Streaming ahead

Telecommunications, Jan, 2001 by Sanjima DeZoysa

Forecasts from Visionconsult say that the video streaming market will grow dramatically in the next three to four years, opening up new and competitive market opportunities for telco operators.

In its latest streaming report, Vision-Consult, an independent media research consultancy, affirms that in the last year the video streaming industry has become 'prime time and a key potential market for major companies'. There are considerable opportunities in both the business and consumer market for video streaming applications. Although video streaming is most commonly associated with streaming applications via a PC, a significant evolving market for telco operators is video streaming to the TV.

With increasing competition and further deregulation, what was once the exclusive market territory of cable companies - TV entertainment services - is fast becoming a viable revenue generating opportunity for telco operators. Relying on providing the traditional voice and internet-based services to PCs, dismisses 80 per cent of residential consumers who do not have a PC in the UK, and on average 86 per cent in the rest of Europe. This is a lucrative area that telco operators are now keen to expand in.

Video streaming works through the process of caching, where instead of having to wait until the whole file is downloaded, several packets of information are stored and played back while further packets are being downloaded. Downloaded content is made available in the form of an uninterrupted stream of data, as opposed to a series of packets. Streaming allows users to watch large movie files or listen to lengthy audio broadcasts without lengthy download times, as well as allowing live events to be 'broadcast' over the web.

The key driving force behind video streaming has been the availability of more bandwidth, and increasing DSL (digital subscriber line) deployment - the technology which brings high-band-width data into homes and businesses over ordinary copper telephone lines. Although there have been strategic delays among operators regarding DSL deployment, indications are that they are now determined to build DSL out. Barclay Dutson, Visionconsult's president claims, "BT and Deutsche Telekom are both forecasting about two million connections in the next year or two. Certainly in Germany there is a lot of advertising at consumer level for DSL." Chiris Colman, director of sales and business development (EMEA), PixStream, which develops and manufactures technology solutions to transport video and audio over broadband networks, adds: "The development and deployment of DSL technologies have had a profound impact on the state of the telecommunications industry."

Another important factor has been the growth of streaming content delivery networks which claim to handle close to one million simultaneous streams, although Visionconsult estimates the largest number of simultaneous streams served to date is 60,000. Dutson points to companies like Akamai and Madge who have set up user networks where it is faster and cheaper to works where it is faster and cheaper to serve data-rich content from servers located close to users at the 'edge' of the internet than from certrally-located servers. US$7 bn ([epsilon]7.8bn) of capital is expected to be spent on these networks by 2003.

Visionconsult point to other driving forces including:

* the continuing growth in Europe of the 'free' internet service, initiated by Freeserve UK, means that people will be streaming more, as they don't have to keep an eye on the clock;

* the realisation in Europe that mobile services will be a viable streaming delivery medium, especially if broadband operators are slow to build out their networks. RealPlayer 8 will be incorporated in Nokia's next generation smartphones in 2001, and 112kbps capability has been launched over some existing GSM mobile networks in Scandinavia; and

* the major plays of Real and Microsoft to become content portals. This has made it tough for other players (e.g. DEN and Pseudo) to stand alone, and other specialised services, such as video search, music players and MP3 search, being incorporated into these portals.

Cost and development

The ease with which streaming software can be installed onto existing networks depends on the infrastructure already in place. The complexity is in terms of the management of network resource and obviously there are infrastructure costs associated with the provision of video services. The infrastructure needed to enable video transmission is largely the same as that required to deploy high-speed internet services to residential subscribers. Video streaming is really a secondary application that can make use of existing and developing high-speed infrastructure. The amount of bandwidth required to transmit high-quality real-time video signals over a network are generally agreed at 2Mbps minimum bandwidth for VCR quality, and 3.5Mbps for DVD quality. Both ADSL (asymmetric digital subscriber line) and VDSL (very high-speed data rate digital subscriber line) provide this minimum requirement.