What Is the Difference between OTT and IPTV? How Do They Function?

Tips & TricksIPTV vs OTT
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    With the dynamic development of OTT and IPTV, traditional television providers risk getting left behind unless they decide to adopt one of the video-on-demand (VOD) models. Most people today have no time to sit in front of their televisions at a fixed time to capture the content they want. Internet-based streaming services allow consumers to save plenty of their time and nerves. 

    Let’s recall how traditional television works first. Broadcasters deliver signals in real-time so that viewers could receive them to watch shows. Consumers can only view what is offered. It is impossible to dictate what to watch and when. It’s all about the availability of shows and films from a broadcaster. That is not what most people prefer today.

    With fast internet speeds dominating the world, OTT and IPTV platforms can provide simple access to video content when and where users want it. The over-the-top market alone has achieved $121.61 billion in size in 2019, and is expected to hit $1,039.03 billion by 2027. However, how should you know which one to choose – IPTV vs OTT?

    What is an OTT service? Interpretation and features

    OTT means over-the-top. This term refers to streaming across various devices whenever and wherever a user is able. In other words, it is a brand new way to deliver movies and other types of television content over the web with no need to involve traditional cable, satellite, or broadcast providers. 

    The fast growth of OTT’s popularity is one of the reasons why the percentage of those who have satellite/cable TV in the United States has decreased from 76 percent to 56 percent in just half a year in 2021 according to Pew Research Center, and this number will continue to drop. By 2030, it may be down to 26 percent.

    OTT model proposes streaming media as a standalone product. Usually, it is applied to video on-demand (VOD) platforms. However, can also be used in the context of:

    • Messaging services
    • Audio streaming services
    • Web-based voice calling

    Over-the-top monetization occurs via both free and paid subscriptions. Some OTT services offer subscriptions on a monthly or yearly basis. They are referred to as Subscription Video on Demand (SVOD). Others charge no fees to consumers but those services earn profits by inserting ads, and that is known as the Advertising-Based Video on Demand (AVOD) model. 

    Finally, some OTT services operate using transactional video on demand (TVOD) and hybrid models. TVOD means that audiences can buy access to a particular piece of content, and the hybrid model combines any of the previously mentioned approaches. The general idea is, as long as a viewer has a stable internet connection (locally or via a mobile network), they can view whatever they want at any time.

    Connected TV vs OTT – those are two other terms often confused. Connected TV, or simply CTV, stands for internet-connected televisions while over-the-top stands for content streamed via the web instead of traditional cable or satellite television. CTV is used for devices that content is streamed on while OTT means the content itself. Still, both CTV ownership and OTT subscriptions are growing exponentially, so those are two huge opportunities for savvy marketing specialists.

    How does over-the-top work? How is the content delivered?

    The main thing a user needs to access content in the case of OTT is speedy, stable internet. Also, they will need a connected device compatible with certain applications or browsers. Such services allow bypassing third-party networks.

    • Smart TVs. The most recent television models usually include pre-setup OTT applications. In addition, Smart TV owners can download apps as well. The examples of Smart TVs are Google TV, Ubuntu TV, LG Smart TV, and Roku TV. Interestingly, Roku is becoming the most powerful company in streaming, with a 38 percent market share in the United States and a 31 percent market share in Canada.
    • Desktop computers. The majority of PCs today support over-the-top videos via special applications or browsers.
    • Mobile gadgets. Consumers can download and install OTT solutions right to their phones and tablets from digital stores that offer such options, which make it possible to stream on-the-go.
    • Digital media players. As an example, we can consider gaming console companies such as Xbox and PS that can download and run over-the-top software.

    OTT platforms deliver videos upon request and in a unicast way so a single stream is served to a single device/recipient each time.

    Internet providers are obligated only to provide the infrastructure so that such video platforms can stream content. As for restrictions, it’s important to consider adjusting to a great variety of networks and gadgets to serve videos over the public web. Three factors determine the performance of over-the-top video services:

    • Available bandwidth
    • Internet speed
    • Connectivity speed

    One way that OTT video platforms mitigate the influence of network conditions on the user experience is the adjustment of the stream quality to accommodate the end-user’s gadget and bandwidth. This method prevents users from loading video content for too long as well as long buffering.

    What is an IPTV service? Interpretation and features

    Another acronym to have a look at is IPTV. It stands for internet protocol television. In other words, that is when TV programming is communicated with the help of internet protocol.

    Instead of transmitting films and shows through light pulses in, for example, radio waves, IPTV delivers video content via the internet. IPTV makes it possible to access VOD content and watch live broadcasts. This way, consumers obtain more control and features. It all leads to a better personalized experience.

    How does IPTV work? How is content delivered?

    From saving content to its submission, IPTV is dynamically changing how consumers feel about media. No longer are cable companies in control of when and how users watch videos of their preference. 

    With the help of IP, this model delivers video content to an audience. IPTV has servers for storing videos, which makes it possible for subscribers to request any programs they want. Once a user clicks on any program from the list, content from various sources is divided into data packages and delivered online. Shows and movies are transmitted via fiber-optic cables. Requests are submitted and programs are sent back to the chosen playback device via the IP. Before that, the requested files are compressed and optimized for streaming.  

    The main condition is that a user’s television should read the signals obtained over the IP. Mind that most TVs cannot install an internet protocol TV service without external assistance. This means that many users have to purchase an IPTV set-top box, which is used to convert signals into a readable format for a specific device. Usually, AV cables, HDMI, or a Wi-Fi connection are used to connect the boxes to a television. Streaming IPTV from a PC does not require such a box as this device can read the data received via the IP.

    Starting from transcoding and ending up with traditional signals to IT-friendly signals, there are many factors that may make IPTV’s architecture complex to understand. However, the fact that this model allows users to watch whatever they want makes mastering this architecture worthwhile.

    How to choose the right option: IPTV vs OTT – pros and cons

    IPTV or OTT? Between these two, which one is more suitable for you? Just like OTT, IPTV most commonly uses VOD or time-shifted media. However, they are not the same. First of all, many consider over-the-top video platforms simpler than IPTV solutions. Accessing such services is possible by simply having a hardware device and stable internet. 

    Many hardware devices offer pre-installed OTT applications. If not, consumers can download the needed software with little fuss. Many modern gadgets are compatible with over-the-top video platforms. Still, let’s have a closer look at the differences between these two models.

    1. Price

    When we speak about prices, various monetization models come to mind. OTT offers a hybrid model. It means that, in most cases, a consumer will not have to pay anything to access content of their interest or pay a certain fee to avoid ads and access exclusive content.

    IPTV is an opposite when it comes to pricing as it monetizes content through a subscription video on-demand model, also known as SVOD. Consumers who choose IPTV should pay to access the content. 

    1. Availability

    It’s possible to set up over-the-top apps on compatible gadgets that have a consistent internet connection to watch programs from any part of the world whenever a user wants. Although IPTV can only operate on the devices within a household. In addition, a consumer may need to purchase extra hardware to access IPTV content. One example of such hardware could be a set-top box and router.

    1. Content delivery and network

    Over-the-top distributes videos via the public internet while IPTV suggests content via Local Area Network/Wide Area Network. OTT platforms fully depend on internet bandwidth and speed; IPTV platforms provide sleek delivery as they do not demand much from internet bandwidth.

    1. Quality of Content

    IPTV offers high-quality video content for higher prices. Internet protocol television does not use public internet and it offers faster loading times. Also, IPTV is usually associated with better sound and image quality.

    1. Service Reach

    So, which of the two services is simpler to access? If we consider OTT, registering is hassle-free and rather quick. The log-in process is the same as on online stores or gaming platforms. Over-the-top services are associated with a global audience while IPTV is mainly localized.

    OTT went global thanks to its freemium plans. No matter how much consumers are eager to spend, they all can afford over-the-top services though they have to watch all ads when choosing a fully-free option. The price also impacts accessibility and coverage. Those consumers who cannot stand advertisements have an option to pay a subscription fee to enjoy their favorite shows without commercials.

    IPTV may cost up to thirty dollars monthly. However, some households in the United States pay way more to get more features and maximize speed and quality. The service reach is lower in this case. The main reason why IPTV services cost more than over-the-top services is higher operational expenses caused by the required gear and infrastructure.

    Final thoughts: so, which one to choose?

    The choice depends on what you are planning to achieve, as well as how much you are ready to spend. Sure, some other factors mentioned above matter as well. If we consider OTT as the preferred option, its primary benefit is that almost each content publisher and organization can develop an over-the-top app and expand their business using this model. That is when VlogBox can step in and lend you a helping hand.

    At the same time, IPTV is about high-quality videos that load quickly. Watchers can access exclusive content, but it will cost more than OTT.