TV and digital video continue to collide and nothing represents that more than over-the-top (OTT). As an emerging medium, OTT has its share of challenges and opportunities - but one thing is clear, consumers are increasingly accessing video outside of traditional pay TV models. But how are they viewing OTT? And how are advertisers using it? Check out The OTT Reality Check slideshow to get a snapshot on the latest trends within space.

1. Over-The-Top’s popularity is rapidly increasing
with both consumers and advertisers.
Here’s everything you need to know.
THE OTT
REALITY
CHECK
Over the Top (OTT) is audio and video content that is distributed over the Internet without a traditional TV provider.

2. OTT IS NOW
MAINSTREAM
Consumers regularly watch video through
OTT, whether streaming video across
devices or accessing their Connected TVs.
42%of people prefer to
watch TV shows online
Source: AOL Mega-Audience II, Fall 2015

3. OTT VIEWING HAPPENING
ACROSS SCREENS + OFTEN
Devices used to watch OTT by OTT Users Access OTT once a week or more
65%
59%
41%
35%
13%
89%
88%
83%
85%
83%
Laptop
Smartphone
Tablet
Connected TV
Gaming Console
Source: AOL and Advertiser Perceptions Monthly Omnibus Study, February 2016

4. BUT PAY TV
ISN’T DEAD...
YET
11%have discontinued paid TV
service to watch TV over
internet exclusively
13%say they are likely to
discontinue paid TV
service to watch TV over
internet exclusively over
the next 6 months
Forrester, 2016
Source: Forrester, North American Consumer Technographics Online Benchmark Survey (Part 2), 2015

5. ADVERTISERS
ARE ADAPTING
as many advertisers are planning to spend
on OTT in 2016 from 2015. The amount
they spend also increases each year
Source: AOL "2015 State of the Video Industry,” October 2015
Digital advertising budget
allocated to OTT/Connected
TV
18%
17%
16%
201620152014

6. PROS + CONS
As an emerging medium, advertising on OTT comes with both benefits and challenges.
Here are key points we heard from advertisers.
TOP 5 BENEFITS
42%
41%
32%
31%
23%
Reaching incremental
audiences (i.e. cord cutters)
Extending the brand
story across screens
No ability to skip ads
Catching up to consumer
consumption trends /
gaining relevancy
Gaining more
consumer-level data
TOP 5 CHALLENGES
35%
30%
29%
28%
28%
Lack of measurement
Small scale
audience penetration
Lack of standardization
Price
Lack of targeting
capabilities
Source: AOL and Advertiser Perceptions Monthly Omnibus Study, October 2015

7. THE FUTURE IS CONVERGENCE
As the space evolves, advertisers see consolidation across channels on the horizon.
53%of advertisers agree that TV,
online video, and OTT
should be combined into
one overall video budget
Source: AOL and Advertiser Perceptions Monthly Omnibus Study, October 2015