Streams Won’t Pay for Themselves

To stream, or not to stream? That is the video delivery question. The answer is definitely not streaming, if you belive Dr. Andrew Odlyzko, a mathematics professor at the University of Minnesota and author of the recent paper The Delusions of Net Neutrality (PDF). Odlyzko argues that video is a low-margin business (a point my colleague Stacey nicely recaps over at GigaOM) and that faster-than-real-time progressive downloads are preferable to real-time streaming.

Odlyzko believes that service providers do not need to build out fancy new video technologies or infrastructure, so long as people can wait a second for their content:

The vast bulk of video that is consumed by people today, and is likely to be consumed in the future, does not require real-time transmission. Most of it is movies and video clips that are pre-recorded, and thus can easily tolerate a certain amount of bu?ering. Even many apparently real-time transmissions are actually delayed.

Video can be delivered more efficiently and less expensively using downloads over streaming, says Oldzyko, and these downloads can be more accommodating to the viewing habits of online audiences and just as secure as streams.

Oldzyko thinks the belief that we need real-time streaming is a holdover from broadcast and phone networks. Holding a live conversation definitely requires no latency, and broadcasters traditionally didn’t have a buffering option. Neither of these are relevant concerns for enjoying video content online.

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