Some say that OTT is the “most over-hyped and over-anticipated phenomenon in tech history,” others would have you believe the end is nigh for traditional pay television as we know it.

The truth?  As usual, it’s somewhere in between.

A report we’ve just published, “Over-The-Top vs. TV Everywhere: How Disruptive is OTT to the Pay TV Business?” concludes that while the reaction to OTT has been perhaps overhyped, online distribution does pose a potential threat to the traditional pay television model.

The numbers to-date, however, don’t necessarily portend an imminent  collapse of pay television as we know it. . In fact, US pay TV service providers added nearly 2 million additional subscribers in the first quarter of 2010, despite an increasing threat services such as Netflix, Hulu, and YouTube.

That’s not to OTT should be ignored, however.  Survey research we published in early 2010 showed that US consumers perceive a relatively low “value for money” for pay television services.  

OTT services can potentially capitalize on pay TV’s biggest shortcomings, namely a lack of flexibility in selecting channel packages, and a low perceived value for money.