Over-the-top Media

over-the-top media

A growing opportunity for Advertisers

The first TV was invented in 1927 by a certain Farnsworth (the inspiration of the celebrated Futurama character). Since then, it has only become more and more popular and, even in the age of smartphones and ubiquitous internet, the TV still reigns in the living room. 

Television, both in terms of the device itself and the service, has a long history of adapting to changes. The basic form factor has gone through a litany of the course of its long lifetime: the transition from black and white to color, from antenna to satellite/cable, from giant CRT screens to flat screens. 

The television has had to change and adapt, but since the advent of the home video experience, nothing has been able to dethrone it. 

An ongoing development over the last half-decade has been the increasing importance of so-called “Over-the-top” media. 

This is media, generally video, that is served directly over the internet rather than through traditional means of broadcasting (such as by antenna, satellite, or cable). 

The most popular over-the-top media services would be Netflix, Amazon Video, Hulu, HBO Streaming, etc. 

Over-the-top is shaping up to be the future of television. 

But just how important is television, really?

TV is still very important

When it comes to video consumption, television is still incredibly important. It’s the king of both video consumption and video games. 

TV sales, ad spend, and viewership still testify to its dominance in this domain. 

TV sales 

To illustrate the continued strength of television and its enduring place as a means of media consumption, lets quickly look at television sales. 

TV set sales are very seasonal. The overwhelming majority are sold in the fourth quarter every year as people buy them as gifts for themselves and others. 

According to Statistica, in the fourth quarter of 2012, 18.42 million were sold in the United States. In the same quarter four years later (2017), 21.57 million were sold. 

In comparison to the population of the United States (320m), that is a lot of TVs being sold every year – especially when you take in the other 18 million sold on average in the first three quarters of the year. 

So the television market in the United States is quite healthy. At least when it comes to the physical sets themselves. 

TV viewership

According to Techcrunch (statistical gathering via Nielson) (, the average American adult spends six hours per day watching some kind of video (2018). The vast majority of that time, 4 hours and 46 minutes, was spent watching traditional television (Live and recorded combined). Following in a distant second was TV-connected devices such as game consoles, Apple TVs, etc. This took up around 45 minutes on average. 

Video viewed on smartphones and tablets came in at ten and five minutes, respectively. As you can see, traditional TV still dwarfs all other forms of video consumption in terms of raw viewership. 

According to the same report, 88% of US adults watch TV every week.

Of course, every adult in the US all lumped together is a very wide demographic, but it effectively illustrates the continuing dominance of television. 

Ok, that’s great, but what about when it comes to advertising?


TV advertising is still an enormous industry. In the US alone, it accounted for around 70.22 billion USD in 2017 (statistica). 

This ad spending has plateaued and is expected to enter a soft decline in 2020 and continue until at least 2023. 

One of the primary things that is keeping the traditional TV advertising industry buoyant in a digital world is live sports. 

Live sports are huge all over the world, and the entire apparatus for broadcasting them live has been built around cable and satellite infrastructure. 

The way broadcast rights for the games are sold only further entrenches the industry in this legacy broadcasting mindest. But, out-dated or not, it is still an extremely profitable industry. 

But even if live sports are propping the older television industry up, it’s changing. While TV sales and TV ad spend have both remained pretty steady, the means by which video reaches the television is starting to change.

How it’s changing

This change is occurring at two levels.

One is at the hardware level. Major television manufacturers have started building TVs that have build-in systems that allow them to connect to the internet. They tend to have several built-in apps like Amazon Prime Video, Netflix, Hulu, Youtube, etc. 

This is called Connected TV, and it’s becoming an increasingly large part of total television sales. 

However, this change is also occurring at a distribution level. The days of cable and satellite are starting to come to an end – among the younger generations, streaming is already vastly preferred. 

Distribution of television and video content over the internet rather than by traditional means, be they analog or digital, is known as “over-the-top.”

Almost all streaming services and web-based content delivery systems fall under the definition of over-the-top media. Netflix, Amazon Prime Video, Hulu, HBO GO, etc. 

It’s NOT connected TV

It’s extremely important to make the distinction between Over-the-top media and Connected TV. Connected TV is simply a “smart” TV or a TV connected to the internet through a console, Roku, AppleTV, etc. 

Over-the-top media services, on the other hand, are the media services that you can access over the internet using a Connected TV. 

So the former is the service itself and the means by which the actual content is distributed. The latter is the endpoint connection between your television and these services. 

As Connected TV is pretty much useless without Over-the-top media services, the two can often be confounded. However, they are very different things. 

Where it’s headed

Certain people have been wont to say that history repeats itself. Others say it simply rhymes, and others still say that the whole idea is absurd given the inherently different environment and circumstances that exist in each epoch. 

Whatever the case may be, history does seem to be repeating itself with television. 

While Netflix streaming originally made its mark on the industry by making entire movies and whole seasons of shows available on-demand, they quickly ran into the issue of binge watching. 

When given the opportunity, many consumers will watch entire seasons – or even entire shows – all at once. 

This process, known as “binge watching,” 

While in the past, traditional TV show release schedules moderated user consumption of any given show, with streaming services, an entire library of TV shows could be consumed all at once at any given time. 

So the cliff hanger that was supposed to keep you hooked and make you return for more a week later, now just drove you directly to the following episode. And so on and so forth, pretty soon you’ve watched an entire show in one sitting. 

Binge watching was one of the original selling points of streaming services, but later it came to undermine their own business model. 

By giving customers unmitigated access to all the things they wanted to see and watch, they quickly ran out of everything that they wanted to see. 

And when they ran out of things that they wanted to see, they ran out of reasons to continue paying for your service. 

Back to the (digital) roots

Netflix and other services have tried various tactics to keep users engaged even when they inhale content like oxygen and keep asking for more. 

For Netflix and Hulu, a return to a more traditional means of spacing episodes seems to be increasingly common.

Netflix spends a lot of money producing content, and, in the beginning, they released all of these videos at once, and consumers then watched them all in a matter of hours or days. 

So instead of releasing them all at once, they’re now releasing new videos one at a time. So you can still binge watch to catch up, or binge watch older shows, but if Netflix is spending money on producing new content, they’re starting to deploy it much like more traditional channels. 

Things came full circle, and Over-the-top media services began using older techniques – techniques that once drove users away from traditional services.

This isn’t the only place where this return to tradition occurred.

It also occurred with streamed ads.

Likewise, one of the main draws of digital video (and digital media services in general) was the lack of advertisements. 

But monetizing video streamed over the internet was not particularly easy because it used up so much bandwidth. Further, online videos were often watched in fullscreen; this meant that users would likely miss any ads that weren’t in the video itself. And they certainly couldn’t be at the end!

The result was that, once again, over-the-top services began to recycle older techniques. They began placing unskippable ads before and during videos; even some paid subscription services have ads – just like cable! 


The return to video advertising as a primary means of monetization for over-the-top media services means that there is ample opportunity here for programmatic advertisers. 

While the placement of the ad within the content itself is relatively traditional (unskippable ads interrupting video), tracking and programmatic advertising technologies can still be used to determine which ads should be served to whom. 

Considering the massive amount of money that is still tied up in traditional television, a lot of it will likely transition to OTT media services as the content migrates to this means of distribution. 

In an industry that is projecting serious declines in growth in the near and mid-term, OTT could be the next major source of growth for programmatic advertising.

Roku sure seems to think so, which is why they just spent 150 million dollars to buy a DSP focused on exactly this market.


The television itself is here to stay. Having a giant screen in the living room hasn’t lost any appeal – and the numbers bear that out. 

The way that video and other forms of content get to the television, however, is changing. 

And these changes are very auspicious for the programmatic advertising industry. 

Whereas OTT media providers once tried to find other ways to monetize their traffic, many are now running back. And those that are waiting with tailored solutions stand to make a lot of money.

Mobinner is a high-performance Demand-Side Platform. Since 2017, we’ve been helping our clients build brands, drive conversion, and acquire users.

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