August 14, 2004
The Future Of Internet Video Distribution
The economics of video distribution may be changing drastically and much sooner than you may expect.
Rich Gordon, one of the excellent contributors to Poynter's Online E-Media Tidbits first came across this realization by reading a fascinating report, "Pipe Dreams: Media's Exploding Capacity," prepared for investors by Tom Wolzien of Bernstein Research.
Wolzien finds that a 300Kbps video stream (the quality of MLB.com's Web video service for baseball games) already can be delivered as economically to millions of viewers as cable services. Of course, the image quality is worse than "regular" TV and much worse than digital cable -- or HDTV.
But bandwidth costs are dropping 40 percent per year, thanks to intense competition, and compression technologies are improving at 15 percent per year, Wolzien says. If those trends continue, he finds, (analog) broadcast-quality video can be delivered via the Internet for prices competitive to cable within five years."
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