In a recent working session on market trends, we debated the issue of what impact internet video would have on the pay TV market such as cable or IPTV. This is an interesting one, as on the one hand, we have reports of increasing online viewership skyrocketing -over 10 billion videos viewed in Dec 2007 in US alone according to Comscore, and according to the research Cisco has done in its IP Traffic Study, the Internet video in the U.S. generated more traffic in 2007 than the entire U.S. backbone could handle in 2000. Cisco’s Global Consumer Internet Traffic Forecast Source: Cisco
On the other we have forecasts for IPTV market claiming over 60 million subscribers by 2011, the mobile market forecast to grow over 200 million broadcast mobile TV users worldwide by 2011 and other digital Pay TV markets, such as digital cable, projected to grow to over 300 million by 2011.
In sum -anything video is growing, and growing big -and they don’t seem to be dramatically impacting the growth of each other. How can that be?Are we watching more video? Yes, even if we don’t know it. Video is fast becoming an integral part of nearly every network experience we have (even at work, my Cisco IP phone
pops up a video image of the caller whenever I answer the phone). Beyond that, I also think that both sides of the video market can continue to grow because of the changing way users are interacting with medium. I think we are moving away from technology-focused viewership (i.e. in front of a TV, on my handheld device, on my PC) and more towards convenience based viewership. People do not care or want to know what technology makes it all possible as long as they are able to get what they want to watch at anytime time and place of their choosing with the quality of experience they want for that particular case (i.e. my quality expectations are far lower watching a clip on YouTube than they are when I am rooting for Ferrari
watching a live Formula 1 race- go Felipe!).While being able to offer many different formats of video to a wide array of devices on demand is no question a daunting technical challenge for Service Providers, it also opens up quite a number of lucrative opportunities for increasing their subscriber revenues and monetization of the existing traffic on their networks especially if they are also broadband providers. By using the same pricy content across multiple screens (TV, computers and mobile), a provider can not only service its distinct subscriptions for home service but also receive the premium associated with a blended inter-device service for its convenience prone viewers. PCCW
, a leading provider in Hong Kong, is a good example of this with its”now TV” content via its internet, IPTV and mobile platforms. This is a part of the”change the math
” concept we’ve talked about as we can’t just be thinking about a triple or quad-play, but rather the nearly infinite service possibilities, or”any play,” that an IP next generation network