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1 OTTOverview–TheEntertainmentMerchantsAssociation(2015)

DefiningOver-The-Top(OTT)DigitalDistribution

Thisdocumentpresentsanoverviewofover-the-top(OTT)distributionandhowitfitsintotheInternetprotocolTV(IPTV)andvideo-on-demand(VOD)markets.ItexplainstheprinciplesofOTT,considersthedifferencesbetweenOTTandIPTV,looksatthevariousbusinessmodelsintheOTTspace,andprovidesdetailedanswerstothekeyquestionsbeingaskedaboutOTT.

“Digitaldistribution”hasbecomeageneraltermreferringtothedeliveryofentertainmentcontenttotheconsumerthroughtheinternetasopposedtoover-the-airbroadcast,cable,telco,satellite,ordisc-baseddelivery.Therealityisthatthereareavarietyoftypesandmodelsof“digitaldistribution,”andthatcontentdeliveredbytraditionalcable,telco,andsatelliteoperatorscanalsobedefinedas“digital.”

Thegoalofthisdocumentistopresentacurrenthierarchyofthesubsetofdigitaldistributionthatiscommonlyreferredtoasover-the-topdistributionanddefinethemostcommontypesoflicensesandbusinessmodelsusedbythebiggesthousehold-names.

OTT(Over-The-Top)referstothedeliveryofaudiovisualcontentstreamedovertheInternetwithouttheinvolvementofanInternetserviceprovider(ISP)inthecontrolordistributionofthecontent.TheISPisneitherresponsiblefor,norisabletocontrol,theviewingabilities,copyrights,and/orotherredistributionofthecontent,whicharrivesfromathirdpartyandisdeliveredtoanend-user’sdevice.TheISPisonlyintheroleoftransportingIPpackets.It'softenreferredtoas"over-the-top"because

OTT

LIVETV EST VOD

AVOD SVOD iVOD

AuthoredbyChrisRoberts&VinceMuscarella(Rentrak)


theseservicesrideontopoftheserviceyoualreadyget.OTTservicesdon'trequireanybusinessortechnologyaffiliationswiththeentitythatcontrolsormaintainstheinfrastructurethroughwhichthecontentisdeliveredtoend-users.

OTTincludesthedistributionoflinearprogrammingandnon-linearvideo-on-demand(VOD)andelectronicsell-through(EST)content.Smartphones,tablets,computers,gamingconsoles,DVD/Blu-rayDiscplayers,televisions,andset-topboxes/devices(e.g.,AppleTV,FireTV,GoogleChromecast,andRoku.)withinternetconnectivityareabletoaccesscontentviatheinternetfromcompaniesandserviceslikeAmazonVideo,CBSAllAccess,HBONow,Hulu,Netflix,andSlingTV.)

Q:WhataretheOTTbusinessmodels?

A:TherearethreeprimarybusinessmodelsforOTT—Live,EST,andVOD:

1. LIVETV:Asubscription-modelservicewherecontentisstreamedlivetoaninternet-connecteddeviceforviewingbytheend-user(seeOTTdeviceexamplesabove).SomepeoplebelieveIPTVisOTT,butIPTVoperatesinaclosedsystemoradedicated,managednetworkcontrolledbythelocalmultichannelvideoprogrammingdistributor(MVPD):acable,satellite,telephone,orfibercompanylikeU-verse(AT&T).IPTVmeansInternetProtocolTVandreferstothetechnologybeingutilizedinthecontent’sdelivery,notthelicenseorbusinessmodelbeingemployed.OTTTVdiffersfromIPTVasittransmitsstreamsusingHTTP(HypertextTransferProtocol),theprotocolwhichhasbeenusedfordecadestotransportwebpagesovertheinternet.ThechartbelowexplainsthekeydifferencesbetweenOTTandIPTV:

ComparisonofIPTVvs.OTT:

IPTV Over-The-Top(OTT)Technology

ContentProvider LocalMVPD(e.g.,U-verse-AT&T)

Studio,TVNetwork(channel),or3rdpartyservice

TransmissionNetwork

Localtelecom-dedicatedownedorleasednetwork

Publicinternetpluslocaltelecom

ReceiverSTBorDVRprovidedbytelecomorpurchasedbyconsumer(e.g.,TiVo)

Internet-connecteddevicepurchasedbyconsumer(e.g.,phone,tablet,computer,console,set-top-box,etc.)

2. EST(ElectronicSell-Through,Download-to-Own,orDigital“HD”):Electronicsell-throughisthemodelwherebyaconsumerpurchasesorperpetuallylicensesadigitalreproduction.Thislicensedreproductioncouldbeintheformofafiledownloadedtotheconsumer’sinternet-connecteddeviceorlocalharddrive,orviaaccesstothecontentinavirtualstoragelockerorcloud-basedserviceforstreamingondemandtotheend-user.


3. VOD(Video-On-Demand):Contentnotownedorperpetuallylicensedbytheconsumerthatis

eitherstreamedordownloadedtoaninternet-connecteddeviceforviewingbytheend-userattheend-user’sdiscretiononanon-demandbasis.

Q:WhataretheVODbusinessmodels?Doestheconsumerpayasubscriptionfee,paybytransaction,orviewadvertisinginsteadofpayingdirectly?

A:Theshortanswerisalloftheabove:

1. AVOD(Ad-SupportedVideoOnDemand):Ad-supportedcontentmadeavailableonanon-demandbasisforstreamingtoendusers.ExamplesofAVODincludeABCGo,Crackle,Hulu,Popcornflix,andYouTube.Suchservicesareprimarilymadeavailabletotheenduseratnocharge,thoughinsomeinstancesa‘freemium’orhybridAVOD/SVODmodelisemployedwhereonlyaportionoftheservice’scatalogismadeavailableforfree,withtherestbehindasubscriptionpaywall.

2. SVOD(SubscriptionVideoOnDemand):Forafixed,recurringfee,subscribersmayhaveunlimitedstreamingtoalicensedcatalogofcontentforthedurationoftheiractivesubscriptionterm.Subscriptiontermsmaybeasshortasonemonth(HuluPlus,Netflix)oraslongasoneyear(AmazonPrime).

3. iVOD(InternetVideoonDemand):Thetemporarylicense(i.e.,arental)ofaprogramforalimitedandpre-determinedviewingperiod(suchas24or48hours)foron-demandviewingbyanend-user.Theprogrammaybedownloadedandstoredlocallyontheend-user’sdevice,oraccessedonlineviastreaming.

Q:Doestheconsumerhaveperpetualortemporarylicenseforthevideofile?

A:ForiVOD,theconsumerhasatemporarylicensetoaccess,view,and/orstorecontent.InthecaseofEST,theconsumerpaysforwhatislargelyconsideredtobeaperpetuallicensetostore,view,and/oraccessalicensedreproduction.Inbothcases,andlimitedtothedurationofthelicense,theconsumermayhavetheoptionto:(a)storeacopyofthefilelocallyforplaybackonacompatibledevice;(b)accessitonlineforstreamingthroughaninternet-connecteddevice;or(c)both.

Q:WhatdoestheOTTbusinesslooklike?

A:TheOTTlandscapeisquitecomplex.TheillustrationthatfollowsexplainstheflowoftheOTTbusinessstartingwiththeOTTVideoRetailers/Distributors(e.g.,Hulu,Netflix,YouTube—notanall-inclusivelistofOTTVideoRetailers/Distributors).


OTTIllustration:

NamesandlogosforAmazonInstantVideo,CBSAllAccess,HBONow,Hulu,Mgo,Netflix,PlayStationVue,SlingTV,YouTube,andXbox,aretrademarkedandarethepropertyoftherespectiveowners.


OTTProviders(includingU.S.subscriberestimates,monthlyfees,etc.)

OTTProviders(examples)* #ofSubs(est.) Price(Month) Notes

Netflix 42,000,000 $11.99 60,000,000Worldwidesubsestimated.

AmazonVideo 27,000,000 $8.25Includedw/AmazonPrimeannualfee.$8.99mo.fornewmemberseffective5/9/14.$11.99/mo.for4HDscreens.

HuluPlus 9,000,000 $7.99BaseHuluAVODserviceis$0.00.10,000,000HuluPlussubsestimatedbysomeanalysts.

Showtime 1,000,000 $10.99

HBONow 850,000 $14.99 MoffettNathansonestimates1.9Msubs.

SlingTV(DISH) 250,000 $20.00

Noggin(Nickelodeon) 162,000 $5.99

CBSAllAccess 100,000 $5.99

PlayStationVue(Sony) N/A $49.99 Àlacarteoptionsarealsoavailable.

NBCUniversal N/A $3.00

Apple N/A $25.00 Estimatedprice.Servicetolaunchin2016.

WarnerArchiveInstant N/A $10.00

SesameStreetGo N/A $4.00

Popcornflix N/A $0.00 Ad-SupportedMoviesandTVcontent.*Notanall-inclusivelist.N/A–Notavailable

OTTSports(examples)* #ofSubs(est.) Price(Month) NotesNFLNow N/A $1.99 $4.99(outsideofUS,Mexico,UK)

NBALeaguePass N/A $200.00 LeaguePass(fee)

MLB.TV N/A $20.00 Basefee.Premiumoptionsalsoexist.

MLSLive N/A $15.99 $37.99Season

NHLGameCenterLive N/A $4.95

WatchESPN N/A $20.00

PGATourLive N/A $4.99

WWENetwork N/A $10.00 *Notanall-inclusivelist.N/A–Notavailable

Note:SubscriberestimatesandpricingasofJune2015


Authors:

ChrisRoberts,SVPSales,OnDemandEverywhere,RentrakChrisRobertsChrishasbeenatRentrakformorethan25yearsandstrivestobeonthecutting-edgeoftheconstantlyevolvingentertainmentindustryinordertodeliverRentrak’sclientsthemostinnovativeandusefulproductsandservices.Robertshelpedcreatetheindustry’sdigitalmeasurementserviceformoviesandTVcontentin2013,Rentrak’sDigitalDownloadEssentialsIndustry™.Usedbyallthemajorstudiosandnetworks,theserviceprovidescompetitiveESTandiVODintelligenceinanevolvingdigitallandscape.ChriswaslistedasoneofHomeMediaMagazine’s“DigitalDrivers”in2014and2015.ChrisalsoservesasamemberoftheEMADigitalSteeringCouncilandisalsoontheboardofdirectorsofOurFamilyInAfrica,aninternationalnon-profitorganizationprovidingsupporttoorphansintheDemocraticRepublicofCongo.VinceMuscarella,VPDigitalStudioServices,RentrakHonoredasoneofHomeMediaMagazine’s“DigitalDrivers”in2014and2015,Muscarellahasmorethan13yearsofdigital,VOD,andhomeentertainmentindustryexperience.AftercreatingandleadingMillenniumEntertainment’s(nowALCHEMY’s)digitaldistributionefforts,MuscarellajoinedRentrakin2012,workingwithmajorstudiosandindiestohelpgrowRentrak’sDigitalandVODmeasurementservices.

GlossaryofKeywordsandAcronyms:

• OTT–Over-The-Top• iVOD–InternetVideo-On-Demand• EST–ElectronicSell-Through• DTO–DownloadToOwn• VOD–Video-On-Demand• AVOD–Ad-SupportedVideo-On-Demand• SVOD–SubscriptionVideo-On-Demand• HD–HighDefinition• IPTV–InternetProtocolTelevision• HTTP-HypertextTransferProtocol• MVPD–MultichannelVideoProgrammingDistributor• STB–Set-Top-Box• DVR–DigitalVideoRecorder• ISP–InternetServiceProvider

©EntertainmentMerchantsAssociation(EMA).AllRightsreserved.TheinformationcontainedhereinissubjecttochangewithoutnoticeanddoesnotcarryanycontractualobligationfortheEMAorRentrak.Namesandlogosforcompaniesmentionedinthisdocumentarethepropertyoftherespectiveowners.

ott live tv est vod avod svod ivod between ott and iptv ... live tv est vod avod svod ivod ......

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