The OTT-video services market today's trends and what is next for 4K, HDR, HFR & VR

THE OTT-VIDEO
SERVICES MARKET
TODAY’S TRENDS AND WHAT IS
NEXT FOR 4K, HDR, HFR & VR
By Tim Siglin,
Contributing Editor, Streaming Media magazine,
and Co-founder & Principal Analyst, Transitions, Inc.
Produced by Streaming Media magazine
and Unisphere Research,
a Division of Information Today, Inc.
May 2016
Sponsored by

2
THE OTT-VIDEO SERVICES MARKET—Today’s Trends and What is Next for 4K, HDR, HFR & VR was produced by Unisphere Research and Streaming Media magazine, sponsored
by Level 3 Communications, and crafted by Transitions, Inc. Unisphere Research is the market research unit of Unisphere Media, a division of Information Today, Inc. To review abstracts
of our past reports, visit www.unisphereresearch.com. Unisphere Media, 121 Chanlon Road, New Providence, NJ 07974; 908-795-3702.
TABLE OF CONTENTS
INTRODUCTION ��3
IS OTT A VIABLE REVENUE OPPORTUNITY?��5
WHY OFFER OTT SERVICES?��7
WHAT CHALLENGES DO OTT PROVIDERS FACE?��8
MONETIZING, SCALING, AND SECURING CONTENT��9
WHAT DOES THE FUTURE HOLD, I WONDER��11
SUMMARY��14
ABOUT LEVEL 3��14

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THE OTT-VIDEO SERVICES MARKET—Today’s Trends and What is Next for 4K, HDR, HFR VR was produced by Unisphere Research and Streaming Media magazine, sponsored
INTRODUCTION
“CDN services are hot,”a CDN vendor recently told me,“but OTT Video Services are even hotter.”
How hot is the OTT Video Services market? Hulu recently
announced an annualized growth rate of more than 30%
year-over-year, and is now nearing 12 million paid subscribers;
Netflix has in excess of 75 million subscribers, and is available
in almost 200 countries worldwide; and Amazon has almost
50 million Prime members, all of which have access to original
and licensed video on-demand (VOD) OTT content as part of
their memberships.
Even beyond this Big 3 of OTT, though, there are hundreds of
OTT providers, catering to various niches. Whether building a
base of OTT subscribers around user-generated content (UGC),
linear channel OTT as part of the “TV Everywhere” initiatives,
or even live event OTT pay-per-view or event models, OTT
providers serve the needs of viewers across the content spectrum.
To properly assess the potential of OTT, one needs to understand
that OTT comes in a variety of device types and services.
In the past, due to both device and delivery limitations, most
OTT was a way to deliver on-demand content—those file-based
assets that cover everything from cat videos to premium movie
and television episodes.
OTT customers watched on-demand content and catch-up
services on their laptops, which gave way to streaming set-top
boxes (STBs) and internet streaming “sticks,” which in turn gave
way to higher numbers of consumption minutes for smartphones
and tablets.
In addition, content in 4K (UltraHD, or the newer high-
dynamic-range UltraHD Premium) is becoming mainstream, as
is high-frame-rate 1080p content. Even emerging content formats
such as VR-video show promise, as borne out in responses to
this year’s survey, sponsored by Level 3 Communications and
Streaming Media magazine.
During the course of survey response analysis for last year’s
OTT report—“Over-The-Top Video Delivery: Challenges And
Opportunities For Global OTT Service Providers,” sponsored by
Level 3—we noticed a number of emerging trends that seemed to
indicate interest in both new services that can’t be delivered by a
traditional over-the-air broadcast infrastructure as well as a desire
in the OTT community to increase quality.
Building on that insight, we expanded this year’s Level
3-sponsored survey to explore several of these emerging trends,
testing which of them appear to have longevity and which appear
to be flash but no fire.
We asked respondents to examine OTT from a variety of angles,
ranging from business and technology challenges to the competitive
challenges and revenue viability of offering OTT services.
Along the way, survey takers—both the key number of
respondents working in OTT today, as well as the larger group
who are exploring OTT opportunities—provided insights into
trends and opportunities.
After eliminating a number of partial answers, Transitions
analyzed 628 survey responses. We were able to then further sort
the responses into two groups: those who currently offer OTT
services, and those who do not.
Almost 45% of respondents, or 280 of our 628 survey
takers, indicated their companies offer OTT services today. It’s
interesting to note that only 35% of last year’s survey respondents
offered OTT services, which potentially indicates a growing
adoption trend since Streaming Media surveys attract a high
number of respondents from within the streaming media and
OTT industry.
The 45% response rate for those offering OTT services gave us
a solid footing on which to explore the differences between those
thinking of adding OTT services and those that already have done so.
In keeping with last year’s survey respondents, in which 13%
of respondents said their companies were part of a larger media
group, this year’s numbers are slightly higher, with 15% of
respondents working for a company that’s part of a larger media
group and not part of an independent media firm, enterprise,
or educational institution.

4
More interestingly, though, for those respondents whose
companies currently offer OTT services, less than a quarter say
their organizations are part of a larger media group. This is
essentially the same pattern as last year, even though the majority
of respondents to this year’s survey were different from last year’s
respondents.
One final area of differentiation between the 628 respondents
is worth noting. While about one-third of respondents say they
have no plans to implement OTT services, those respondents
most often work for organizations and institutions—such as
government, higher education, or not-for profit groups—that
would be more likely to consume OTT content and services than
to create them.
The remaining two-thirds of our 628 respondents have
OTT plans, currently offer OTT services alongside a previous
distribution method, or are themselves a pure-play OTT business.
The following chart breaks down the percentages [Chart 01]
Finally, in terms of demographics and company types, slightly
more than three quarters of respondents to this study are from
North America, with 14% from Europe and the remaining
respondents from other parts of the world. Company types
lean heavily toward technology partners, non-sports content
providers, and startups. [Chart 02]
Chart 02: What is your company type?
22.3%
4.1%
5.0%
30.9%
25.2%
6.50
6.1%
Pay-TV Operator
Reseller/Systems Integrator
Technology Partner/Vendor
Content Provider (non-sports)
Content Provider (sports)
Pure play OTT operator
Start-up
Chart 01: Identify the current status of your
company’s migration to, or adoption of,
over-the-top (OTT) services.
Stage 3—Pure
Play (100%)
OTT Business
Stage 2—OTT Delivery
Along with Previous
Distribution Method
Stage 1 —
OTT Plans Only
Stage 0 —
No OTT Plans
31.2%
12.4%
32.8%
32.8%
22.3%
4.1%
5.0%
30.9%
25.2%
6.50
6.1%

5
IS OTT A VIABLE REVENUE OPPORTUNITY?
Given all the coverage of the OTT revolution, one would
immediately expect a majority of survey respondents to confirm
the question of revenue opportunity. That was indeed true for this
year’s OTT survey, with more than 70% of respondents stating that
offering OTT services is a viable revenue opportunity today
[Chart 03].
We wanted to know more detail, though, about various types of
OTT services, so we asked a series of additional questions around
linear channel distribution via OTT as well as live OTT services.
Both the overall respondents and those that currently offer
OTT services see linear channel distribution as a viable revenue
opportunity, although not as big an opportunity as they view live
OTT service offerings and event-based live delivery, including
awards, concerts, and sporting events [Chart 04 05].
What’s most interesting about these two OTT offerings is that
live OTT services are considered more likely to provide revenue
opportunities than linear channels, both by overall respondents
and those who currently offer OTT services.
This is in line with an additional set of questions we asked
around the types of OTT services offered today versus those that
might be offered over the next 2 years.
The following charts highlight a shift in growth toward live OTT
service offerings (32% today versus 36% over the next 2 years)
[Chart 06 07].
Chart 03: Do you see offering OTT services as an
viable revenue opportunity today?
Chart 05: In your
opinion, is live
OTT (e.g., awards,
concerts, sporting
events) a viable
revenue opportunity?
Chart 06: What OTT video content types do you
currently offer?
Chart 04: In your
opinion, is streaming
OTT for linear channel
distribution a viable
revenue opportunity
today?
Chart 07: What OTT video content types will you
offer in the next 2 years?
28.6%
No
71.4%
Yes
25.5%
No
74.5%
Yes
28.6%
No
16.2%
No
83.8%
Yes
28.6%
No
Live (event)
VOD
Linear (e.g.,
traditional
channel on OTT)
12.4%
26.8%
32.3%
40.9%
Live (event)
VOD
Linear (e.g.,
traditional
channel on OTT)
12.4%
26.2%
36.0%
37.8%

6
What is uncertain is whether budgets will remain flat or grow,
which, in turn, means there’s not much clarity as to whether
live OTT offerings will grow at the expense of linear channel
distribution and VOD offerings. Based on our analysis and the
fact that respondents could choose multiple answers on these two
questions, what is clear is that live OTT delivery will increase at a
faster rate than the other two types.
Later in the survey, we asked a series of three questions about
the importance of various types of OTT content to the business
plans. On-demand content (VOD) topped the list, being rated
as very important to 62% of respondents currently offering
OTT services [Chart 08].
Linear channel OTT content was rated as very important to
their OTT business plans by only 39% of respondents, lagging
considerably behind per-event and VOD content in importance
[Chart 09].
This relative lack of emphasis on linear channels in OTT
business plans may be due to one of two factors. First, while
there are only a select number of linear channels available to
OTT services—making rights negotiations and exclusivity
a difficult barrier to entry—there is also growing interest in
simulated linear channels, based on scheduled playout of OTT
file-based assets rather than just live streaming a cable or over-
the-air broadcast for OTT distribution.
On the other hand, linear channel OTT may simply be of
lessening importance as live event OTT content begins to take
center stage in OTT service business plans.
Live OTT content, such as award shows, concerts, and sporting
events ranked almost as high in importance as VOD content
[Chart 10].
Live OTT was rated as very important to OTT business plans
by 61% of respondents who say they currently offer OTT services.
Even more interesting, though, is that live OTT even ranked
above VOD in importance for OTT business plans for overall
respondents. Our analysis indicates, then, that some impending
OTT service offerings will begin to emphasize live OTT content
over on-demand content. If this occurs, it will signal the first time
the OTT industry has emphasized live content instead of on-
demand content and catch-up services.
One could argue this is the case because the likes of Amazon
and Netflix have won the VOD premium content segment of the
OTT industry, but one could just as easily argue that it’s now
easier to offer live OTT in the form of event distribution, which
allows for a higher uptake and greater amount of revenue in a
shorter time period than has traditionally been the case for VOD-
centric OTT services.
Chart 08: How important is VOD content (e.g.,
syndication) to your OTT business plan?
Chart 10: How important is live event content
(e.g., sporting events, awards shows) to your
OTT business plan?
Very Important
Somewhat Important
Neutral
Not Important
2.5%5.8%
30%
61.7%
Very Important
Somewhat Important
Neutral
Not Important
3.9%
11.6%
23.2%
61.4%
61.7%
Very Important
Somewhat Important
Neutral
Not Important
15.6%
17.0%
28.9%
38.5%
61.7%
Chart 09: How important is traditional linear
channel content (e.g., broadcast TV channels,
local “must carry” stations) to your OTT
business plan?

7
WHY OFFER OTT SERVICES?
Another set of questions centered on the business reasoning
around offering OTT services, as well as expected revenue from
OTT services.
Far and away, the leading response to a question regarding
the compelling reasons to offer OTT services was an interest
in attracting new subscribers or customers. This was followed
by a desire to use OTT to distribute new content, and as
a way to enhance the company’s competitive profile or
increase profitability [Chart 11].
In terms of revenue growth, almost 90% of respondents that
currently offer OTT services are optimistic about the revenue
opportunities in the coming year, and some are quite optimistic
[Chart 12].
More than half of respondents say they expect 2015-2016
year-over-year revenue growth to increase by up to 25% with
more than a quarter saying they expect the revenue growth to be
between 11% and 25% year-over-year.
About half of respondents say they expect to see revenue
growth to be even higher, with 30% seeing revenue growth above
26% year-over-year, and a sizable 17% of respondents expecting
to see more than 50% revenue growth.
To say the OTT market, and market growth, are hot would
be an understatement. As one recent Streaming Media East
presenter said, the move from broadcast TV to internet TV is
an unstoppable force.
We also asked a question about the overall percentage
of business each respondent’s company would derive from
OTT-related services within the next 3 years. Almost two-thirds
of respondents see OTT-related services accounting for more
than a quarter of their overall business, and 40% of respondents
expect it to account for more than half of their overall business
[Chart 13].
Chart 11: What primary drivers compelled you to
offer these services?
Chart 12: What is your company’s overall projected
revenue growth for OTT from 2015-2016?
Retain existing subscribers/
customers
Attract new subscribers/
customers
Combat OTT upstarts
(challengers)
Monetize existing content
Loss leader for new market
growth
Enhance competitive profile/
increase profitability
Distribution of new content
20.2%
17.8%
2.8% 14.7% 5.6%
23.4%
15.6%
6.1%
Chart 13: What percent of your business will be
related to OTT within 3 years?
None
1%-10%
11%-25%
26%-50%
More than 50%
Other
.7%
17.0%
13.0%
30.1%
26.1%
13.0%
6.1%Projected Revenue Growth
None
1%-10%
11%-25%
26%-50%
More than 50%
39.5%
23.2%
18.0%
17.6%
1.7% 6.Percentage of the Business

8
WHAT CHALLENGES DO OTT PROVIDERS FACE?
For all the rosy pictures around revenue growth, however,
the OTT provider still faces several primary business and
technical challenges.
The biggest challenge is a lack of consumer awareness or
interest. In other words, stasis and the status quo have a large
bearing on the business potential for those either thinking of
getting into the OTT game or those already in it.
Once we move beyond that initial education or status quo
barrier, though, the additional reasons diverge between the two
groups of respondents [Chart 14].
For overall respondents, the fear of competition from free
services and user-generated content (UGC) is the next-most-
significant commercial challenge, while those offering OTT
services see rights acquisition as a key commercial challenge
to overcome.
Bandwidth caps are a financial challenge for the two groups,
and both agree that a lack of single-vendor solutions is less of a
barrier than it was a year ago. But overall respondents are much
more likely to see a challenge in the need to offer a seamless
authentication experience than are those who currently offer
OTT services.
On the technical front, bandwidth limitation challenges have
given way to concerns around quality of service and quality
of experience being in the forefront of OTT service operators’
minds. This is the first time we’ve seen those who currently offer
OTT services more concerned, albeit just slightly, about quality
challenges rather than bandwidth challenges [Chart 15].
To measure both quality and bandwidth issues, respondents
say they use a few technical metrics, such as buffering, latency,
and jitter. But far and away, the number-one performance-driven
metric used to drive OTT service business decisions continues to
be engagement [Chart 16].
Abandonment rate
Time-weighted bitrate
Engagement
Buffering
Latency/jitter
19.0%
23.4%
28.6%
10.4%
18.6%
6.1%
Chart 14: What are the most significant commercial
challenges for your business in offering OTT
services?
Chart 15: What are the most significant technical
challenges for your business in offering OTT
services today?
Chart 16: What performance-based metrics drive
your OTT business decisions?
Lack of consumer
awareness/interest
Competition from free services
– user generated content
Competition from free services
– direct broadcasters access
Offering a seamless authentica-
tion experience
Securing the content rights for
multiple screens
Bandwidth caps – financial
Lack of single-vendor solutions
9.6%
14.9%
15.9%
12.9%
15.1%
15.3%
16.4%
6.1%
9.6%
14.9%
15.9%
12.9%
15.1%
15.3%
16.4%
6.1%
Content security
Bandwidth limitations
Scalability (global reach)
Search/discovery functionality
Broad device support
Player/UI functionality
Quality of service/Quality of
experience
19.5%
14.1%
13.2%
12.5%
11.8%
17.8%
11.1%
6.1%
19.5%
14.1%
13.2%
12.5%
11.8%
17.8%
11.1%
6.1%

9
MONETIZING, SCALING, AND SECURING CONTENT
For those currently offering OTT services, we asked
which of several approaches they took to monetize content:
advertising, subscription, or pay-per-view/event-based payments.
Respondents were allowed to choose multiple approaches
[Chart 17].
Subscriptions edge out advertising, but both are in an
unsurprising neck-and-neck race. Even looking forward over the
next 12 months, this photo-finish race between advertising and
subscriptions doesn’t look much different.
There’s also an industry trend of online companies
expanding into premium video content—leading to an
increased demand for CDN services—and even social media
companies are expanding their video catalogs to increase
page views and platform loyalty. From Facebook to Twitter
to Yahoo!, the video wave continues unbroken.
The dark horse in the race, though, is pay-per-view/event-
based payments. In terms of percentage against advertising
or subscription approaches, as well as the actual number of
respondents saying they would use per-event pricing, this
payment approach appears to be gaining traction over the
next 12 months.
Our 12-month analysis shows that subscriptions will
rise slightly, advertising will rise a bit more, and per-event
payment approaches will rise fastest of all, in keeping with how
respondents responded to the earlier question about live OTT
being a key revenue opportunity.
On the scaling front, we asked two questions about geographies
and content delivery networks (CDNs).
The first question asked about the scope of geographies
covered by those currently providing OTT services. Forty-two
percent of respondents say their company offered OTT services
globally, with an extra 26% saying they offered OTT services
across multiple geographic regions [Chart 18].
Pay-per-view/
event
26.7%
Subscription
37.3%
Advertising
36.0%
2.4%
Globally
42.1%
Multiple
geographic
regions
26.4%
Single
geographic
region/home
country
31.4%
12.4%
Chart 17: Which of the following are part of your
current OTT monetization strategy?
Chart 18: In how many regions does your company
offer OTT services?

10
We asked the same respondents to tell us whether they had a
multi-CDN strategy, or instead either used a single CDN or an
internally operated corporate CDN [Chart 19].
Approximately 40% of respondents have a multiple-CDN
approach and a quarter of respondents say their company has
an internal CDN. The internal CDN approach has seen a bit of
traction in the enterprise market (e-CDN), but gained limited
traction in the OTT, social media, and closed ecosystem markets.
If more companies opt to bring their content delivery in-
house—even if they simultaneously rely on external CDNs to
handle peak traffic times, such as premium video content release
dates or global software updates—this presents a challenge for
pure-play CDN companies which lack the ability to sell basic
services such as IP transport.
Finally, on the security front, companies use a variety of
methods to lock the content itself, the stream, or even the
transport layer. Security is as much a rights negotiation issue as it
is a content management issue [Chart 20].
Digital rights management (DRM) for file-based assets tops
the list, in keeping with the fact that VOD content is the most
important content for a majority of OTT service providers. DRM
is followed closely by token authentication, a growing security
approach for both VOD content and live streams. Geoblocking
and geofencing continue to receive high marks, followed by IP
access control and stream encryption.
Pay-per-view/
event
28.2%
Subscription
36.1%
Advertising
35.7%
12.4%
Chart 19: How do you plan to monetize linear OTT
services in the next 12 months?
Chart 20: What is your company’s current overall
OTT security strategy across all networks/
devices?
Geoblocking/fencing
Token authentication
IP access control
File based rights management (DRM)
Transport layer encryption
Stream encryption (AES-128)
No security strategy
6.7%
14.4%
8.3%
18.3%
16.7%
17.9%
17.7%
6.1%
6.7%
14.4%
8.3%
18.3%
16.7%
17.9%
17.7%
6.1%

11
WHAT DOES THE FUTURE HOLD, I WONDER…
OTT providers are in an enviable position of being able to
rapidly deploy and test new video technologies and formats,
especially compared to their cable and satellite counterparts.
This capability can provide for differentiation, viral publicity,
credibility, and also help attract new subscribers.
To further explore these possible differentiators for OTT
service providers, we asked a series of questions about the use of
various buzzword technologies: high-frame-rate content (HFR)
high-dynamic-range content (HDR), 4K (UHD), and virtual
reality (VR) video content.
On the 1080P HDR and HFR front, respondents solidly
confirmed the idea that they offer or plan to offer both higher frame
rates and greater dynamic ranges, potentially with 10-bit video
[Chart 21].
Almost half say they offer or plan to offer both HDR and HFR
options, with an additional 20% focusing exclusively on high-
frame-rate delivery (such as 1080p60), which is often used to
smooth out sports content.
There was similar interest in 4K, with only about one-third
of respondents saying they were uncertain about 4K or had no
4K plans. The remaining two-thirds chose across three areas: 4K
broadcast and 4K streaming, both VOD and live event streams
[Chart 22].
VOD streaming of 4K content was the clear winner. Even
though respondents were able to choose multiple 4K options, the
4K streaming option outpaced every one of the other choices by a
wide margin.
Finally, there was the question of virtual reality content. This
set of responses required a bit of analysis to gain a clear picture.
We started with asking respondents about their opinion on the
potential industry adoption of VR-video delivery. The dominant
sentiment was positive overall, with two-thirds holding the view
that VR-video will be a viable opportunity. Approximately 45%
of respondents chose the option that “just like 1080p, it’s here
to stay, but won’t dominate” the streaming video industry, while
only a third declared it a non-starter like 3D TV [Chart 23].
No HDR
or HFR plans
31.2%
Both HDR and HFR
43.0%
HDR (e.g.,
10-bitcolor)
5.5%
HFR (e.g.,
1080p60)
20.3%
12.4%
No 4K plans
18.0%
Uncertain 15.6%
4K streaming
(live-linear
or live event)
21.4%
4K streaming
(VOD)
27.2%
4K broadcast
17.7%
12.4%
It’s the
future of
all video
7.9%
Just like HD,
it will become a
market leader
14.0%
Just like 1080p,
it’s here to stay,
but won’t dominate
45.5%
A non-starter
like 3D TV
(early adopters only and
the “3DTV who?”)
32.6%
12.4%
HDR (e.g.,
10-bitcolor)
only 5.5%
Chart 21: What are your current or future OTT plans
for 1080P high-frame rate (HFR) and high-dynamic
range (HDR) content?
Chart 22: What are your current or future OTT
plans for 4K?
Chart 23: What is your educated opinion on
industry adoption of virtual reality video
(VR-video) delivery?

12
When we look into the numbers in more detail, using the filter
of companies that already offer OTT services, a somewhat different
trend emerges. Slightly more respondents (33% versus 30%) feel
that VR-video is a non-starter, but that’s not the whole picture.
Taking into account the additional information offered in
response to the follow-on question, a different picture emerges.
Respondents were asked whether their companies plan to develop,
create, and distribute VR-video content [Chart 24].
While just under half of respondents say they have not
considered VR-video plans, more than half of the respondents
are either actively researching VR-video, planning to soon
launch a VR-video service, or state they have already launched
VR-video services.
When the question about respondents’ industry opinions is
broken down along the question about current plans to develop,
create, and distribute VR-video content, the opinions shifted
markedly in favor of VR-video adoption [Chart 25].
More than half of those who haven’t even thought about
planning VR-video workflows predict that VR-video will be a
non-starter, but for those who are actively researching the idea of
a VR-video service, the opinion shifts to indicate that VR-video
will become a mainstay of streaming video.
For those planning to launch soon, or have already launched
a VR-video service, the sentiment shifts even more, with the
majority of respondents indicating VR-video will be either a
market leader or will become the future of all streaming video.
Chart 25: Opinion of VR’s industry adoption versus organization’s plan to
develop/create/distribute VR-video content
0 20 40 60 80 100
Launched
Will launch within the next 9 months
Actively researching
Haven’t even thought about it
Non-starter Like 1080p, won’t dominate Like HD, will be market leader It’s future of video
Chart 24: Does your organization plan to develop/
create/distribute VR-video content?
Launched
5.5%Will launch
within the
next 9 months
7.2%
Actively
researching
39.7%
Haven’t even
thought about it
47.7%
.4%
.g.,
olor)
5%

13
The final question on VR video is one that reflects similar
business and technical challenges for other types of streaming
content, but with a slight twist [Chart 26].
A lack of consumer access to players or devices tops the list,
probably exacerbated by the delays in shipment of products
such as the Oculus Rift and other VR goggles. Closely behind
it, though, is an even bigger problem: a lack of content for VR
devices. This chicken-or-egg scenario dominates concerns, and
two additional barriers—bandwidth limitations and the lack of
VR-video services—lag much further behind in terms of barriers.
Few respondents feel that it would be onerous to distribute
content, which means the other barriers, once overcome, should
lead to decent opportunities for VR-video consumption.
Chart 26: What are the biggest barriers of entry
for a robust VR-video market?
No VR
video service
16.2%
Lack of content
27.3%
Onerous
to distribute
content
12.6%
Lack of
consumer access
to players
or devices
27.5%
Last mile
ISP bandwidth
limitations
16.4%12.4%
HDR (e.g.,
10-bitcolor)
only 5.5%

14
SUMMARY
Responses to this year’s survey emphasized two seemingly
disparate facts, if each is taken in isolation.
For those offering OTT services today, the trend toward
offering 1080p content is fast becoming table stakes. Even
beyond 1080p24 or 1080p30, though, there’s a move afoot by
online video providers to offer 1080p with HDR and HFR as
a counterbalance to the longer-term trend of moving to 4K
delivery. In keeping with this, the growth in OTT subscribers
viewing 1080p content (instead of the industry standard 720p
content) continues to accelerate.
On the other hand, interest in 4K (UHD) and VR-video is also
gaining ground, with each seeing more rapid acceptance in the
OTT space than they are in traditional broadcast delivery. Both
are in their infancy, but have already attracted interest from major
content providers.
Taken together, these two facts mean that OTT service
providers, while just reaching the point where they are
consistently delivering 1080p content, must now pivot and begin
to invest in 4K and VR video delivery.
On top of that, live OTT is also gaining ground, with
event- and venue-based live streaming moving to center stage
from both a business planning and revenue opportunity for
OTT service providers.
When it comes to the bottom line of the move from traditional
television to internet television, one fact is clear: Not only are
OTT providers able to rapidly implement next-generation video
formats and content, in stark contrast to the slow uptake of
new technologies from their cable and direct-to-home (DTH)
ancestors, but OTT providers are actually leveraging this adoption
of new technologies as a new way to monetize content.
As they seek to differentiate and grow their subscriber base,
it is critical that OTT providers realize they aren’t just battling
status-quo methods of media delivery, but are also competing
with each other, both in the present transformative and exciting
state of video consumption, as well as in the near future.
The agility of OTT providers to simultaneously look backward
to gather best practices while also looking toward the future of an
OTT-only delivery landscape is what will enable their accelerated
market growth.
ABOUT LEVEL 3
This report’s key sponsor, Level 3, has more than a quarter-century’s experience in live content
acquisition, including connectivity to over 155 professional and college sports venues, broadcast video
distribution, and encoding for linear streaming channels combined with a global content delivery
network covering major metro markets across six continents. For those hesitant to move into the OTT
video space due to security concerns, Level 3 also offers integrated security products.

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