IPTV is a traditional way of delivering content over a managed, fully-provisioned network. Though the protocol utilized in streaming the video content is Internet Protocol (hence “IP” in IPTV), this is not the public Internet. It is a private network, not accessible externally. The video streams are delivered within that private network, and accessible only from devices (set-top-boxes) issued by the operator. Examples of IPTV services are Verizon FiOS or AT&T Uverse.
In comparison, OTT (over-the-top) video services use the publicly accessible Internet to deliver video streams. Such content is not just available via set-top-boxes, but also via any devices that can access the Internet – such as phones, tablets and smart TVs with a broadband connection. Popular OTT services include Netflix and Hulu. Examples of OTT services launched by service providers are Dish Anywhere by Dish Network, and Now TV by BSkyB.
Since IPTV runs on a private, fully-controlled network, operators can enable technologies like multicast for network resource efficiency. However, most playback devices (like phones, tablets, and PCs) would not support such proprietary technologies. It may seem that IPTV has the advantage of tight control and guaranteed (over-provisioned) bandwidth, but it also has the disadvantage of its inability to serve viewers who wish to play content wherever and whenever they want. As a result, OTT-delivered videos are becoming more and more popular. Operators that have deployed IPTV are increasingly adding OTT capabilities. Emerging operators are even bypassing IPTV and just implementing OTT.