The Online Video Industry Is NOT Suffering From "Bandwidth Bottlenecks"

I keep reading articles and press releases that use the term "bandwidth bottleneck" and talk to how the lack of available bandwidth is somehow the factor that is stopping the adoption of online video. What are these companies talking about? There are more broadband customers than ever before, the average DSL or cable modem is between 3-6MB and there are plenty of folks like me who have 20MB or those who are accessing the Internet via their corporate LAN. Bandwidth is NOT the problem.

Yesterday, IBM put out a release about a new prototype optical receiver chipset that is at least 8x faster at 160 gigabits of data/second, than currently available optical components. I think that's great and I'm sure down the road it will become useful. But instead of stopping there, IBM had to then use the analogy of "That's fast enough to download a high definition feature-length film in one second, versus at least 30 minutes using the fastest available technology today." No one is even downloading movies in any volume in non-HD today, let alone HD. And if they were, it would take the average person about 3 hours to download a non-HD movie.

It's the business models behind the creation and consumption of content that the industry is working on and at this point in time we assume nearly all of our viewers have a broadband connection capable of them getting at least a 300Kbps stream. When was the last time you even saw content, other than audio, encoded below 100Kbps? Yes, we do have some bottlenecks in this industry, but nearly all of them are ones pertaining to business and consumption, not bandwidth.

Comments

[I. T.]

It is not only the bottleneck on your connection to the provider, second bottleneck is the server's capacity to deliver the content to multiple users. If 1000 (or 10.000) people demand the content from the same source, that source is bound to collapse if there is not some kind of P2P protocol to help it, meaning users delivering content to each other, doing the servers job.

[Shoehorn]

There certainly is a shortage of bandwidth at the core, arguably driven largely by increased video consumption.

According to HeavyReading's February DWDM report, "The bandwidth glut is over. Operators worldwide are reporting limited bandwidth supply and more stable pricing. Many new backbone optical builds are underway, and there are few if any distressed assets in the carrier market that can disrupt pricing and supply in wholesale markets."

Your argument that improving broadband penetration is evidence of a glut is in-fact the main problem. In Japan where penetration of 100Mb symmetric connections is high, video traffic rapidly created bandwidth bottlenecks at the core. High bandwidth changed access and usage models, forcing the bottleneck upwards towards the core.

I guess snails-pace broadband penetration in the US is a saviour to US core telcos.