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Making Money in Internet Video

If you are a service provider, the title of this blog probably has you shaking your head. SPs know only too well that Internet video is costing them money because of the expense of maintaining an infrastructure capable of delivering high-quality online video. The good news is that there is a way to monetize that demanding video traffic.

In 10 to 15 years, Cisco Internet Business Solutions Group (IBSG) estimates that consumers will be watching Internet video as much as 50 percent of their video-watching time. Rather than panicking at the thought of supporting that magnitude of video traffic, SPs should be thinking about how to turn it into profits.

SPs have a strategic advantage over current content delivery network (CDN) providers; traditional CDN services allow content providers to bypass Internet congestion points, but do not allow them to bypass potential congestion points within the SP network that provides Internet access to consumers. CDN services delivered via the SP’s network are delivered by CDN caches placed much closer to the final viewer, reducing the probability of having congestion issues over the delivery path.

Research shows consumers are interested in watching more Internet video and are probably willing to pay to watch it on their TVs without connecting the TV to the PC. It goes without saying they expect quality at least as good as they experience from TV viewing. By enabling quality of service (QoS), SPs can market their Internet video service as “TV-ready broadband,” guaranteeing predefined quality for content delivery among the CDN caches and customer viewing devices (TVs, set-top boxes, computers, game consoles, etc.).

Within five years, 80 percent of Internet traffic will be video-based. CDN services, combined with QoS on the access line, are the two building blocks SPs can use to create sustainable, profitable, and differentiated businesses that make money from video traffic by building value for both content developers and consumers.

For more detail on the two-sided business model, see the Cisco IBSG paper, Internet Video: New Revenue Opportunity for Telecommunications and Cable Providers.

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