Interesting essay in the Economist, 6/23/01, in special section on the Internet Grid, about Video on Demand. They report that content providers now pay about 1 cent per megabyte to stream video, and that a short movie is about 1000 megabytes. They then conclude that streaming such a movie would cost $10. And this is just the streaming cost, never mind the content cost or the cost of the infrastructure of the content provider’s operation or payroll.
They then say that this streaming cost may be reduced to 1/3rd of a cent by 2005 (J.P. Morgan Chase estimate), but that this would still leave video on demand mostly unfeasible even then.
And in conclusion they make reference to the other more familiar hurdles, such as getting content owners (MGM, Universal Studios, etc.) to agree to provide content, and the last mile problem.
And they suggest video on demand will not become mainstream until 2010.
Well, I have to suppose that the cost of streaming video would fall by more than 67% in 4 years, but I have no information on that. Is there a graph showing such costs over the past years? Could be informative.
Also, this makes me think that video on demand may get started not with mainstream video, such as the latest popular movie, but more arcane video that cannot be easily accessed at the local Blockbuster or DVD rental. X-rated stuff, old movies, old TV shows, foreign movies otherwise unavailable, special instructional material (e.g., medical, technical), tourist materials, and such. There a few dollars would not be so big a factor, and furthermore the Internet could be the sole way of getting such material. And maybe it will be 2010 before there is mainstream use of video on demand. But my guess it won't be that long. Maybe 2008.5. |
