Linear TV vs. OTT

We recently broke down the reasons why traditional linear TV is – contrary to what the Netflix CEO might tell you – not dead or dying. But what’s the actual difference between linear TV and streamed content (OTT)? Of course, one is presented in a scheduled fashion and the other is on demand. But the differences go deeper than that. Here’s what you need to know about linear TV vs. OTT.

a traditional TV with an antenna and remote control

What is linear TV?

Linear TV – also referred to as broadcast or traditional TV – is the original way of consuming TV content. Programming is run in a linear, scheduled fashion, at a particular time on a particular channel. It can be recorded for later viewing via DVR or a similar device but is most often viewed live.

Benefits of linear TV

As we’ve discussed previously, one of the benefits of linear TV is that it creates shared experiences. The excitement of watching a sports game, whether it’s something as small as a local football game or as massive as the Olympics, is all about watching it live. People may want to binge TV shows on their own schedule, but they usually want to watch sports and live events as they’re happening. Watching it back later just doesn’t give you the same experience.

And then, of course, there’s trust and prestige. Linear TV has both in spades. Being a dominant medium for so long has given linear TV an air of gravitas that OTT simply can’t match at the moment. Having your brand appear on TV gives you a huge boost in credibility.

a TV with a wifi-connected device on top

What is OTT?

OTT stands for “Over the Top” and refers to video content that is streamed on demand as opposed to being on a set schedule. This content is played by way of a smart TV or an external device such as a Roku.

Benefits of OTT

The benefits of OTT advertising are similar to those of other digital advertising channels. OTT comes with all the targeting and tracking capabilities of digital advertising, giving advertisers the ability to create custom audiences. Two people could stream the same show and see entirely different ads, based on their demographics and interests. And, of course, once you find your audience, you can retarget them to entice them back.

On top of those benefits, there’s also the simple fact that OTT is growing – and fast! In 2020, 80% of all U.S. households owned a connected TV – a massive increase in just five years, when that number was only 54%.

What’s the difference between CTV and OTT?

When searching for information on this type of advertising, you may find the terms CTV and OTT used interchangeably. So, what’s the difference? Why are there two different terms, anyway? Let’s break it down. CTV, or Connected TV, means a TV that connects to the internet, whether via built-in smart capabilities or a separate internet device such as a Roku. Other examples of CTV are Amazon Fire or a PlayStation.

OTT, on the other hand, means any video content that is streamed on a device other than traditional broadcast, cable, or satellite TV. It’s not the device, but rather the content. Examples of OTT are Netflix, Hulu, and Disney+. You can use a CTV device to watch OTT content, but you could also watch that content on your laptop or smartphone. Getting these terms mixed up isn’t the end of the world – most people will know what you mean. But now you’ll know the difference when you spot them in the wild!

Now that we’ve gone over the basics and some of the benefits of linear TV and OTT, let’s dive into some of the key differences between the two:

Linear TV vs. OTT: Demographics

Like with most other digital and/or streaming content, there’s a marked difference between age groups when it comes to preferred platforms. Older generations show a preference for the familiarity of linear TV. Many Gen Z-ers, on the other hand, rely solely on OTT and CTV devices for their video content.

This may be common sense, but it’s backed up by the numbers, too. 60% of the minutes spent watching linear TV are watched by adults age 50+, and they watch over 5 hours per day. By contrast, members of the 34-55 age group account for approximately a quarter of linear TV-watching minutes. The numbers drop off even more sharply when it comes to Gen Z.

If the product or service you’re advertising has a heavy generational bias one way or the other, you’ll definitely want to consider that if you must decide between advertising on OTT or linear TV.

a target with an arrow sticking out of the bullseye

Linear TV vs. OTT: Targeting

One of the strongest benefits of OTT is the ability to precisely target your audience. The power of digital allows you to market your product to a more tightly defined audience and retarget them to entice them back. Another benefit of OTT is the ability to track your campaign with real-time analytics and reporting. OTT offers the opportunity to more specifically target certain demographics. (It’s worth keeping in mind, though, that even OTT has some targeting challenges ahead. You can read our article about the depreciation of third-party cookies in our article here.)

We don’t want to make it sound like linear TV is completely powerless to target, of course – that’s far from true! Linear TV has mountains of information that can help advertisers target their audience effectively. Strategists use demographics and other data to create segments and dayparts. What linear TV lacks is the precise, real-time data that comes with digital.

Linear TV vs. OTT: Reach

As of 2020, over three quarters of Americans subscribe to at least one streaming service. That’s already an impressive number! But by contrast, the percentage of Americans with access to linear TV – whether through broadcast antenna, cable, or another media – sits at a whopping 96.2%. Clearly, neither OTT nor streaming have any issues with reach!

With the rise of CTV devices and streaming, the reach of OTT is expected to keep growing. Linear TV has likely already maxed out its reach. However, when that number is over 95%, the slowing of growth is nothing to worry about.

Linear TV has the edge in numbers here, but both linear and OTT are an excellent choice if you’re looking to reach a wide audience.

Linear TV vs. OTT: The bottom line

While OTT may be the new shiny toy of the advertising world, there’s no need to write off traditional linear TV as you put together your advertising plan. Both OTT and linear TV have their strengths! Linear TV is great for live events, sports, and older audiences, and has developed an air of gravitas due to its long history. OTT is perfect for reaching younger audiences and is only poised to grow further as more people add to their collection of streaming services.

Interested in adding linear TV or OTT to your media mix?

Contact MPP today!