Broadband Connectivity to drive Internet TV into the Living Room

Jim_Lin

Broadband Connectivity to drive Internet TV into the Living Room
1 Y$ u2 |; ?- o  L' {6 o. N
& a7 v& P4 D* X( q7 V2 @% I6 iProfessional video is no longer limited to traditional broadcast or multicast networks.  According to market research company iSuppli, the market for Internet TV finished 2006 at US$423 million.  By 2011, the Internet TV market will be just under $5.8 billion.   iSuppli defines  Internet TV as professionally produced and distributed mass-market video which is monetized via advertising and distributed through broadband Internet connections.

The result is that the web is quickly growing into the world’s largest on-demand, interactive video library.  The Internet is also evolving into the most ubiquitous video distribution platform ever known.  While the early market for Internet TV delivered to PCs has created growth and excitement, the real disruptive opportunity is yet to come.  As more consumer electronic devices like TVs, DVD players, game consoles, iPods and portable gadgets become web-connected, Internet TV will leap from computer screens into the consumer’s primary media environment: the living room TV.  

7 C, V% n, F  HAmong the most disruptive changes in decades, Internet TV poses both challenges and opportunities for companies involved in the video distribution value chain.  Content owners face the trade-off of “reach” versus “control”, as they navigate this new distribution channel.  Video network operators face the challenge of both a new way to reach consumers, as well as a new competitive threat that could threaten their long-term position in the market.  Meanwhile, a variety of Internet portal companies, content delivery networks, software platform companies and other technology provides embrace the revenue opportunity.

Internet video is dominated by news content currently as that is easily consumed in a “snack” format on PC screens. However, as Internet connections find their way to the living room TV and digital transitions drive an installed base of new set-top boxes, sports and entertainment content will populate Internet IP streams.  The longer form content will drive bandwidth requirements and revenue, threatening the dominance of ‘walled gardens.’
6 y( n# S- ?: \) n6 D; }' k: X
( @0 J7 Y; F8 H& ?iSuppli also found that:
--While News is the largest revenue category for advertising supporting professionally generated Internet TV in 2006, it will be number 3 by 2009, behind Sports and Entertainment.  Although news exceeds sports in the number video streams, the longer form sports content drives more revenue and bandwidth.
% Y9 q$ E; k; B# [; N! a
% M, l6 }' Z0 C/ c8 X# \: M7 v--The bandwidth required for Internet TV will grow by over 44x from 2006 to 2011 to almost 7 million TiB.
) N% L' u' C: b# t/ l% n) b1 |
--Although the number of snacks (content under 10 minutes in length) is about the same as episodes and feature length combined, the longer length of episode and feature length content cause a huge disparity in bandwidth requirements and revenue.
& c$ g/ x( S! m- _+ a2 J
3 P$ c; Q' N3 J; E9 h) n; W--Internet TV will be dominated by North America and Western Europe.  Regions such as Latin America and Eastern Europe will be “rounding errors” through 2011.