Instead of transmitting video over a video cable to a monitor or DVR, an internet camera transmits digital video over a data connection: ethernet, USB, WiFi, etc. Everything required to transfer images over the network is built into the unit. It is connected directly to the network, just like any other network device, like a printer or scanner. Depending on what type of camera it is, it may save video to an attached memory source, connect to another device on the network for storage, or stream captured video to the internet.
An internet camera captures images the same way any digital camera does. What makes it different is its ability to compress the files and transmit them over a network. If a building is equipped with a network, the necessary infrastructure is already in place to install network cameras. If adding one or a few cameras, a user may use a decentralized network camera, one that has its own control interface and storage medium built in. When installing multiple network cameras it can be wise to use a centralized network camera, which requires a network video recorder (NVR).
An NVR is a program that can store video from network cameras and allow for viewing of multiple cameras at once. It is similar to a DVR, but while a traditional DVR is responsible for encoding and processing video from component cameras, an NVR depends on the cameras to encode their video, simply storing it and allowing for centralized remote viewing. NVR software can be installed on a dedicated device with its own operating system or on an existing computer. There are hybrid systems available that can accept both IP and analog inputs. These will often allow analog cameras to be viewed remotely along with any network cameras.