Broadband Opportunities: A Mini Series - Home Video

Report Highlights

• U.S. expenditures for broadband video, that totaled an estimated $5.4 billion in 2001, will increase at a 25.9% average annual growth rate (AAGR) to reach $17.23 billion in 2006.
• Videoconferencing, the largest single market segment, will continue to hold that distinction in 2006, growing at a projected AAGR of 22.6% to reach $5.43 billion.
• Digital TV, accounting for just $941 million in 2001, will grow at an AAGR of 31.6% to reach $3.7 billion by 2006.
• Video-on-demand spending will grow at an AAGR of 25% to $4.25 billion in 2006.
• Streaming media, accounting for just $1.14 billion in 2001, will grow at an AAGR of 27.4% to $3.8 billion.

INTRODUCTION

OBJECTIVES

The idea of transmitting and communicating visual images as easily and readily as telegraphy transmitted text or telephone voice has animated visionaries, engineers and entrepreneurs for much of the past century. While one-way broadcast of video images has become an ubiquitous part of American social existence since television was adopted en masse five decades ago, fully networked, interactive video technologies and services have been implemented only in fits and starts, via a wide range of different, often conflicting, technologies.

During the 1980s and 1990s video-conferencing, first introduced at the New York World's Fair in 1964, slowly gained a modest foothold among very large es, while remaining unaffordable for most enterprises. The 1980s and 1990s also witnessed early, often unsatisfactory, rudimentary, commercially premature forays into streaming video, video on demand and interactive digital television. Still up until now the dominant mode of consuming video information and entertainment has been via traditional broadcast, either over the air or, more recently, cable or satellite. The reasons for this included lack of uniform standards, lack of means of secure transmission of video, and, above all, the lack of high-speed network connectivity in most American homes and small es.

Over the past few years, progress has been made on each of these fronts. The rollout of broadband Internet connectivity has moved from almost zero to reach a still modest, but quickly growing, installed base. At the same time technical standards for video compression and transmission have markedly improved. In tandem these developments have made broadband video applications over the Internet on the verge of being ready for, "prime-time" everyday commercial use in homes, es, multi-tenant units, hotels and, via wireless networks, to the mobile phone.

The prospect of providing new broadband video platforms and services for mass market has attracted a wide variety of players from traditional and wireless telecommunications companies, media companies, and computer networking firms.

This report will provide an early overview of this fast evolving sector, exploring its historical dynamics, unique structures, and most significant emerging trends and markets.

REASONS FOR REPORT

This report is designed for marketers in the media, telecommunications, computer networking, consumer electronics, software and other industries being impacted by the advent of broadband-enabled video. By focusing on how broadband video is transforming older models, including video rentals, broadcast media, communications, education, even medicine via telemedicine, it will help supply marketers with the background to grasp the key trends and trajectories shaping new video networks.

CONTRIBUTIONS

This study delineates the most critical developments in broadband video over the past several years, tracing the history of the field, as well as reporting on the current state of the art. It will examine the near-term commercial opportunities and challenges of several different technologies and products. Through the study of historical patterns, as well as new and impending technological breakthroughs, forecasts are made of dominant marketing expenditure trends projected from 2001 to 2006.

SCOPE

This BCC report includes broadband video product categories, access platforms, end-user devices, applications and market shares. Included are web-enabled videoconferencing over IP, online video on demand, videophone, video e-mail, WebTV, DigitalTV, interactive TV and wireless video. Video enabling semiconductors are excluded from this report, but are examined elsewhere in this series. Excluded, also, are, "over the air", or cable broadcast and packaged compact or digital videodisks.