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Cisco VNI Report Shows Set-Top Shift

In what's become a standard refrain from Cisco's annual Visual Networking Index (VNI) report, IP traffic continues to accelerate, mobile usage is up and online video is taking up more Internet bandwidth than ever before.

So what else is new?

Well for starters, digital media adapters are starting to make a significant impact on the set-top market.

According to Cisco Systems Inc. (Nasdaq: CSCO), media streaming devices like Roku and Chromecast will make up 7% of global Internet set-tops by 2019, nearly tripling their count of 64.4 million total media adapters last year to 181.2 million adapters five years later. More impressively, traffic from these media adapters will reach 32% of global Internet set-top traffic by 2019. That's a jump from .68 exabytes per month in 2014 to 3.43 exabytes per month as the decade reaches its final year.

The findings suggest that digital media adapters will play an increasingly important role in video delivery outside of both the traditional pay-TV and set-top vendor markets. Even while pay-TV providers are starting to incorporate online video services into their own set-tops, Cisco's forecast concludes that consumers will still use digital media adapters to access Internet services a significant portion of the time.


Want to know more about the impact of Web services on the pay-TV sector? Check out our dedicated OTT services content channel here on Light Reading.


The forecast also fits with data that Cisco collected about general Internet usage by cord-cutters today. The average cord-cutting household uses 92 GB of bandwidth per month, twice that of a standard pay-TV household, which uses only 43 GB per month.

There's bad news and good news in these findings for pay-TV providers. On the one hand, pay-TV companies are ceding some control over the video experience by porting their services to new and unmanaged devices. On the other hand, operators are able to make their content available to more people in more places, and since they control the broadband pipes, they're also benefitting from growing Internet traffic.

The outlook for the traditional set-top marketplace is a little less rosy. But there is a silver lining for manufacturers like Arris Group Inc. (Nasdaq: ARRS) and Cisco in the growing demand for more expensive gateways designed to handle combined support for Internet, video, WiFi and smart home services. (See Comcast Readies D3.1 & RDK-B.)

Among other top-level highlights from the latest VNI report:

  • Annual IP traffic is expected to reach a record two zettabytes by 2019, growing at a compound annual rate of 23%.
  • The number of Internet users will jump from 39% of the global population in 2014, to 51% in 2019.
  • There are expected to be 24 billion connected devices by 2019, or just over three connected devices per user.
  • IP video will make up 80% of all global IP traffic by 2019, an increase from 67% in 2014.
  • Cellular connections will make up more than 14% of IP traffic in 2019, while WiFi connections will account for 53% globally.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

KBode 5/27/2015 | 2:42:05 PM
Re: Sobering I saw another UN report that claims we're close to seeing 50% online:

 

http://www.ibtimes.co.uk/almost-half-worlds-population-will-have-internet-access-by-end-2015-1503097

 

Though yes, still. Half of the world not online. Only 15% online in developing countries. Pretty amazing as we sit and debate whether our gigabit services are fast enough. :)
Mitch Wagner 5/27/2015 | 1:09:56 PM
Sobering It's sobering to occasionally be reminded that nearly two-thirds of the world's population is not yet online. 
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