A very old presentation on how to get video to consumers over broadband - pre-YouTube by 4 years...

1. Content is not king!
It’s John the Baptist
Chris Marsden
Principal Consultant
Re: Think! Broadband Ltd

2. Why Content is Not King
• Content is bytes not bucks
– It’s volume not value
• Consumers don’t pay enough
• Businesses want connectivity: pipes
• Advertisers can’t cover the gap

3. Consumers pay for content?
• Direct payment replaced by advertising:
– Network television & radio
– Newspapers
• Direct payment for:
– video (Blockbuster + adult)
– computer games
– niche magazines
– Niche cable channels

4. Businesses want connectivity
• Pay for broadband pipes:
– Data transfer
– VoIP
• Limited content usages:
– ‘Coffee break theatre’
– Training
– Financial updates

5. Advertisers can’t cover the gap
• Advertisers buy audiences, not people:
– Inefficient substitute for consumer
preferences
– Insufficient niche targeting
– Especially on broadcast, ‘brand building’
• Business-2-business advertising:
– Tends to monopoly: minimizes transactions
– Supports targeting especially for classifieds

6. Content is not king…
1. Of the Web…
– Where design functions against content
– Where content chokes more profitable
uses
– Where value is driven by email
1. Of the Internet
– Where the WWW is a small proportion
– Corporate data transfer dominates

7. Where content is king!
• Of broadband consumer networks
– Wider definition: video email/conferencing
– Extreme niche micro-communities
– Data traffic driven off the WWW
– Replaces niche cable
• Or at least lots of princesses
– Streaming audio/video
– MP3/DivX downloads
– WWW portals and ‘walled gardens’

8. Content in Convergence
“If convergence moves delivery of most of
the content to the Internet,
and transport grabs 2/3rds of
the revenues from content,
then the network will get a
huge new source of revenue”
• Ben Compaine, MIT, 2001
• http://itel.mit.edu

9. But IP networks won’t get it all
• Broadcast remains efficient for universal
delivery
• Newspapers are ‘a useful flat panel display’
• Downloaded content is efficient
• Streaming content is not
– Networks need more streaming content to
increase mission-critical use of bandwidth

10. Local Streaming Beats Downloads
• Real-time streaming needs redundancy
– Downloads can queue in the system
– Downloads create latency: world-wide-wait
– Downloads can be copied
• Internet streaming is uneconomic
– Cost per stream to host
– Cost in peering for ISPs

11. Content Kings for Networks
• ANSWER: Locally hosted content
– No latency
– No network peering
– Local hosting
• Compelling ‘live’ content hosted locally
• Compulsion: adult, sports, games,
comedy

12. Broadband consumer network
• Need to drive usage
• Without excess WWW-hosted traffic
• Answer:
• Your friendly neighbourhood
• ‘Glut of smut’!

13. The Killer App
• Adult streaming video on demand
• No latency
• Massive revenue share
– (up to 90% on US cable)
• Huge untapped home demand
• Compelling content

14. Why adult?
• High demand
• Low cost
• Supply glut
• Quality preference – e.g. Vivid
• Market educated
– exponential increase in niches
– Increased acceptance in relationships

15. Content Drives Network Usage
• Consumers don’t pay high direct costs
• ISPs gain in network traffic
• Economics of local network distribution
• Content drives subscription
• Adult:
– Salome proved compelling content choice

16. And the future?
• From streaming to downloading
– As security/encryption improves
• From top-down to bottom-up
– Home video and email with camera purchases
• Peer-to-peer
– File sharing
– ‘Video Gnutella’

17. Streaming Now, Peering Later
• To learn more:
• Read