Broadband Penetration Is Not What’s Driving Online Video
So many press releases and reports I read still talk to broadband adoption as if we are still in the year 2000. They say things like "due to the growth of broadband", "because of the proliferation of broadband subscribers" and "the widespread penetration of broadband" etc… broadband access is not the reason online video usage is growing.
At least 55% of all connected households in the U.S. are already accessing the Internet via a broadband connection (some reports say as high as 63%) and the majority of all users who are on a computer at work are on broadband. Yes, the downstream speed of broadband is growing but anyone who is on a DSL line gets at least 1.5Mbps which is plenty fast enough to get a 300Kbps stream, which is considered broadband today. And it should also be noted that two years ago, the standard rate at which "broadband" video was encoded, is the same it is today. So for all the hype around broadband, two or three years later, we’re still encoding and consuming the majority of our online video content at the same speed. So the growth of broadband has done nothing so far to change that.
When you talk to a company about it’s services or products in the space it’s amazing how many of them always throw in the broadband growth sentence as if they have to mention it, as if that validates something or makes them look like they "get it". And most times, if you then ask them for market data on how broadband is growing, at what speeds and in what regions, they have no idea. It’s like somebody in their marketing dept preps them and says "make sure to mention about how broadband is growing." I see it all the time on CNN as well when they interview someone on the stock exchange floor. The person being interviewed always make a reference to some aspect of broadband if they are from a tech company.
Yes, broadband plays a role in the consumption of video, but we’ve had over 100 million households with broadband access for almost the past 4 years now. We should be talking about the real factors that are driving the growth of online video and more importantly the factors that are limiting the usage and growth.