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Video Streaming: How it’s Transforming Entertainment

April 28, 2011 - 6 Comments

By Howard Baldwin, Contributing Columnist

The ultimate cultural vision of video streaming was laid out in an iconic Qwest TV commercial from 1999. In it, a man wanders into a dusty, remote motel asking about room amenities. It’s not promising. The bored young lady behind the desk recites in an apathetic tone that the beds are all king-size, and the only breakfast offered is donuts and coffee.

But when the man asks about entertainment, that’s a little different. In the same monotone, the girl answers, “All rooms have every movie ever made in every language any time day or night.” It’s taken a while — probably longer than the technoptomists among us expected — but we’re getting closer to that vision.

For one thing, according to a survey recently conducted by Goldman Sachs and reported by HedgeFundLive, 27 percent of Americans now stream TV shows and movies, up from 16 percent in 2010.

Online video has a short but vibrant history. Macromedia (now part of Adobe) released Flash technology, for adding video and animation to Web pages, in 1996. Real Networks launched the first streaming video technology in 1997, but it required using its own proprietary servers. That never goes over well in technology.

YouTube, of course, was one of those amazing Web success stories, with only eight months separating the 2004 posting of its first online videos and Google purchasing it in 2005 for $1.65 billion. Hulu came along in 2007, first offering television shows from its parent NBC and later movies.

How Digital Video Personalized Consumption

Determining the common denominators for all these advancements is simple. Networks are getting faster. Bandwidth is expanding. And service providers and content delivery networks are getting better at what they do. But those are just the underpinnings. There’s also a widespread evolution going on with other elements of online video streaming that will change the way it’s consumed.

For instance, in a lesson for the viability of open rather than corporate standards, Flash technology is being superseded by HTML5. Users can access online video from not only PCs and laptops but also from tablets and smartphones.

While YouTube has become the leader in user-generated videos, Amazon, Netflix, and Veoh are joining Hulu in offering traditional entertainment industry-generated videos. In addition, Netflix is expanding its streaming services in Canada — part of an international growth strategy. Meanwhile, Hulu is looking at the UK and Japan as potential growth markets.

Similarly, we’re seeing a slew of new delivery capabilities that enable a more personalized experience. The first interpretation of IPTV was to mimic the channel-centric broadcast pay-tv experience, but service providers have since evolved to a broader perspective of video content delivery alternatives.

Launching Progressive Video Delivery Platforms

BT announced its Content Connect program for Internet video delivery in January. In early April, U.S. service provider Verizon announced the availability of video streaming, while YouTube began offering live video streaming. The impact goes beyond entertainment to marketing and education — a company could easily broadcast a press conference or stockholder’s meeting online.

Given how fast online video has changed since its birth, the next ten years could be just as startling. Early adopters are embracing this transition in video entertainment, but it will soon reach the mainstream. It’s not hard to imagine the ultimate result: a highly individual and personalized viewing experience, available on-demand and through a potential multitude of devices.

How soon before the vision surpasses the fantasy scenario of the Qwest commercial? And when will the notion of traditional linear programming — broadcast to a wide audience clustered around the family’s single TV set — essentially become an obsolete concept?

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  1. The problem I see with the exponential rise in "Streaming" is scalability and the strain it puts on the networks. We can keep throwing money into bigger and bigger pipes, adding more routers and servers (more points of failure), compressing the quality out it or: we might want to consider some new technologies, like SMART being developed by that need some real-world testing and funding. Give it a look at least. Dave Clark

    • @Dave, understood, regarding some of the remaining challenges for continuing to meet increased video streaming demand. I will visit the site, as you suggest. cheers, David Deans

  2. 1. revolution or evolution to current ecosystem? for MSO, revolution, play as PSTN vs Voip for content provider, evolution, could expand the region with low cost. for devices, new opportunity obviously. 2. what's the business model in the future? if internet business model, operators lose money and googles will get more revenue from advertisement and register fee.

    • @Deqian, thanks for sharing your perspective. Perhaps it's the potential for alternative video distribution methods that will fuel innovaton in new business models. Content providers seem eager to gain the revenue benefits of making their whole library available to all qualified distributors -- particularly those who have demonstrated a continued upside in consumer adoption for their on-demand service.

      • @David, thanks for good ideas. The only winner of OTT video business model are Content providers and Content aggregators. Operators will lose the game. BT's content connect is connect + CDN (provide internet transit). But the internet transit fee decrease dramatically. I do not think the revenue from CDN could compensate the investment. How could operators get rational ROI of this business, especially in full opened market?

        • @Deqian, I don't know the profit margin objectives for the service providers that are building these offerings. That said, I do believe that BT, Verizon and others that have stated their intent to offer video delivery services have done the required due diligence. This is an emerging opportunity, so we'll likely know more about the outcome within six to twelve months -- that's a reasonable period of time to develop market momentum.