Congress, along with many in the content industry, are wondering about the fate of television in an Internet Age. I don’t have answers about the future of television, but I did share a list of questions I think people in Congress and even in the industry should be asking about the relationships between ISPs, content companies and web startups. And for those who even doubt that the future of TV involves broadband, I’d like to offer the following chart, showing that the future is already here. We can’t put this genie back in the bottle.
More Sandvine research shows that half of what users access online is video content.
Sandvine, a company that makes deep packet inspection gear for service providers (its gear was used by Comcastback when it was caught blocking P2P traffic), has put out a snapshot of the traffic flowing across the global Internet in September 2011. Other than the rise of video consumption and the loss of social networking from the top 5 traffic drivers on the download side, the big story here is how to adapt our networks for video usage.
Half of our Internet use is related to video according to Sandvine’s latest data.
Sandvine’s report points out one of the problems with video traffic; namely that it can expand to fill the capacity allotted to it. When capacity is scarce, the quality of video drops from HD to SD or is downscaled, but when congestion clears, the video service will start sending more packets to bump up the quality. This is good for consumers, but it can fill a network, and make it hard for operators to deliver a consistent experience for video and on networks where subscribers use a lot of video. Technical solutions such as adaptive bit-rate streaming or buffering content to a hard drive help. But Sandvine concludes that basic monthly usage caps, such as the ones ISPs are implementing, don’t.
From the report:
Monthly usage quotas have only a limited impact, if any at all, on peak network demand; however, quotas that differentiate between peak and off-peak might have a larger impact. If users had 200 GB per month to use at peak, but unlimited usage at other times, then they would be more inclined to change their behaviors. As an added benefit, the user would perceive a higher value of service (again, if ‘value’ is directly associated with data consumption) due to increased overall usage, without the network operator incurring additional cost to deliver the off-peak bytes. Higher subscriber value and flat operator costs? Sounds like a classic win-win.
Which then leads back to one of the questions that wasn’t asked yesterday at the Senate hearing on the future of TV. Are caps a worrisome protectionist tool to keep subscribers locked to both broadband and pay TV subscriptions? And if that’s a yes, then what should the FCC, Department of Justice or Congress do about it?
Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.
- Q4 Wrap-up: SOPA and the future of digital content
- Connected Consumer 2012: A year of consolidation and integration
- Report: Monetizing Digital Content
