Tackling Piracy

By Brad

Speaking of streaming video, Stuff sat down with Ted Sarandos, Chief Content Officer for Netflix, to talk about the current state of video on demand. During the conversation, Sarandos talks about combatting online piracy:

[W]hen we launch in a territory the Bittorrent traffic drops as the Netflix traffic grows. So I think people do want a great experience and they want access – people are mostly honest. The best way to combat piracy isn’t legislatively or criminally but by giving good options. One of the side effects of growth of content is an expectation to have access to it. You can’t use the internet as a marketing vehicle and then not as a delivery vehicle.

Number of the Day

By Brad

6 billion — yes, billion — which is the number of hours of video YouTube users watch each and every month. From the YouTube blog:

We recently announced that YouTube hit an incredible milestone of 1 billion unique monthly visitors, connecting 15 percent of the planet to the videos they love. And those global fan communities are watching more than 6 billion hours of video each month on YouTube; almost an hour a month for every person on Earth and 50 percent more this year than last.

The Growing Stream

By Brad

Via Janko Roettgers of paidContent, streaming service Hulu hit some big numbers during the first quarter of this year:

Hulu now has more than four million paying users subscribing to its Hulu Plus service, and the number of subscribers has doubled since last year. The service also streamed more than one billion videos in the first quarter of 2013, which is another record for Hulu.

This is on the heels of last week’s announcement from Netflix that it had hit more subscribers than HBO.

The Streaming Game

By Brad

Speaking of streaming video, Brad Stone at Bloomberg has the scoop on another big tech player making a big play to get in on the action:

Amazon is making e-readers and tablets and will likely soon introduce a smartphone. As it works to build all types of connected devices, that leaves a natural next step: a television set-top box. The e-commerce giant is planning to introduce a device this fall dedicated to streaming video over the Internet and into its customers’ living rooms, according to three people familiar with the project who aren’t authorized to discuss it.

Amazon’s entry will be just another example of how streaming is the future of TV. All the more reason for more investment in the infrastructure to handle the coming flood of data.

Milestone of the Day

By Brad

Streaming giant Netflix announced it had hit an important number the other day. As Andrew Wallenstein of Variety reports:

Netflix reported 29.17 million domestic subscribers in the first quarter of 2013, surpassing HBO for the first time.

Netflix, which ended 2012 with 27.15 million domestic subs, added just over 2 million subs, according to first quarter results issued Monday.

HBO ended 2012 with 28.7 million subscribers, according to data from SNL Kagan.

With HBO’s popular Game of Thrones series the most pirated show of all time, seems like a stand-alone streaming service like Netflix provides is a matter of when, not if.

Video on the Go

By Brad

Via Sue Marek of Fierce Wireless comes a staggering number from Verizon:

Video accounts for 50 percent of Verizon Wireless’  network traffic today and by 2017 the carrier estimates video will make up two-thirds of all traffic over the network. Speaking at the National Association of Broadcasters conference here yesterday, Verizon Communications CEO Lowell McAdam said that the company’s investment in its LTE network is what is making the delivery of that video possible. “With 3G you have video clips but there is buffering. With 4G you can stream video,” he said.

50% of wireless traffic and counting. Wow.

Percentage of the Day

By Brad

25%, which is the amount of American teenagers who now access the Internet on smartphones, according to new results from Pew. As Cecilia Kang of the Washington Post reports:

These young users between the ages of 12 and 17 stand out from adults. About 25 percent of teens use their cellphones to access the Internet, compared to 15 percent of adults.

Pew said this group of “cell-mostly” Internet users portend an explosion of mobile Internet use in the future.

“This is the first time we have measured the cell-mostly population among teens, and we expect this to be an important measure moving forward,” said Mary Madden, a researcher at Pew.

That bolded section from Kang’s article is key. Given that wireless providers are already flirting with capacity on their airwaves, it’s no wonder allocating more spectrum and the transition to all-IP networks are near the top of the FCC’s to-do list.

Big Wireless Data

By Brad

At CNN Money, Kevin Kelleher writes about new numbers from Ericsson predicting major growth in wireless traffic:

Wireless data traffic will continue to grow 66% a year for the next five years. That means, by 2017, monthly mobile data traffic will reach 11.2 exabytes per month, or 13 times what it is right now. Other data points in the report underscore how big the mobile world has become and how quickly it will grow to be much, much bigger. Last year, some 4.3 billion people around the world had mobile devices, a population that will grow by close to a billion in five years.

Annual growth in data traffic will be significantly higher on smartphones (81%) and even higher on tablets (113%). However, smartphones will continue to be the biggest eaters of mobile-network data: In 2012, they made up 16% of devices connected to wireless networks and 44% of total traffic. In 2017, they will be 27% of connected devices and consume 68% of data.

Over 11 exabytes a month.  To put that in perspective, it’s roughly the equivalent of 6 billion HD movies moving through the air each month.

The Data Bowl

By Brad

Speaking of mobile traffic, Scott Moritz of Bloomberg reports once wireless provider saw a big — and I mean big — jump in traffic during last Sunday’s Super Bowl:

From 8 p.m. to 9 p.m. New York time, a span covering the halftime show and the power disruption during the Feb. 3 game, customers used 78 gigabytes of data inside the New Orleans Superdome, AT&T said yesterday. That was almost double the peak volume of last year’s Super Bowl and the most ever for an in- stadium championship game.

All told, AT&T says mobile traffic was up 80% over last year’s game. That’s a lot of tweets, texts, and whatnot.

Big Mobile Numbers

By Brad

Cisco has released the latest update of its Global Mobile Data Traffic Forecast and it contains some rather startling numbers. For example:

• Mobile traffic globally was up a staggering 70% last year, hitting 885 petabytes a month.

• Mobile video traffic was up 51% over 2011.

• 4G connections generated 19 times more traffic than 3G connections.

As for where things are headed, Cisco projects that by 2017 there’s going to be a lot of data flying through the air:

• Global mobile data traffic will be over 10 exabytes each month.

• There will be more mobile-connected devices than people on the planet.

• A full two-thirds of mobile traffic globally will be video.

The full report is available at Cisco, and is definitely worth checking out.

The Twitter Bowl

By Brad

This Sunday is the Super Bowl, and over at CNBC Julia Boorstin previews what the big game will mean for Twitter:

Twitter is expecting thousands of tweets-per-second, making it one of its biggest events ever. Tweets have become such a powerful tool for advertisers that Nielsen, which last year announced a partnership with Twitter, is releasing a new metric to show the value of the “second screen.”

Here’s an amazing statistic: a Nielsen study revealed that a third of people using Twitter are tweeting about content they’re watching. And Twitter found that 65 percent of people are accessing Twitter via mobile devices while watching television.

Interestingly, Boorstin reports half of the commercials airing during the game will feature Twitter hashtags. Two years ago, only one ad employed a hashtag.

Netflix Looking for ISPs to Foot Bill for Fast Lanes

By IIA

In a post for Multichannel News, titled “In Netflix’s Version of Net Neutrality, It’s Entitled to Non-Neutral Treatment,” Todd Spangler breaks down Netflix’s new push for Internet providers to carry their high volume of traffic:

To Netflix, its Open Connect content delivery network program is an all-around win: By caching frequently accessed (and high bit rate) video in ISPs’ data centers, Netflix saves money on CDN costs; ISPs can cut upstream bandwidth utilization; and end users get a better streaming experience.

Netflix argues that this just makes the Internet better for everyone, and doesn’t cost ISPs a dime since Netflix is footing the bill to install the CDN caches anywhere the providers want.

But some ISPs are chafing at Netflix’s offer. Time Warner Cable has gone on record to complain that it’s unfair for Netflix to hold back “super HD” and 3D content unless a broadband provider plays ball and opens its doors for Netflix’s servers.

Spangler argues Netflix’s actions are anti-competitive, since the company is essentially demanding ISPs cut them a special deal. It also restricts content from certain consumers. As Fred Campbell of the Communications Liberty and Innovation Project (or CLIP), writes:

With its “Open Connect” model, Netflix is withholding content from the customers of ISPs that decline to accede to its demands. Though the details of its demands are unknown, it appears Netflix is requiring that ISPs “peer” with them or pay for the installation of Netflix equipment inside their networks as well as the ongoing costs of operating that equipment.

Like Spangler, Campbell also sees this as a move to reduce competition in the market, especially given Netflix’s increased clout through a recent deal it cut with major content providers:

Netflix recently announced a new multi-year licensing agreement that makes it the “exclusive American subscription TV service for first run live-action and animated features from the Walt Disney Studios.” In addition to Disney-branded content (e.g., The Lion King), the deal includes content produced by Pixar (e.g., Brave), Lucasfilm (e.g., Star Wars), and Marvel (e.g., The Avengers). Netflix also announced a multi-year deal with Turner Broadcasting and Warner Bros. that includes the Cartoon Network and exclusive distribution rights to TNT’s television series Dallas. As an analyst recently told Ars Technica, “These movies, if you’ve got young kids—you’ve got to have Netflix.”

Barring some sort of advanced technological breakthrough — say, content beamed directly into our heads — streaming video is the future of entertainment. That makes this latest maneuver by Netflix worth paying attention to. As Campbell points out:

Unfortunately, most consumers won’t realize that Netflix is trying to impose its costs on all Internet consumers to gain an anticompetitive price advantage against its over-the-top competitors.

Staggering Stat of the Day

By Brad

Via Lucas Mearian of Computer World:

During the next eight years, the amount of digital data produced will exceed 40 zettabytes, which is the equivalent of 5,200 GB of data for every man, woman and child on Earth, according to an updated Digital Universe study released today.

To put it in perspective, 40 zettabytes is 40 trillion gigabytes—estimated to be 57 times the amount of all the grains of sand on all the beaches on earth. To hit that figure, all data is expected to double every two years through 2020.

Surprisingly, despite the rapid increase of cloud storage usage, only about 15% of data is expected to be stored “in the cloud” by 2020.

The Smartphone Data Boom

By Brad

A new report from Ericsson finds that smartphone data traffic continues to increase at a rapid rate:

The latest Ericsson Mobility Report, formerly known as the Ericsson Traffic and Market Report, reveals that approximately 40 percent of all phones sold in Q3 were smartphones. Data traffic doubled between Q3 2011 and Q3 2012, and is expected to grow at a compound annual growth rate (CAGR) of around 50 percent between 2012 and 2018, driven mainly by video.

Ericsson’s research shows that online video is the biggest contributor to mobile traffic volumes, constituting 25 percent of total smartphone traffic and 40 percent of total tablet traffic. This puts new requirements on networks to cater for quality anywhere and anytime.

With streaming video showing no signs of slowing down, Ericsson’s call for networks to “cater for quality anywhere and anytime” highlights the critical importance of allocating more spectrum for mobile broadband.

The Netflix Flood

By Brad

At CNet, Don Reisinger highlights a new report showing the effect streaming video service Netflix has on America’s Internet traffic:

Netflix users are turning into the biggest data hogs in North America, a new report suggests.

The report from Sandvine, a company that sells Internet traffic-management systems, finds that Netflix use accounts for 33 percent of all downstream traffic in North America during the peak hours between 9 p.m. and 12 a.m. By contrast, Amazon and Hulu only account for 1.8 percent and 1.4 percent of downstream traffic, respectively.

That’s a lot of movies and TV shows.

Innovation of the Day

By Brad

Via Engadget comes word of a new breakthrough from Hitachi aimed at ensuring data sticks around:

The data can be etched with a laser in three layers on the crystals at a density slightly higher than a CD, then read out with an optical microscope, meaning that future generations could restore the info without needing a proprietary drive.

Hitachi claims this new “quartz” storage can protect data for “hundreds of millions of years.” Wow.

Movement on Incentive Auctions?

By Brad

Over at the National Journal, Juliana Gruenwald has some potentiall good news on the spectrum front:

The FCC appears set to vote on a proposed rulemaking implementing the “incentive auctions” authorized by Congress in legislation signed into law earlier this year. An FCC spokesman would not confirm whether the incentive auction item will be on the agenda for September’s meeting, but several industry sources said they expect the commission will take up the issue at the meeting.

The next FCC Open Meeting is September 28.

Number of the Day

By Brad

One billion — yes, billion — which is the hours of streaming video Netflix hit last month, according the the company’s CEO Reed Hastings. That’s a lot of data.

Perils of the Spectrum Crunch

By Brad

In yesterday’s Wall Street Journal, AT&T Chairman and CEO Randall Stephenson laid out the problems his and other wireless companies face when it comes to the coming spectrum crunch:

The demand for mobile data is now roughly doubling every year. Smartphones use 30 times more data than the cellphones they replaced. Meanwhile, the supply of spectrum supporting mobile devices has remained the same since 2008.

That means we’re in a race against time. The demand for spectrum will exceed supply by 2013, according to Federal Communications Commission (FCC) estimates. If that happens, the speed of the mobile revolution will slow down. Prices, download times and consumer frustration will all increase. And at a societal level we risk jeopardizing the future of our nation’s vital mobile Internet infrastructure, which is generating jobs and investment on a scale well beyond the first Internet boom of the 1990s.

Stephenson went on to call for smart government policies when it comes to spectrum allocation, including requiring those who hold spectrum to actually use it, and creating a national model for deploying wireless infrastructure. He also warned readers what will happen if demand for airwaves continues to outpace supply:

Billions of dollars of investment in spectrum deployment will lead to tens of thousands of jobs. It will also multiply the many innovations and high-tech jobs we see today in the development of mobile Internet applications. But when the industry is unable to obtain and deploy spectrum efficiently, we miss the opportunity to create good jobs—and consumers pay the price.

(AT&T is an IIA member.)

A Look at Mobile Entertainment

By Brad

A new report from Sandvine looks at the effect video and real-time entertainment traffic is having on America’s mobile networks — and hammers home the need for both more spectrum and ongoing investment in wireless networks. Some highlights:

• YouTube is the largest source of mobile video traffic in every region examined, accounting for as much as 25% of network data and no less than 12%

• In North America, video and audio streaming make up more than half of mobile data traffic, led by YouTube, Pandora and Netflix

• Audio and video streaming will exceed 60% of North America’s mobile data by late 2014

• Click-to-cloud smartphone photo back-up and synchronization will emerge as a significant source of traffic worldwide: the phenomena of the continuous cloud/client connection

• In conjunction with the report, Sandvine released this short video on YouTube. Check it out.