Level 3 Study Shows Virtual Reality Will Play Important Role in OTT Video

The Over-The-Top (OTT) market is moving in the direction of virtual reality (VR) according to “The OTT-Video Services Market — Today’s Trends and What is Next for 4K, HDR, HFR, and VR” study. The global study, commissioned by Level 3 Communications and conducted by Unisphere Research, in partnership with Streaming Media, interviewed 628 people from media and entertainment companies across the globe.

Respondents were asked to weigh in on the current state of OTT as well as some additional topics ranging from business, technology, and competitive challenges and the revenue viability of offering OTT services. The study built on research conducted in 2015, probing respondents on next generation content like virtual reality (VR), 4K, high dynamic range (HDR), and high frame rate (HFR) video.

Level 3Among the most compelling results is the opinion of respondents, “VR-video will become a mainstay of streaming video.” While VR is expected to become a mainstay, researchers also found potential barriers to adoption including lack of consumer access to players, delays in the availability of VR devices and bandwidth limitations for OTT VR content delivery.

Key Findings
Below is a sampling of the findings from the OTT study; a comprehensive overview of the data and analysis can be found in the full report.

  • 45% of companies surveyed are offering OTT services, which is a 10% increase over 2015, indicating significant adoption.
  • Of the companies offering OTT services:
    • 52% are researching, getting ready to launch or have already launched VR-video content
    • 67% believe VR is here to stay, however, acknowledged primary business and technical challenges including lack of consumer awareness, interest and fear of competition from free services, user generated content and bandwidth caps.
    • Close to 50% of respondents have plans for 4K broadcasts, 4K VOD streaming and/or 4K live-linear or live event streaming.
    • On the HDR and HFR front, almost 70% of respondents confirmed they offer or plan to offer both HFR in existing HD video, as well as offering HDR content for greater color depth.
    • 87% of respondents stated offering OTT services is a viable revenue opportunity.
    • About half of respondents [48%] expected their OTT revenue to grow between 11 to 50% from 2015 to 2016, and almost 20% of respondents anticipated growth to be more than 50% year over year.
    • Some impending OTT service offerings are expected to begin emphasizing live OTT content over on-demand content. If this occurs, it will signal the first time the OTT industry has highlighted live content instead of on-demand content and catch-up services.
    • 40% of respondents have a multiple-CDN (content delivery network) approach for their OTT video services.

“As the OTT industry continues to grow and evolve, this study shows there is more focus on not only delivering live streaming events – which can be a challenge in itself – but also streaming in 4K or even VR,” says Anthony Christie, Chief Marketing Officer, Level 3. “End users expect their video streaming experience to be seamless, even as they begin to consume next generation content, and this study reveals the ever-increasing importance for OTT providers to have a robust CDN strategy to enable this upward OTT trajectory as well as the importance of a safe, secure, reliable network.”