The content needs to be encoded at least for two reasons:
- It is usually required by copyright holders from whom you are purchasing the rights for this content. You will also most probably have to use the encoding systems approved by these copyright holders (and not something of your own).
- You as an operator are interested in that because content without encoding can become available illegally, and not only to your subscribers in case of OTT. This task is partially solved by one-off links and other means of basic web content protection but, firstly, they provide much poorer protection than specialized CAS / DRMs; secondly, they do not solve the issue with copyright holders or the problem of stealing content (for example, downloading it and posting it online for free access or re-transmitting).