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Virtual Reality will play an important role in OTT video

MUMBAI: 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 (LVLT) 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, probes respondents on next generation content like virtual reality (VR), 4K, high dynamic range (HDR) and high frame rate (HFR) video.

Among 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:

  • 45 per cent of companies surveyed are offering OTT services, which is a 10 per cent increase over 2015, indicating significant adoption.
  • Of the companies offering OTT services:
    • 52 per cent are researching, getting ready to launch or have already launched VR-video content
    • 67 per cent believe VR is here to stay. However, they acknowledge 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 per cent 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 per cent of respondents confirmed they offer or plan to offer both HFR in existing HD video, as well as offering HDR content for greater colour depth.
    • 87 per cent of respondents stated offering OTT services is a viable revenue opportunity.
    • About half of respondents [48 per cent] expected their OTT revenue to grow between 11 to 50 per cent from 2015 to 2016, and almost 20 per cent of respondents anticipated growth to be more than 50 per cent 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 per cent of respondents have a multiple-CDN (content delivery network) approach for their OTT video services.
  • 52 per cent are researching, getting ready to launch or have already launched VR-video content
  • 67 per cent 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 per cent 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 per cent of respondents confirmed they offer or plan to offer both HFR in existing HD video, as well as offering HDR content for greater colour depth.
  • 87 per cent of respondents stated offering OTT services is a viable revenue opportunity.
  • About half of respondents [48 percent] expected their OTT revenue to grow between 11 to 50 per cent from 2015 to 2016, and almost 20 percent of respondents anticipated growth to be more than 50 percent 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 per cent of respondents have a multiple-CDN (content delivery network) approach for their OTT video services.

Level 3 CMO Anthony Christie said, “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. 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.”

Contributing editor for Streaming Media Magazine and principal report author Tim Siglin said,”When I started the process of crafting questions for this second annual survey on OTT for Level 3, I was a VR-video skeptic. But it became clear, during the analysis phase, that a VR-video strategic decision has tremendous mindshare for those companies already offering OTT services.”