BBC Streaming Causes ‘Bandwidth Explosion’

Will Internet streaming of network TV shows break the business models of ISPs? An early experiment in the UK raises hard questions about that prospect. British ISP PlusNet reports explosive growth in bandwidth usage since the December launch of the BBC’s iPlayer, a Flash app that streams the network’s video programming. Dave Tomlinson from PlusNet said the ISP’s cost of carrying streaming traffic has tripled since the iPlayer was launched, driven by a 72 percent increase in the number of customers streaming at least 250 GB per month.

The iPlayer service makes BBC programs available for free streaming over the Internet for 7 days after they air. Entire programs are available for streaming with no time limit, unlike the 10 minute limit for most YouTube videos. The service is being heavily promoted by the BBC broadcast networks.

The Telco 2.0 blog offered an analysis of how the iPlayer’s popularity will impact British access providers:

The obvious conclusion is that ISP pricing will need to be raised and extra capacity will need to be added. The data reinforces our belief expressed in our recent Broadband Report that “Video will kill the ISP star.” The problem with the current ISP model is it is like an all you can eat buffet, where one in ten customers eats all the food, one in a hundred takes his chair home too, and one in a thousand unscrews all the fixtures and fittings and loads them into a van as well.

The PlusNet data, and Telco 2.0’s analysis, is being discussed at The Register and Slashdot, as well as on the BBC Internet Blog.

Online Video Gains During Writers’ Strike

The writers’ strike may be accelerating use of online video, according to several new reports. Internet metrics firm Nielsen Online says YouTube’s audience has grown 18 percent in the two months since the strike started, while some smaller some online video sites have doubled their audience.

The Neilsen report reflects an acceleration of the already powerful growth of online video. A report issued Wednesday by The Pew Internet & American Life Project documented strong year-over-year adoption iof online video. Here are some of the details:

• 48% of Internet users said they have visited a video-sharing site such as YouTube. A year ago, in December 2006, 33% of internet users reported visiting video sites. That represents growth of more than 45% year-to-year.
• 15% of respondents said they had used a video-sharing site “yesterday” - the day before they were contacted for the Pew survey. A year ago, 8% had visited such a site “yesterday.” Thus, on an average day, the number of users of video sites nearly doubled from the end of 2006 to the end of 2007.

The Serverless Startup

This week’s NewTeeVee conference was the coming-out party for Mogulus, a new online video provider that launched its service with a live video feed of the event. Today Robert Scoble highlights the unusual aspect of Mogulus’ operation: it has no servers of its own and runs its entire infrastructure on Amazon’s utility computing services, S3 and EC2.

“The world has changed,” Scoble writes. “Now ANYONE can build an Internet company and get it up to scale. No more spending nights inside data centers trying to keep servers running.” He also notes that Mogulus got $1.2 million in funding. Mogulus CEO Max Haot told Scoble that the environment is “volatile” and can go up and down without notice, and that it has designed its systems accordingly. Amazon (AMZN) recently introduced a service level agreement for S3 that includes uptime guarantees.

YouTube: 10 Percent of All Internet Traffic

Wondering how the rise of online video will impact Internet capacity? According to data released this week by Ellacoya Networks, YouTube now accounts for 10 percent of all Internet traffic, and 20 percent of all HTTP traffic. Here’s a breakdown of Ellacoya’s data by type:

• HTTP traffic 46%
• P2P traffic 37%
• Newsgroups 9%
• Non-http streaming video 3%
• Gaming 2%
• VoIP 1%

The study has gotten attention because it finds that P2P traffic is no longer the largest component of Internet traffic. Some in the P2P community are contesting that claim, as though P2P had lost some sort of network-clogging bragging rights. But it seems to me that the numbers are all about the rise of video, not the decline of P2P.

YouTube, MySpace Clog U.S. Military Network

The U.S. Department of Defense has begun blocking access to MySpace and YouTube on its network, saying heavy use of the video-centric social media sites was degrading its network performance. “This is a bandwidth and network management issue,” Julie Ziegenhorn, spokeswoman for U.S. Strategic Command, told Stars & Stripes. “We’ve got to have the networks open to do our mission. They have to be reliable, timely and secure.”

The article notes that military commanders acknowledge that many of the sites being blocked are used by troops to keep in touch with family and friends. “This recreational traffic impacts our official DOD network and bandwidth availability, while posting a significant operational security challenge,” wrote U.S. Forces Korea commander Gen. B.B. Bell in a message to troops.

Many troops stationed overseas use the DoD network to access the Internet, but some others use local providers. Ziegenhorn said the sites were becoming “a drain on the system,” but the Stars & Stripes story also mentions security several times. MySpace has been a regular target of phishing scams seeking to steal account credentials.

Joost Infrastructure Gets Scrutiny

Internet video buffs are buzzing about today’s announcement that P2P-based IP television start-up Joost will receive another $45 million in funding, and has cut a deal to deliver video content for Viacom/CBS. We’ve previously noted the potential disruptive impact on network traffic from Joost (previously known as the Venice Project), with early tests showing some P2P clients devouring 2 gigs of bandwidth per day.

Om Malik at GigaOm reports that Joost has had some problems in recent weeks, and says he’s not alone in questioning whether its infrastructure can deliver the goods.

Joost is using a peer-to-peer version of streaming video, which means that it will have to deal with quality of service issues that come along with both P2P and streaming. Those in the technical community believe it would be difficult for the company to guarantee the quality of service of the video streams. … Joost, apparently is going to use some sort of a content distribution network to make up for it all, but that also means the P2P economics that worked so well in the case of Skype may not be an advantage for them at all.

See Anil Gupte’s Video Blog and Mike Wolf’s blog at ABI Media and Wired Epicenter for additional discussion and analysis.

NBC-Fox: More Video In The Pipes

The long-running rumors are true: NBC and Fox are teaming on a free, ad-supported online video service to challenge Google’s YouTube. The real news in today’s announcement is the list of distribution partners, which includes MySpace, AOL, MSN and Yahoo! - just about every major player except Google and Apple.

A lot of the buzzing in the blogosphere is about what this means for GooTube. Some analysts are skeptical that the new partners can play nice, get the model right and execute well enough. But the combination of companies and content add up to a serious player that will consume serious bandwidth. “This is a game changer for Internet video,” said Peter Chernin, President and Chief Operating Officer of News Corporation. “We’ll have access to just about the entire U.S. Internet audience at launch.” NBC’s Jeff Zucker: “Anyone who believes in the value of ubiquitous distribution will find this announcement incredibly exciting.” That group no doubt includes Akamai (AKAM) , Limelight Networks and Equinix (EQIX).

March Madness Boosts Akamai

The NCAA basketball championship tournament is upon us once again. As fans labor over office pool bracket sheets, a securities analyst reminds us that March Madness is about more than just basketball. It’s also about online video - tons of it, broadcast by CBS Sportsline and traveling across the Internet via Akamai’s content distribution network.

Analyst Brent Bracelin of Pacific Growth notes that online ad sales for CBS’s on-demand broadcast of NCAA tournament games have doubled from last year. All told, 56 tournament games will be webcast for free. Bracelin sees this as just one indicator of growth in monetized content over the Akamai (AKAM) network, and bodes well for the company’s bottom line. He boosted his 2007 revenue forecast to $625 million from $617 million and now sees EPS of $1.30 a share, up from $1.27. In trading this week, Akamai shares have advanced more than $2 to $52.58 a share.