Optical/IP Networks

Cable Beats Carriers to Shared Video

The explosive appeal of shared Internet video has not been lost on service providers. And consumer demand and competitive pressure from cable companies may push the telcos to host and deliver it to the living room. (See Top Ten Video Sharing Websites.)

The U.S. RBOCs are moving toward such services, but cautiously, and with some legitimate reservations. One big concern is it's not clear how user-generated content and video sharing will make money.

YouTube, which claimed recently it is serving up 100 million video streams every day, has no clear way of making the traffic pay off, Verizon Communications Inc. (NYSE: VZ) FiOS VP of product development Shawn Strickland points out.

“YouTube and others are trying to build an ad model that can monetize all that traffic they’re driving, but they’ve yet to do so," Strickland says. “Most people would agree that the YouTube audience is a teen audience and they are very resistant to advertising messages, very hard to reach,” he says.

The cable companies aren't waiting around for a business plan, though. They're just giving consumers what they want.

Time Warner Cable Inc. (NYSE: TWC) last month quietly rolled out a new video sharing service in Hawaii called "PhotoShowTV," the company told Light Reading Tuesday. Using this tool, Time Warner spokesman Justin Venech says, subscribers can make and upload their own videos to a Time Warner Cable VOD server for hosting. For a limited amount of time, the video can be watched on one of the carrier's VOD channels, which is dedicated to user-generated content, Venech explains.

That VOD channel, Venech adds, was among the top ten most watched of all Time Warner VOD channels last week.

Comcast Corp. (Nasdaq: CMCSA, CMCSK) isn't far behind. The MSO has a subscriber dating service wherein singles can upload their own bio videos to a community portal. The videos are stored and delivered as part of Comcast’s VOD infrastructure, Comcast spokeswoman Vibha Agrawal says. Asked if her company is considering aggregating non-dating user video, Agrawal was a bit vague, saying her company is always looking at new things subscribers might want. (See Comcast VOIP Rollout Spurs Verizon FiOS .)

The phone companies, so far, are limiting video content sharing to inside home networks, and even that mousetrap isn't completely finished. Verizon Monday announced a new service which will soon allow users to pull video content, including Internet videos, from the PC to the set-top box for viewing on the TV in the living room. (See Verizon Hones Home Networking .)

Security concerns also come into play when considering making user-generated content available on its network. Strickland says Verizon is taking a cautious approach due to fears of hosting or distributing video files infected with viruses.

AT&T Inc. (NYSE: T) spokesman Wes Warnock says his company has no immediate plans to include user-contributed video in either its HomeZone or U-Verse service bundles. “We’re always looking at new things we could potentially offer, but it isn’t something we’re doing right now,” Warnock says.

— Mark Sullivan, Reporter, Light Reading

paolo.franzoi 12/5/2012 | 3:44:26 AM
re: Cable Beats Carriers to Shared Video http://www.digeo.com/index.jsp

OldPOTS 12/5/2012 | 3:44:25 AM
re: Cable Beats Carriers to Shared Video With all this new take on high bandwidth, QOS will have to follow soon!

sgan201 12/5/2012 | 3:44:23 AM
re: Cable Beats Carriers to Shared Video This is a bit puzzling to me?? ILEC is selling internet access bandwidth. So, any application that waste a lot of bandwidth and force/entice the user to upgrade to higher access speed (aka youtube), the ILEC will make a lot more money. In fact, in this case of service like youtube, ILEC invest nothing but make more money from the user upgrade to higher service tier, the ILEC wins. So, what is the probem here?? ILEC should encourage more of this kind of applications.

Mark Seery 12/5/2012 | 3:44:21 AM
re: Cable Beats Carriers to Shared Video hi dreamer101,

>> So, what is the probem here?? ILEC should encourage more of this kind of applications. <<

It is said by some that all business transactions are an arbitrage of some type. In the case of Internet bandwidth, the arbitrage is between the marketed bandwidth of a service, and the engineered bandwidth of a service (or as others on this board have observed between the access speed and the throughput). Applications which drive the average bandwidth closer to the marketed bandwidth decrease the arbitrage potential. As long as the video clips remain short and low quality, the arbitrage probably is maintained to some extent (though still impacted). If they were to start getting longer and higher quality, the arbitrage would be impacted and everyone's price would have to go up.

Greater use of video may not cause a single user to need to upgrade their service speed (2 Mbps+ is plenty for video), but it may cause the engineering rules for the entire network to change.

I discuss this in more detail, as well as some scaling challenges with current CMOS-based switching/routing technology, in the book:

Marketing bandwidth to the home(MBTTH)

The situation might be different if people were paying for guaranteed and reserved bandwidth, but they are not. Best effort by definition creates a lack of linkage between the cost of a service and its performance (other than theoretical peak rate). And hence a lack of linkage between traffic demand and revenue, and between comparing the performance of two competing services.

I am not knocking best effort, it has created cheap bandwidth and a platform for tremendous innovation. But there are implications - people just have to understand them and work with them.

Bottom line is that basing engineering decisions, business model, and consumer purchasing decisions based on marketed peak rates is not a simple matter.

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