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The study of the sector by UK technology and telecoms advisor firm, Analysys, forecasts that it will be worth nearly USD200 million in 2006 from around USD25 million in 2001. Analysys said that video streaming traffic and revenues will grow annually by an average of 90 percent and 50 percent respectively, but growth will only really accelerate in 2005.
According to the report's author and principal analyst in Analysys, Margaret Hopkins, it will take until this time due to the lack of availability of broadband and because most organisations currently do not view video streaming as essential to their operations. "The low levels of broadband deployment in Western Europe combined with the fact that video streaming isn't essential to businesses means that there will be low-levels of steady growth over the next couple of years," Hopkins told ElectricNews.Net.
She added that the growth up until 2006 will be driven mainly by the use of video streaming in corporate communications, training and marketing. "Video streaming provides instantaneous corporate communication in a very engaging and emotionally forceful manner," remarked Hopkins. "An SME can now produce a Web cast of its chairman's address by using a digital camera costing a few hundred dollars and free download software for encoding and playing the resulting stream."
However, Hopkins said that companies wanting a "smooth and polished result" will need to engage third-party specialists for content creation - video capture, editing and encoding; and for content delivery, which would ensure users get a reasonable video experience.
This is, of course, is good news for video-streaming specialists such as Irish company Servecast, which already has a number of corporate clients. "We can see tremendous growth in streaming use," Catharine Trustram-Eve, marketing director of Servecast, told ElectricNews.Net. "In particular, innovative users of technology see streaming as an opportunity to reduce costs and improve communications performance."
However, the report does not have such welcome news for telecom operators who are hoping that the widespread use of video streaming will consume large amounts of bandwidth and, therefore, increase their revenues.
According to the report, the price of access bandwidth is still high enough for corporate users to go out of their way to avoid buying more of it than they must. Instead, corporate users are likely to implement techniques that involve content delivery networks (CDNs) and IP multicast to get round the access bottleneck.
The report said though that there is an "immediate" opportunity for service providers in helping corporate IT and communications managers implement support for video streaming, through consultancy services, and through intranet CDNs, whether built in-house using caching appliances or outsourced to the CDN service providers.
But, it added, the major problem with this is that communications managers are generally reluctant to allow service providers behind the firewall, which is necessary to solve the access problems at large sites. "Most telecom companies lack the expertise to provide these types of service, and will need to either form partnerships or acquire companies," commented Hopkins. She noted that recently there have been several such acquisitions such as Cable & Wireless buying Digital Island and Adero being bought by Colt.
On a more positive note for telecoms, Hopkins said that the anticipated market growth in the video streaming market will create more demand for Internet Protocol virtual private networks (IP-VPNs) and IP multicasting technology.
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