Broadband Data is the New Oil

We have known for some time how effective internet video can be. Now, CBS is in agreement. Gone are the days where the broadcast giants feared online video, worrying that viewers would dump traditional network TV viewing in favor of the computer screen. Instead, CBS has learned that putting their videos online actually drives television consumption.

In this interview, courtesy of Beet.TV, Jim Lanzone, president of CBS Interactive, says “Internet video is finally working.”

I can’t help but think that internet video is finally working for CBS because of greater broadband availability. Think about it. Did anyone truly enjoy the quality of those early internet videos after waiting an eternity for them to download?  Internet video consumers are an impatient bunch. If we don’t see our video within 5 seconds (or less) of clicking ‘play,’ we’re gone.  Do you really want to see internet video succeed? Get reliable 10 Megabit or higher data service to mobile devices, then you’ll see it take off.

On a related note, Cisco recently released their Visual Networking Index (VNI), an ongoing initiative to track and forecast the impact of video on the internet. Cisco says average broadband speeds, currently around 7 Megabits, will grow to an average of 28 Megabits by 2015. Data traffic in the mobile space will increase 26 times between 2010 and 2015, and what may be more relevant is that mobile data traffic will grow 3 times faster than fixed IP internet traffic in that same period.

Cisco sites four primary elements currently driving IP traffic growth: more devices; more Internet users; faster broadband speeds; and greater video consumption. By the end of the year there will be more networked devices than people on earth and by 2015, there will be twice as many networked devices than the people. Video data traffic, already the largest single component of internet traffic, will account for over 50% of total internet traffic by the end of 2012, and increase to 62% of all traffic by the end of 2015.

So, as video consumption on the internet continues to climb, the picture seems pretty clear to me: A fast and reliable broadband data connection is the new oil. Without it, video cannot grow.


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4 Responses to Broadband Data is the New Oil

  1. Blake G says:

    It is truly sad that rural areas in the Midwest have better broadband services than the metro area. Everyone should look into what the rural telephone cooperatives and independently owned companies are doing. They are deploying Fiber-To-The-Premise (FTTP) to all of their subscribers. With this, they can provide traditional broadcast TV over IP, have one box that integrates the traditional broadcast model and over the top (streaming) solutions, data, and voice services all over a single fiber cable to the house.

    I agree that broadband data is the new oil. It has been for our company for the past 10-15 years (first deployments began with the planning stages in 1996) as we have helped deploy these networks. The main problem with deploying broadband to everyone in rural areas is that lawmakers think that rural areas don’t need the same service as a metro area does. If things continue down the current path with establishing lower acceptable speeds for rural areas and legislation decreasing the rural telco financial settlements, these innovators will not be allowed to provide the same services at a reasonable rate to the subscriber. These companies are truly innovators as they helped develop the current standards/equipment to provide these high-speed pipes over the last 15 years.

    • ptschett says:

      It does depend on the rural area. I lived in Gwinner while Dickey Rural Networks in Ellendale was rolling out their FTTP, and my phone, internet (DSL) and cable TV service all improved dramatically. Phone service was clearer and more reliable, I got more internet speed and I gained TV channels all at once.

      On the other hand my parents live in an area in SD where Qwest provides the phone service, over copper wires that probably are the same ones that Northwestern Bell laid in the ground… you can’t even expect 28.8k modem speeds over their phone lines, let alone DSL. Their ISP is shutting down the dialup service at the end of the month, but fortunately they were able to find another local ISP that has a 5Mbit down/1Mbit up wireless service.

  2. The new oil?
    Oil is a consumable natural resource.
    Broadband internet speeds are scalable in relation to current technology and infrastructure.
    Not really a clear comparison.

    • Sundog says:

      It was a figurative comparison, not a literal one. Just as a reliable oil supply helps stimulate the economy and industrial growth, so too will reliable, high-speed broadband enable the growth and faster adoption of video across the internet and mobile devices.

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