To IPTV or not to IPTV? That seems to be the big question facing telecom operators as they venture into video. In answering that question, telcos are eyeing cable operators and satellite service providers as their primary competitors. But they may also want to consider a competitor much closer to home – their own Internet service arms. Mainstream broadcasters and niche content owners – from Fox and Paramount Pictures to SpaceRip and Bollywood.tv – have realized that Internet delivery of their content opens up big new audiences beyond the reach of traditional distribution networks.
We're still in the relatively early days of Internet video – low-quality YouTube Inc. clips, news snippets, some movie trailers, and the like. This pioneer stage drawing to a close, and fast. There are now dozens of Internet TV portals that aggregate content and promise a viewing experience on a par with that of conventional broadcast TV. And as detailed in the latest edition of Light Reading Insider, "HD Internet Video: CDNs & P2P Players Square Off," these video delivery networks are starting to break into the one area in which conventional video distributors seem to have an undisputed edge – high-definition video.
HD video delivered over the Internet could wreak havoc with the business models that now underpin conventional video services, including IPTV offerings that are just now getting off the ground. The ugly "D" word – disintermediation – looms as at least a possibility, if content owners have the means to reach consumers directly with high-quality products.
While mass-market Internet HD video isn't going to happen anytime soon, some heady progress is being made by content delivery networks (CDNs), peer-to-peer (P2P) operators, and upstarts that are creating hybrid CDN/P2P models with an eye toward delivering HD video to millions of consumers. There are plenty of snags and details to work out, with business models being not the least of the nuts to be cracked. We've identified more than a dozen companies that have made serious strides in recent months, including BitTorrent Inc. , GridNetworks Inc. , MediaMelon Inc. , Move Networks Inc. , Pando Networks Inc. , Swarmcast Inc. , Velocix , and even those friendly CDN rivals Akamai Technologies Inc. (Nasdaq: AKAM) and Limelight Networks Inc. (Nasdaq: LLNW).
Recent investments by VCs and big infrastructure and network players such as Cisco Systems Inc. (Nasdaq: CSCO) and Comcast Corp. (Nasdaq: CMCSA, CMCSK) in these emerging distribution technology and service providers suggests that video content distribution is an area worth watching. Over-the-top video may not ever replace conventional video distribution, but it could just be disruptive enough to cause some considerable pain.
— Simon Sherrington, Analyst, Light Reading Insider
HD Internet Video: CDNs & P2P Players Square Off, an 11-page report, is available as part of an annual subscription (12 monthly issues) to Light Reading Insider, priced at $1,595. This report is available for $900. To subscribe, please visit: www.lightreading.com/insider.
