According to The Diffusion Group, demand for Over-the-Top (OTT) broadband video services is comprised of distinct consumer segments driven by very different needs.
“While Over-the-Top video delivery is widely discussed, it remains poorly understood,” notes Michael Greeson, author of TDG’s latest report. “The dominant understanding of OTT is based on a conceptual error, a category mistake which conflates cord cutting (i.e., cancelling one’s PayTV subscription and watching only web-based video) with the more general concept of OTT (i.e., the delivery of web-based video directly to the TV via a broadband connection).”
According to Greeson, pundits have been overly eager to use cord cutting’s failures to dismiss or write-down the long-term potential of OTT. “To fall victim to this confused logic is a dangerous mistake for both incumbents and competitors. The long-term prospects for OTT video delivery are solid and have little to do with the current trend of cord cutting. In fact, the most immediate opportunity for OTT providers is as a supplement to existing PayTV services, not as replacement for them.”