Video is eating the world, and everyone knows it. But even as traditional TV providers transition their video services to IP delivery, the growth in online video traffic is fast outpacing that of managed IP video traffic. In other words, the bandwidth load from over-the-top video is growing far faster than the bandwidth load from IP video delivered by pay-TV operators.
According to Cisco Systems Inc. (Nasdaq: CSCO)'s latest Visual Networking Index (VNI) report, video will make up 82% of IP traffic worldwide by 2020, compared to 70% in 2015. However, the percentage of traffic given over to unmanaged video looks to increase roughly 3x, while the percentage of traffic driven by managed IP video -- which is already a smaller portion of total bandwidth usage today -- looks only to double in the same time period. Online video is projected to increase as a percentage from 47.4% to 67.1%. Managed IP video, on the other hand, is actually projected to decrease as a percentage from 22.3% to 14.8%.
Equally interesting from a network management point of view is the fact that collective bandwidth usage during peak hours is growing at a faster rate than total bandwidth consumption. Cisco's data suggest that traffic during the busiest hour will rise at a rate of 36% between 2015 and 2020, but that traffic during an average hour will only increase by 24.9%.
Why does all this matter? Because it means that Internet service providers and content producers have a lot more to worry about in terms of optimizing online performance. And it means that there's a significant ongoing business opportunity for companies that can help mitigate the problem.
Given the trends, Cisco unsurprisingly predicts that content delivery networks will shoulder a bigger portion of the load of online traffic in the coming years. According to the VNI forecast, the percentage of traffic carried by CDNs will jump from 45% in 2015 to 64.5% in 2020.
Here are some of the other interesting statistics from Cisco's analysis:
— Mari Silbey, Senior Editor, Cable/Video, Light Reading