With ever increasing demand for bandwidth but no additional income being generated will ISPs survive the digital revolution?
Over the past few years we have seen quite a sudden evolution of the Internet and serious changes to the way people use it. Today's Internet users want to see media rich sites full of downloadable content. Consumer devices and entertainment systems like the Xbox 360 or the Playstation3 use the Internet to deliver new content and download high definition video. Messengers, e-mail, VoIP, and all sorts of other applications are pushing and pulling data over the Internet than ever before. The BBC recently decided to start making its shows available to view online. Using flash video or WMV via a downloadable P2P application viewers can catch up on shows from the last 7 days. I have to say that it's a great idea; it's just so convenient. The BBC has estimated that approximately 17,000,000 programs were watched in January alone.
But it's not all good news; The Register reports that in its first month iPlayer has pushed ISP's costs up 200% from 6.1p per user to 18.3p per user. So far as content delivery goes, this is still early days—those figures are based on an average of 19 minutes per user, which is rather conservative. Bandwidth costs ISP's money—even those with their own networks (as opposed to resellers) need to beef up their infrastructire to support ever increasing throughput. With heavy competition, increasing costs and no additional income, how will ISP's survive?
Obviously somebody has to pay. Can content providers be passed the cost? Are we going to see metering with end users footing the bill? Maybe innovation in networking and data transfer technology simply mean this isn't a problem anymore?