OTT, VOD to dominate by 2020, driving big network changes
Michelle Clancy | 17-12-2012

With Christmas expected to bring another leap in ownership of tablets, smartphones and other devices, new research from Bell Labs suggests that increasing consumption of video content on such devices will push the wired broadband networks that carry this traffic to their absolute limits over the next decade. Meanwhile, Internet video will become an increasingly large piece of the pie, claiming the majority of viewing by 2020.

Bell Labs predicts that by 2020, consumers in the United States will access seven hours of video each day as opposed to 4.8 hours today. And, they will increasingly consume this additional video on tablets, both at home and on the go.

The research also points to a dramatic shift in viewing habits, as consumers switch from broadcast content to video-on-demand services, which will grow to 70% of daily consumption by 2020, compared with 33% today. The study also found that the proportion of time spent watching managed video-on-demand services and Web-based video from over-the-top (OTT) providers will grow from 33% to 77%. This will come at the expense of traditional broadcast TV services, whose relative share of time will drop from 66% to 10%.

Internet-based video consumption each year will thus grow twelvefold, from 90 Exabytes to 1.1 Zettabyes. Consumption of managed video-on-demand from service providers vs. OTT is expected grow at a 28% annual rate in the period, from 44 Exabytes to 244 Exabytes.

The projections also suggest a twelve times increase in Internet video content as cloud services, news sites and social networking applications become more video-based, and continuously accessible anywhere, anytime on tablets.

Importantly, the study also highlighted how these trends will stretch the capabilities the residential broadband networks many service providers use today: as the delivery of video content rapidly moves from traditional broadcast TV to the 'unicast' delivery of personalised content to individuals, disproportionate pressure will be placed on the IP edge of these networks, where most of the intelligence is needed to deliver sophisticated video and high-speed Internet services.

"Delivery of video from the cloud and from content delivery networks to tablets, TVs and smartphones with guaranteed quality presents an exciting new revenue opportunity for communications service providers, but only if they are prepared to take advantage of it," said Marcus Weldon, CTO at Alcatel-Lucent. "Left unmanaged, the rapid growth in video traffic can turn into a deluge and spell disaster. It is important to look at where service providers' investments can have the most impact, and this research makes clear that the IP edge of both wireline and wireless networks, which are increasingly becoming one and the same, offers the greatest opportunity to improve network performance. At the same time, it also presents the greatest source of risk if not managed appropriately."

Bell Labs found that on-demand video services, such as high-definition premium movie services as well as video sharing sites, will become even more popular over the next five years. As a result, on-demand video will command an increased share of viewing hours, causing peak-hour traffic at the edge of new IP-based networks to grow 2.5 times faster than the amount of traffic on the broadband connections reaching households. This challenge will need to be addressed, comprehensively, if communications service providers are to maintain their ability to deliver high-quality residential multimedia services to consumers, it concludes.