasting and on-demand streaming or fade away with time.
In the future, traditional Tvs are likely to become a niche option, serving live events and older viewers as streaming is set to dominate.
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FAQs
Why are viewers shifting from traditional TV to OTT platforms?
Viewers are shifting to OTT platforms from traditional TV, because OTT platforms offer them the convenience to stream their favorite content, anytime, anywhere and on any device. Also, OTT platforms offer affordable subscription plans compared with traditional TV.
How does advertising work in the OTT model?
Some OTT models like AVOD (Ads-supported Video on Demand) still rely on ads for revenue generation. However, this is based on a viewer’s preference and choice. As these platforms grant viewers access to free content in exchange for ad display during content.
What is the future of traditional TV?
It is uncertain what the future holds for traditional TVs, although it has experienced a decline in viewers shifting to streaming platforms. In 2023, streaming captured 38.7% of total TV usage in the US and it spread globally.
Despite these challenges, traditional TV still retains dominance in live broadcasts and sports. Hence, to remain competitive, many traditional TV networks have launched their own streaming platforms. For instance, NBC introduced Peacock and CBS expanded with Paramount+.
Looking forward, traditional TV has to adopt a hybrid model; live broadcasting and on-demand streaming or fade away with time.
What are the types of OTT services?
OTT platforms can be categorized based on how they’re monetized. This includes SVOD (Subscription Video on Demand) like Netflix, AVOD (Ad-supported Video on Demands) like YouTube and TVOD (Transactional Video on Demand) like iTunes.
Final Thoughts on OTT vs Traditional TV
OTT platforms are generally preferred by most viewers compared to traditional TVs. This is solely because it is flexible, cost-effective, ad-free and user-friendly.
According to Forbes, 99% of U.S. households subscribe to at least one streaming service, indicating the rapid shift toward streaming platforms.
However, traditional TV remains a reliable source for live broadcast due to its quality streaming without dependence on internet connections.
Recently, OTT platforms are winning the battle and gaining dominance. But, choosing between OTT vs traditional TV all boils down to a viewer’s preferences as both platforms have their strengths and weaknesses.
Viewers who value on-demand content and are cost conscious can opt for OTT platforms. Whereas, those who prefer real-time events and local news content, should stay tuned to traditional TVs.
Do read our complete guide on how to build a profitable OTT service platform here.
Experience: Happiness Hassan is an SEO content writer and strategist with over 7 years of experience helping brands boost visibility, engagement, and sales.
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Felix is the Senior Content Editor and Strategist at Adilo, where he harnesses his expertise in social video marketing, online video platforms, video editing, e-commerce, e-learning, and marketing to to help businesses drive results. With a keen eye for storytelling and a pulse on industry trends, Felix crafts actionable content that empowers brands to elevate their video marketing strategies and thrive in the digital landscape.
