After my recent posts about New Media and Android, and the race of other non-telecom providers to offer video services, I had a discussion with a telecom VP in network operations about the endless fight against becomming a dumb pipe yet again. The funny thing is that if you talk to the VP of operations they’re scared, if you talk to the VP of strategy they’re excited. So you wonder of course why they don’t talk to each other ;) Here the great chance the VP of strategy sees (and I share):
There is no such thing as “Dumb Broadband Pipe”
Everyone is getting into Video-Distribution-Over-The-Top — Web2.0 companies, DVD rentals, Amazon, advertisement companies (see BrightRoll, who just announced HD Video Advertising Units), hardware vendors, gaming console players, studios, etc. All these players will want to (want to!) push bandwidth through the network. Neither the current network nor the network of five years will be able to accommodate this bandwidth of services are popping out as they are right now. There will be a consolidation, but that will slow down the amount of bandwidth only marginally. Shareholders expect growth from mergers and acquisitions, not stagnation.
The worst thing they can do is petitioning a Network Neutrality
Service providers will have to bargain and hackle for service level agreements with the network providers, or relinquish their services to network providers for pennies if they don’t want to go out of business. They might not know it yet, but the worst thing they can do is petitioning a Network Neutrality: Either the network operators will limit the network bandwidth on the “neutral” networks or they won’t grow them as fast as they could, or they only scale them if they discover a business (niche or not-so-niche) for them. Everone will be on it on the same terms, and it will be congested. Demanding a minimum guaranteed bandwidth for every video service that is out there is like demanding free premium health care for everyone. I’m sure Europe could come up with a tax-backed financing plan for a “neutral” Internet, but in America this is unlikely — people would probably want the tax-backed free premium healthcare before they want a tax-backed free premium TV program … ok, let me think that over again ;)
SpotXchange offers online video advertising solutions for Publishers and Advertisers. Our unique video ad network will drive quality traffic to your site.