Virtual Reality Will Play an Important Role in OTT Video

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The global study, commissioned by Level 3 Communications (NYSE: 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, probing 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:

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 percent of companies surveyed are offering OTT services, which is a 10 percent increase over 2015, indicating significant adoption.
• Of the companies offering OTT services:
  • 52 percent are researching, getting ready to launch or have already launched VR-video content
  • 67 percent 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 percent 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 percent 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 percent 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 percent 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.
  • Forty percent of respondents have a multiple-CDN (content delivery network) approach for their OTT video services.

Key Quote:

Anthony Christie, Chief Marketing Officer, Level 3

"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."

Tim Siglin, Contributing Editor for Streaming Media Magazine and Principal Report Author

"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."

Key Resources:

• The Future of OTT (2016 Study)
• Over-The-Top Video delivery: Challenges and Opportunities for Global OTT Service Providers (2015 Study)
• About Level 3's Media and Entertainment Services

About Level 3 Communications

Level 3 Communications, Inc. (NYSE: LVLT) is a Fortune 500 company that provides local, national and global communications services to enterprise, government and carrier customers. Level 3's comprehensive portfolio of secure, managed solutions includes fiber and infrastructure solutions; IP-based voice and data communications; wide-area Ethernet services; video and content distribution; data center and cloud-based solutions. Level 3 serves customers in more than 500 markets in over 60 countries across a global services platform anchored by owned fiber networks on three continents and connected by extensive undersea facilities. Level 3 services are provided by subsidiaries of Level 3 Communications, Inc. For more information, visit www.level3.com or get to know us on Twitter, Facebook and LinkedIn.

© Level 3 Communications, LLC. All Rights Reserved. Level 3, Level 3 Communications, Level (3) and the Level 3 Logo are either registered service marks or service marks of Level 3 Communications, LLC and/or one of its Affiliates in the United States and elsewhere. Any other service names, product names, company names or logos included herein are the trademarks or service marks of their respective owners. Level 3 services are provided by subsidiaries of Level 3 Communications, Inc.

Forward-Looking Statement

Some statements made in this press release are forward-looking in nature and are based on management's current expectations or beliefs. These forward-looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside Level 3's control, which could cause actual events to differ materially from those expressed or implied by the statements. Important factors that could prevent Level 3 from achieving its stated goals include, but are not limited to, the company's ability to: increase revenue from its services to realize its targets for financial and operating performance; develop and maintain effective business support systems; manage system and network failures or disruptions; avert the breach of its network and computer system security measures; develop new services that meet customer demands and generate acceptable margins; manage the future expansion or adaptation of its network to remain competitive; defend intellectual property and proprietary rights; manage risks associated with continued uncertainty in the global economy; manage continued or accelerated decreases in market pricing for communications services; obtain capacity for its network from other providers and interconnect its network with other networks on favorable terms; successfully integrate future acquisitions; effectively manage political, legal, regulatory, foreign currency and other risks it is exposed to due to its substantial international operations; mitigate its exposure to contingent liabilities; and meet all of the terms and conditions of its debt obligations. Additional information concerning these and other important factors can be found within Level 3's filings with the Securities and Exchange Commission. Statements in this press release should be evaluated in light of these important factors. Level 3 is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.

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SOURCE Level 3 Communications