From Pay TV to OTT: What's Driving the Mass Migration

Karen Sowa
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By Karen Sowa
March 22, 2018

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For decades, traditional cable and satellite providers were the go-to source to find and watch lean-in, long-form video content like TV shows and movies. These sources offer hundreds of channels and program sources (including premium content upgrades), guides, live sports, and more — all without the static of over-the-air broadcast.

Today, the tides are changing yet again. Pay TV options are still popular choices in the U.S., but the data makes it clear: the future of long-form content consumption is in OTT services streamed over the internet.

According to Deloitte’s 2017 Digital Media Trends Survey, more than half (55%) of U.S. households subscribe to paid streaming video services now, a percentage that continues to grow year over year.

Why are people switching to OTT from traditional TV?

Variety of Content

Consumers gravitate towards experiences that are personalized to their preferences and lifestyle. OTT providers offer large, searchable libraries that support easily discoverable, on-demand binge watching.

Deloitte reports that U.S. consumers subscribe to an average of three on-demand streaming services.

Price of Pay TV

As new ways to access long-form content continue to emerge, people increasingly feel the service they get from Pay TV is not worth the price tag.

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According to Tivo’s 2017 Q4 Pay TV Trends Report, price was the leading factor influencing viewers to cancel their Pay TV service, a mindset that continues to grow year over year.

Access to Exclusive Original Content

Some OTT services are coming out with exclusive content that has become popular, but only accessible through OTT channels. An example of this is Netflix’s show, Orange Is The New Black. Apple, Amazon, and Hulu are also among providers that invest in creating original content.

According to Deloitte, 54% of streaming video subscribers said they signed up for a service to be able to watch original content.

Convenience, Mobility, and Flexibility

Viewers can start watching a show on the subway, then finish on their TV screen when the get home with minimal interruptions. They can watch the content they like when it best fits their schedule, instead of adhering to TV’s fixed schedule.

Deloitte reports that 73% of survey respondents value that OTT service allows them to watch content when they want it.

OTT isn’t just for millennials anymore.

OTT was first adopted by millennials, but data from Deloitte shows that viewers across all generations are cutting the cord as the industry evolves.

 

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Pay TV won’t disappear overnight, but it’s clear that OTT is moving in and is here to stay. OTT is the future of long-form content consumption, and is the hottest space in video advertising right now.

 

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When you're ready to grow your OTT sales, we're here to help you accelerate your success!

SpotX has ranked ZypMedia as one of the top 5 DSPs to help it reach 18x year-over-year growth in advertiser dollars spent on OTT in 2017. We help professionals like you sell more over-the-top advertising every day.

You have questions about selling OTT advertising. We have answers. Learn more about how an OTT solution can support your business growth.

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Karen Sowa

Karen is a marketer with over a decade of success in solving business challenges with digital companies. She is currently the Sr. Director of Marketing at ZypMedia and can likely be found drinking an iced latte behind a laptop somewhere in the San Francisco Bay Area.
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