Thursday, July 10, 2008

Video on the web to quadruple over next few years

Content remains king and distribution opportunities grow as more consumers discover the web for video. Add to that the convergence of web to TV being pursued by Apple, Netflix, and others, and it is easy to understand why broadband usage is growing rapidly.

It challenges the very ecosystem that has been proving profitable to cable companies and traditional cable programmers, getting a license fee to carry content on a "channel lineup" and charging consumers for packages of channels on a monthly basis. As content creators bypass these old channels for a direct path to the consumer via the internet, it taxes the broadband pipeline and treats the pipe as a commodity rather than a unique relationship. With that in mind, cable companies are testing usage charges for access as opposed to single monthly fees. It kinda reminds you of the old days when your telephone bill was based on the number and length of each call; it sure feels like a step backwards from unlimited usage.

Wallstrip has some timely comments about this bandwidth charge:

Charging for bandwidth usage will impede growth not create revenue opportunities. This approach is not the answer. Still the rise of broadband will enable more IP applications to associate with the content. That unique added value is what can ultimately improve this relationship and provide new revenue streams to replace the old ones. "For the network operator, the ability to bundle a video package with movie access to their other broadband offerings for a specific fee could be a sticky element to keep customers coming back. Then, the broadcaster and video maker can boast more eyeballs viewing their content."

Once this interactive ecosystem is fully realized, the companies that can provide access and support to interact across multiple devices, seamlessly and intuitively, will gain market share. These devices include gaming, mobile, computer, tv, and others that can utilize and interact with these digital streams of content.