What is OTT TV, and How Is It Better Than Cable for Streaming TV Shows?

Friday, April 12, 2019

Pay TV — cable and satellite television — saw an increase in lost subscribers in 2018, according to the latest data from Leichtman Research Group. Nearly 2.9 million (or 3.1 percent) of cable and satellite subscribers left in 2018, compared with the 1.5 million (or 1.6 percent) the year before.

Satellite providers led the pack, making up more than 80 percent of leaving subscribers, though cable providers still saw a year-over-year increase in their losses.

So, where all they are going? Many are springing for OTT.

What Is OTT TV?

OTT TV is over-the-top television, or viewable content that is delivered over the Internet. Synonymous with streaming, OTT TV brings digital media straight to the consumer, taking out the middle men — telecommunications, multichannel television and broadcast television providers.

You’ve probably seen all the studies that seem to predict the end of cable TV is nigh. But, Chicken Little, that isn’t quite the case.

During the same period, over-the-top television (OTT TV) gained more ground with Sling TV and DIRECTV Now adding subscribers by about 19 percent, the Leichtman Research Group found. Note that those two providers are the top publicly reporting virtual service providers — those that provide a form of OTT through live, linear and on-demand content — so the figures may only skim the surface.

Taking one step back, though, the group further found that, since pay TV’s peak in 2012, it has lost only 6 million subscribers, while publicly reporting virtual service providers only gained 4 million.

So, while the number of streamers seems to increase annually, most viewers haven’t fully committed to become an OTT-only household. In fact, studies show that households are bundling in their own way — usually supplementing basic or premium cable with an OTT solution.

Comparing Cable and OTT Streaming Solutions

The biggest drivers of Internet TV are price and variety of content. Cable’s biggest draw, of course, is live TV.

But, over-the-top TV has started in the last few years to penetrate that field with its linear options. The likes of Sling TV, DIRECTV Now, Hulu Live and even YouTube TV have started offering consumers channel lineups, allowing viewers to rewind from the start, watch live or catch a show on demand.

Similarly, many top cable providers have one tool in their pocket that OTT TV providers do not: service bundling. A tried and true tactic for the industry, bundling allows cable companies to offer lower prices on all services — TV, Internet and even phone. And, as a twist, they’ve begun partnering up with some streaming solutions — namely Netflix — to offer an even better bundle, according to eMarketer.

So, where do you stand? Is your household one of many that combines some form of traditional TV — network, premium cable or even satellite — with some streaming options? Or, now that linear OTT TV options are available, are you considering cutting the cord altogether?

If you’re not quite sure how cable and some of the best streaming TV options stack up, take a look at our chart below for an in-depth comparison.

Now, there are a few things to keep in mind. An American household has an average of three streaming services. If that’s the case, and one of those three options is linear OTT TV, then you will be paying more per month than the costs listed in the chart. As already stated, pricing will differ for a number of reasons, though the FCC’s average covers cable alone, and no bundles or special offers.

Have you gotten a little closer to discovering which form of television your household needs? If it’s OTT TV, you’ve got a little more work ahead of you to find the best streaming TV options.

Popular Streaming Services

As we noted earlier, there are two main types of streaming services: video-on-demand and linear.

The three most popular video-on-demand streaming services are Netflix, Hulu and Amazon Prime Video. These three options have rotating selections of movies, and sometimes shows, that change in availability per month. That’s why you’ll find lists of new releases on each streaming service, along with what’s leaving, per month. Each of the three has also entered the ring with original shows, while Netflix and Amazon have been producing original movies as well. Hulu, though, is now offering a live TV option, blurring its lines with linear OTT TV, and Amazon has dipped its toes into live streaming Thursday Night Football with its partnership with the NFL. (There’s more to come on the horizon for Amazon, too, with “Channels” coming on in May.)

The second popular type of streaming service is linear OTT TV. As we described earlier, these look most like a cable package, albeit with fewer channels. The most popular here are Sling TV and DIRECTV Now, though Hulu Live and Sony’s Playstation Vue are inching their way up as well.

That leads us to a third streaming TV option: standalone channels. Yes, many channels — network and premium television — are offering their content live and on demand through apps. Many will require authentication to log in, so you’ll need access to that channel. Know that not all will accept your linear OTT TV subscription as a way to log in, though it is increasingly becoming an option. Some standalone channels are offering subscriptions on their own, including HBO through HBO Now, ESPN through ESPN+ and the soon-to-be-launched Disney through Disney+.

Re-evaluating Your Needs

Now that you know all of your options, you may want to re-evaluate your television needs. And, while you’re at it, remember that adding on more Internet TV options could mean your that you’re placing a greater workload on your network connection.

Do you have the speed you need for your viewing pleasure? Learn how Kinetic Internet can be the perfect pairing for your all the streaming on your over-the-top services.