Hulu Bad For the Net, Video Still Not Clogging It

Hulu is a problem. So argues a paper by University of Minnesota Professor Dr. Andrew Odlyzko, who says that video isn’t actually clogging the Net right now, but that streaming video content is such an inefficient way of getting video from one place to another that sites should find better options, such as faster-than-real-time streaming and buffering. The goal of the paper is to counter carrier assurances that they will protect video even without any mandated Network Neutrality. Odlyzko argues that such assurances might lead to special video pathways, but that’s not the Internet the market wants and needs.

Aside from Odlyzko’s attack on streaming, which he says comprises 9.6 percent of total web traffic during evening hours and has grown 169 percent year over year, the largest part of the paper is devoted to data that supports his conclusions that content, such as Internet radio and video, is worth less than connectivity such as voice or Twitter. People don’t pay for content, they pay for connectivity, says Odlyzko.

For all the hoopla about Hollywood, all the movie theater ticket sales and all the DVD
sales in the U.S. for a full year do not come amount [sic] to even one month of the revenuesof the telecom industry. And those telecom revenues are still over 70% based on voice,
denitely a connectivity service. In wireless, there is very rapid growth in data service
revenues, but most of those revenues are from texting, another connectivity service (and
one that the industry did not design, but stumbled into).

The report makes for good reading for those thinking about the value of broadband connections (from a revenue perspective a text message generates $1,000 per MB for a carrier while a wireless voice call generates $1 per MB and broadband Internet generates 1 cent per MB) and next-generation services. But if people will pay for connectivity, why can’t Twitter find a business model?

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