Expansion of Online Video Drives Network System Revenues

Yesterday, we mentioned an analyst’s forecast that there won’t be much ad revenue from the explosion in user-gen video and we know the content community has yet to see major returns. At least one sector is doing well, as AP reports: broadband network equipment makers like Cisco Systems. These companies are experiencing greater demand from service providers upgrading their networks to accommodate the extra internet traffic from surging amounts of video. An estimated 210 million people have broadband subscriptions worldwide, and some 40 to 50 million new subscribers are expected to sign on each year, according to networking and telecommunications industry researcher Dell’Oro Group. Greater broadband adoption has led to greater use of video content, the report notes, adding that in 2006, the market for service provider routers was $5.5 billion, a 26 percent increase over the year before. Another analyst notes that Cisco – and its network-building brethren like Alcatel-Lucent, Juniper Networks and Redback Networks – would like to see video delivered to every device everywhere. Zeus Kerravala, a network infrastructure analyst, Yankee Group: “If you’re looking to something to create the next wave of network upgrades, video is front and center. It drives bandwidth like we’ve never seen before.”