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New Internet Video Distribution Survey - have your say

Today we launch a new survey, part of a major investigation into new business models for internet video distribution (kindly supported by the TM Forum, TelecomTV, the Mobile Entertainment Forum, and TVoverNet.)

By ‘internet video distribution’ we mean: any video material (movies, TV, infotainment, sports, UCG) distributed via internet technologies (IPTV, web streaming or P2P downloading) over any bearer (fixed or mobile broadband networks) to any device (PC, TV, handheld). We exclude traditional broadcasting and physical means of distribution, although the consequences of internet video distribution are looked at.

Do take part here. It takes 15-20 minutes to complete and you’ll get a free copy of the summary results if you invest the time to complete it properly. (The system allows you to come back to complete it if you need to take a break). Survey closes 1st October 2008.

Some of the questions are pretty challenging, so it’s well worth reading the context for it below first:

How will the internet video market develop and what are the best strategies for aggregators and distributors?

As broadband pipes have grown fatter and fatter, the capability to deliver a quality video viewing experience over the Internet has grown. This broadband capability has driven a tsunami of innovation in hardware, software and services. And the eyeballs have followed. All recent data point towards video being the fastest growing segment of all internet traffic and the trends to continue for the foreseeable future. This is true whichever metric is used: absolute number of viewers, total time spent viewing, data traffic volumes.

Growth is not limited to a content category: adult, sports, movies and music are all rapidly moving online. The internet has also led to a completely new category: User Generated Content - home movies have moved out of the privacy of the living room and are becoming more and more professional.

Growth is also not limited to a specific geography: the movement online is a worldwide phenomenon. The internet has no respect for traditional geographies and boundaries.

All the evidence points towards a future where the internet will be a critical distribution channel for all forms of video.

Innovation in video distribution is nothing new - over the last century we have seen cinema, broadcast networks and physical media creating temporary shocks to older methods of distributing content. Despite the gloom of some predictions, live events whether sporting, theatre or music remain popular, and happily co-exist with home entertainment. The transition to and evolution of these distribution channels and the associated business models will probably provide clues as the outcome as more or more content moves online.

However, there is only a certain amount of time in the day available for entertainment in general and watching video specifically. Legacy distribution channels are understandably worried about whether internet video will be additive to or cannibalise their audiences.

A new distribution channel brings opportunities for new entrants to enter markets and disrupt existing markets and business models. The key feature of the internet as an interactive distribution channel only adds to the opportunities and adds to the challenge of existing players to adapt.

User empowerment - for good or ill, it’s happening

This interactivity has even allowed individuals to become distributors in their own right. Positively, individuals have generated their own content and made it available to the world. Negatively, some individuals have used interactivity to distribute content without regard of the rights of the copyright holders. Copyright holders have struggled to enforce their rights. Illegal distribution of content not only threatens the absolute value of content, but has lead to unpopular and complicated mechanisms to protect content.

The absolute volume growth has also placed the internet access providers under severe strain: attempt to increase prices to compensate for the growth in traffic and gain extra revenue through developing additional services is proving very difficult. These forces have generated a considerable amount of experimentation in the market especially in the area of pricing models: subscription, pay-as-you-go, advertising funded, bundles with other distribution channels and offset/subsidy - all exist in a variety of forms.

The net result is the video market is in a state of flux and to most eyes, chaos. Will order emerge from the chaos? In what form will this new order take? What will be impact on the existing players in the video value chain? And, will powerful new players emerge?

We identify three possible scenarios

We are using a scenario-planning methodology to understand the future. This is specifically designed as a way of dealing with uncertain times and rapid change. We’ve identified three likely future scenarios.

Pirate World: Distribution ceases to be valuable, and copyright ceases to be relevant - a new business model is required.

Back to the Future:Traditional distribution methods/business models are replicated on-line; existing actors succeed in reasserting themselves.

New Players Dominate: Rather than the total breakdown of Pirate World, new distributors replace existing ones, as it turns out we still need aggregation as a guide through the jungle.

This study will evaluate the likelihood of these scenarios, each of which paint a picture of the future internet video industry in terms of technology developments, consumer behaviour, service uptake, and usage. These scenarios will be self-consistent and accompanied by a clear “back-story”: the set of assumptions regarding drivers that lead to the scenario as an outcome.

The study will place the drivers of future internet video distribution in a Technological, Economic, Social and Political framework and also evaluate the implications by content type for the value chain of creators, aggregators and distributors. Research will be performed including literature reviews, other desk research, industry research and interviews with key staff from relevant organisations. Case Studies will be produced to bring the “back-story” to life and provide a historical context for both successes and failures.

The study will be an invaluable guide to value chain players who will gain insight to where the current value chain is broken and the steps required to be taken to fix it.

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