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Online Video Market and the Broadband Incentive Problem

A super piece of analysis by Jeremy Penston, one of last week’s Telco 2.0 brainstorm participants, here on the Online Video Market and the Broadband Incentive problem.

Jeremy’s analysis provides good rationale for the ‘New Telco Models of Distribution models’ we proposed on the Telco 2.0 Business Model Map - 1.) service-funded connectivity; 2.) ad-funded; 3.) P2P/Content Delivery Networks, 4.) Device-funded; and 5.) explicit tiering a-la Paris Metro Pricing.

I think the GBP 2.10 figure Jeremy mentions as the average cost to telcos/ISPs of delivering HD (Hi-Def) video assumes that all the bits are backhauled. A topology-aware P2P program that preferentially pulled content from nodes close by would probably lower this cost significantly. And the assumption that HD is the critical medium, whilst it makes for big delivery cost headlines, is probably wrong for some time to come - YouTube shows there’s a healthy market for low-res long-tail and my brother in Sacramento wants his fix of Top Gear (popular TV car show in UK) in whatever format he can get it in…

More on this topic to come once we’ve processed all the ideas and comments generated at the Telco 2.0 event.

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Comments

Hi Simon,

Thanks for the plug on the blog (again). You are quite right that £2.10 is gratuitous headline grabbing, based as it is on the highest definition available (1080p)! I think I am using HD as the battering ram (one Casino Royale movie = 630,000 Google.com), but you are right in what you say about it not being de-facto standard for content delivery at this time.

My conclusion is that because of £2.10, £2.10 will never come to be - if you see what I mean!?! Mass market stuff will stay broadcast.

I would encourage you to read the post today on the network solutions (if you have not already done so) because no matter how topology aware p2p is (and it isn't today), the tromboning of traffic using layer1 and 2 back to distant routers means that it all uses backhaul at this time.

Cheers

Jeremy

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