CenturyLink starts OTT video trial in four markets, focuses on millennials

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CenturyLink (NYSE: CTL) may not be slowing down the rollout of its Prism TV service, but the telco is anxious to get video services to more users so it's going to start an over the top video trial focusing on the millennial generation.

Speaking to investors during the 2016 Morgan Stanley Technology, Media And Telecom Conference, Aamir Hussain, CTO of CenturyLink, said that the service provider will trial the OTT service outside of its Prism footprint in four markets.

However, CenturyLink did not reveal in which markets the telco will trial the OTT service.

"The product we're building, which is pretty close to AT&T's (NYSE: T) new video product, is an over the top product that caters to the millennial generation," Hussain said. "It has smaller packages and we are going to trial it in four markets outside of our Prism footprint just to learn from that and understand what penetration it can bring."

One of the ongoing themes that CenturyLink has seen with its Prism IPTV product is that 50 percent of the customers are new to the company, while 98 percent take a broadband service.

During the fourth quarter, CenturyLink added 16,000 new Prism customers and more than 190,000 addressable homes in new and existing service areas, ending the quarter with nearly 3.2 million addressable homes.

"There's a huge amount of pull through that comes in and we have to study all of those things," Hussain said. "Content agreements are almost negotiated and for us it is learning to walk before we run so there's a discipline around what we do."

At this point, the service provider is coordinating marketing efforts and putting product development in place.

The new millennial-targeted trial comes as the service provider conducts a soft launch of another over the top video service in its existing Prism IPTV footprint.

Offering the same content package available via the existing service, OTT allows CenturyLink to immediately double the telco's overall video footprint.

This is because the product only requires a user to have a 10 Mbps connection versus the 25 Mbps connection required for IPTV.

"We just soft launched our Prism Stream product and that takes the same package going over the top," Hussain said. "When you go over the top, you reduce the minimum broadband requirement from 25 Mbps to 10 Mbps and it enables a lot more homes."

Hussain added that "it plans to do more of that over time and this allows us to double the size of our video footprint."  

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