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Are We There Yet?

The long and winding roadThe Digital Journey continues...

Over five years ago, in a post on the forerunner of this site, I speculated about where the 'digital journey' might take us, so now would seem to be a good occasion to take stock once again.

For those of us working in the industry, it's sometimes the case that we get ahead of ourselves and assume that (nearly) everyone in the 'real world' is already taking full advantage of all the fancy new technologies that we are offering.  A historical example of this was HDTV - just think about how long it took for that to become TRULY mainstream.

So how far, for example, has the world progressed in terms of consumption of video content via IP based streaming?  As is often the case, the data that are published on a regular basis tend to paint a complex, sometimes contradictory picture.

Coming of Age?

Watching Netflix on an iPadOn the 'plus' side, Google stated recently that YouTube now has one billion viewers a month, representing a year-on-year growth of 50%.

Similarly, Netflix now has over 50 million worldwide subscribers and reported record numbers in Q2, and the same source reports that during that quarter another six million American homes added streaming media players, with penetration of these devices now standing at 17% in the USA.

Clearly, these kinds of devices have the potential to radically change viewing habits.  No wonder then, that, according to another article, HBO has to the potential to generate $600 million a year from online streaming.

All in all, we continue to see growing adoption of new technologies and methods of consumption.  No real surprise there.

On the other hand...

Reports of the death of traditional media consumption continue to be greatly exaggerated, however.  In Britain, recent research showed that the vast majority of people in that country still use the TV in the lounge as the communal viewing location for live content.  

Even in 2014, we are being told that one in eight British adults has never been online and the Prime Minister recently confessed to being baffled by Netflix.

And traditional broadcast radio is also holding its own against internet based services in the US market.

Growing pains

Turning the tapOf course the above only looks at the digital journey from the 'consumer's' perspective. There has also been revolutionary change in the areas of content origination, production, packaging and distribution - but it's not been all plain sailing.

The ill-fated BBC Digital Media Initiative was an example of a highly ambitious project that ultimately failed due to its overwhelming complexity and ineffective management structure.  The BBC's head of IT was sacrificed as a result, a dismissal that was later ruled to be unfair.

More recently, disruption to the BBC's iPlayer service led to a huge level of complaints and also highlighted the fragility of underlying infrastructure.  And Akamai's latest 'State of the Internet' report suggests that only 20% of Europe has sufficient internet bandwidth to support 4K video streams, with the figure falling to 11% globally.

One WayLooking back at the development of the Internet, it is (to me at least) amazing that, thanks to the foresight of its creators, it has proved (largely) capable of handling the multitude of high-bandwidth video streams that could never have been envisaged at its inception.  But nothing better illustrates the pain points in the system better than the recent public arguments between Netflix and various ISPs over the buffering problems experienced by many users in the USA.

Traditionally, peering agreements have been made on the basis of a (more-or-less) equal traffic in each direction.  But the situation is very different where a provider (e.g. Netflix, via Level 3) is attempting to pump a massive number of streams into an ISP (e.g. Verizon)'s network.  Verizon pinned the blame squarely on Netflix, but Level 3, as Netflix's carrier in this case, responded with a rebuttal which explained that the bottlenecks could be easily resolved (from a technical standpoint) by simply adding more router connections at the relevant peering points. 

In the end, as is often (or perhaps always) the case, the underlying issue was a financial one, and Netflix eventually agreed to pay Verizon and other ISPs to ensure that sufficient peering capacity is available for their services.  This in turn raised questions at the FCC, who (with the Net Neutrality lobby looking on) looked into the details of those agreements.

The shape of things to come?

If, as predicted, around half the planet will be using OTT services by 2020, then there are likely to be more skirmishes of this kind over the coming months and years.  Inevitably, the solutions will be based at least as much on commercial considerations, as on technical ones.  That's one common feature we've seen time and time again on this 'digital journey'.

What's your view on the current state of affairs, and how do you see the future evolving?  Please use the comment form below to share your thoughts and opinions.

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