market research+online videoA dramatic shift in video viewing habits and equally dramatic increase in on-demand video viewing in the U.S. “will push the wired broadband networks that carry this traffic to their absolute limits over the next decade,” according to new research from Alcatel-Lucent’s Bell Labs research arm.

Bell Labs researchers make their forecasts in a report titled  “Video Shakes Up the IP Edge,” in which they predict that by 2020, U.S. video consumers  will access a whopping seven hours of video each day, up from 4.8 today. Consumers also will turn increasingly to tablets to watch videos whether at home or on the go, says BellLabs.

This trend will be accompanied by “a dramatic shift in viewing habits,” as viewers switch from watching broadcast content to video-on-demand (VoD) services, demand for which will grow to 70% of daily consumption from 33% today, the report says. The researchers also note that cloud services, news sites and social networking applications will become more video-based and be accessible anywhere, anytime via tablets, which suggests Internet video content will increase 12 times.

These trends, according to Bell Labs’ predictions, “will stretch the capabilities [of] 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 personalized content to individuals, disproportionate pressure will be placed on the ‘IP edge’ of these networks,” where most of the network ‘intelligence’ needed to deliver personalized content on-demand resides.

“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,” cautioned chief technology officer Marcus Weldon.

“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.”

The popularity of on-demand video services, whether premium movie or video sharing sites, will only continue to grow rapidly over the next five years, according to Bell Labs, and that will cause “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 poses a serious challenge in terms of video service providers’ ability “to deliver high-quality residential multimedia services to consumers,” Bell Labs states in a press release.

Bell Labs analysts comparing data on video usage and growth from 2012 to 2020 in triple-play (video, data and voice) communications service providers identified the following trends:xx

  • The total time spent watching video will grow from 4.8 hours to seven hours per-user, per-day. Much of this contribution will come from the latest generation of consumers who are more likely to multi-task – for example, watching television while conducting a video call on their tablet – resulting in seven hour’s worth of video consumed in as little as five hours.
  • The proportion of time spent watching managed video-on-demand services and web-based video (also known as 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 grow twelvefold, from 90 Exabytes to 1.1 Zettabyes.
  • Consumption of managed video-on-demand from services providers versus OTT sources is expected grow at a 28 percent annual rate, from 44 Exabytes to 244 Exabytes.
  • 10.5% of managed video consumption and 8.5% of OTT video consumption will occur at the peak hour, 8:00 p.m.
Image courtesy of flickr user bendodson.

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One thought on “BellLabs: Soaring VOD, OTT Video Usage Shaking Up the IP Edge

  1. How many articles will be written with nary a mention of a broadcast overlay to handle video.

    See article with quotes from Tony Melone, CTO, Verizon. The sky isn't falling, bandwidth shortages are overblown and the FCC continues to the drumbeat of "not enough spectrum".

    The following comes from an article written by Stephen Lawson:

    Verizon Wireless expects to use broadcasting to deliver live video over its upcoming LTE network, as part of efforts to deal with heavy demand for capacity, a company executive said Monday.

    The plan was one of several insights that Verizon Wireless CTO Tony Melone provided at the Open Mobile Summit in San Francisco. The carrier is on track to launch LTE (Long-Term Evolution) in 38 cities later this year and across its whole current 3G coverage area by the end of 2013, Melone said. He and other speakers said growing demand for video poses one of the biggest challenges in the mobile world.

    “We’re working with all of our infrastructure providers … to develop the technology to incorporate a broadcast capability. To evoke that, you have to dedicate a portion of your spectrum. So a portion of your capacity would have to be allocated to this broadcast capability,” Melone said during a panel discussion. “We think that will be a solution to this problem down the road, that there will be a broadcast element to our 4G network that can then more efficiently deal with the live content.”

    Broadcasting requires less capacity per user if many subscribers want to watch the same content at the same time, because the carrier can send out just one stream of content to many users instead of a separate one for each user. There are mechanisms for broadcasting and for multicasting, another resource-conserving way of distributing content, built into LTE, according to Nokia Siemens Networks CTO Hossein Moiin, who also spoke on the panel.

    Note that Tony Melone, Verizon, was addressing broadcast capabilities to handle video–please research this and you will see I am correct.


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