Not too long ago when someone got on the internet the chances were it was to do email or to search for information. In other words communication was mainly one to one and users were primarily consumers of information. With a few exceptions these were not time sensitive pursuits and were heavily biased towards downstream communications. Not any more. Many users have become participants creating, sharing and commenting on content. This will come as no surprise to anyone with children in their teens or twenties, as this change in usage is being driven by them – the Millennial Generation. Accounting for 48% of the world population makes them numerically the most significant generation so whatever they do has an impact.
Numbers vary by region with Europe and North America at 31% and 36% respectively being the lowest. As a comparison the Boomer generation represents 16% of the global population and 22% of Europe and North America.
This 
is the generation that invented social networks. As children they were involved in family decisions and as a result they are far more collaborative than earlier generations. 64% of them think that everyone in the group is equally important. This is also the generation that redefined the word "friend". No longer is a friend someone that you have met and communicate one on one with. A friend can be someone that you’ve met once and never spoken to again, or even someone you’ve never met. As a result it is not uncommon for friends on Facebook and MySpace - two of the leading social network sites - to number well over a thousand. The significance of this becomes apparent when you realize that photos and videos uploaded to these sites can be viewed and downloaded by a persons’ friends – and in some cases by friends of friends as well.
As well as sharing photos and videos these sites are also used to solicit opinions. Informally – "Which bridal gown shall I wear?" with accompanying photos and videos of course, and now more formally as companies are starting to experiment with Facebook for market research purposes.
Whilst Millennials are leading the way in becoming active participants on the web, their habits are rippling through all generations. Of Facebook’s 175 million users 75% now are not of college age and the fastest growing demographic is those aged over 25. Habits generally associated with younger generations are being adopted by seniors. In a recent US survey 13% of those aged over 73 reported both watching videos online and also downloading them.
The significance of video cannot be overestimated. As well as being uploaded to social network sites, vast quantities of it are being uploaded to You Tube for sharing with a wider audience. 9,000 hours a day of it to be precise. This is the equivalent to the output of 375 TV stations broadcasting continuously for 24 hours. Or to put it another way more video has been uploaded to You Tube in the last 6 months than could be output by 3 TV stations broadcasting 24 hours a day for the last 60 years! And of course for every one person that uploads there are many more that download and / or watch online.
In addition to all of this, video also accounts for approximately 70% of all P2P traffic, although this figure is starting to decline as users are turning to online storage and web based file sharing as an alternative.
Video of course is the bandwidth hog that is causing the explosion in internet growth. In 2007 US video sites transmitted more video than was carried over the entire internet backbone in 2000. According to a white paper released by Cisco last year Global Internet IP traffic is nearly doubling every two years and is projected to reach 28 Exabytes per month by 2012. Of this consumer usage accounts for 20 Exabytes (see table for definition of Exabytes). Unsurprisingly 72% of this is video traffic.
1 bit= A unit of information having two possible values, as either of the binary digits 0 or 1
8 bits = 1 Byte
1000 Bytes = 1 Kilobyte
1000 Kilobytes = 1 Megabyte
1000 Megabytes = 1 Gigabyte
1000 Gigabytes = 1 Terabyte
1000 Terabytes = 1 Petabyte
1000 Petabytes = 1 Exabyte
Equally interesting from a satellite providers point of view is a recent study of global internet traffic showing that overall the ratio of downstream to upstream data traffic is now approximately 3:1 with regional and time of day variations.
Most significant is the fact that real time applications (gaming, VOIP and video communication), which only account for a small percentage of IP traffic, are the applications that show the greatest increase in usage by individual subscribers during peak hours. In other words, the time when there is the greatest potential for congestion due to more subscribers being online and carrying out bandwidth intensive but non time critical activities (uploading and downloading video) coincides with the time that more subscribers want to do real time applications. This means that highly time sensitive applications have to compete for bandwidth at precisely the time when the "pipe" is likely to be already full, which can become a major QoS issue.
So we have the new internet:
- Exploding demand for bandwidth;
- One to many communication;
- Content creation by all (In the latest Alexa Global Traffic Rankings 6 out of the top 10 websites depended on user generated content); and
- Most time sensitive communications occurring at peak times.
Coupled with this is the recognition of the importance of broadband around the world. There is $7.2 billion in the American Recovery and Reinvestment Act set aside for broadband, France has created the Numérique 2012 plan aimed at providing broadband to the "white space", the EU and Australia are pushing for universal broadband access, to name but a few of the current initiatives. Does satellite have a role to play? Absolutely. Both WildBlue and Hughes in the US, with nearly one million subscribers between them have proved that there is a market for satellite broadband. Nevertheless despite widespread availability of both terrestrial and satellite service in the US 33% of households are still without broadband. Some of these won’t take it at any price, others will subscribe if it becomes more affordable and others will subscribe if higher data rates are offered. In some countries perception is also a major issue that has to be addressed, but as has been demonstrated in the US that is one that can be overcome.
The continuing challenge for operators is to drill down through all these statistics to identify these different segments and address them accordingly; something that will become easier with the next generation systems such as the ones proposed by ViaSat and Eutelsat. Consumers want broadband, they want more of it and they want it at an affordable price. Within these constraints they are by and large technology agnostic. If satellite can identify and meet these needs the potential market for the next generation will expand beyond the unserved areas to the underserved areas (areas where only "basic" broadband is available) when lower costs and higher bandwidth make satellite a viable competitor. The more pressing challenge in the current economy will be to raise the money to finance these systems to ensure that satellite is still in the race when the recession ends. The recession may cause the increase in consumer demand for bandwidth to slow down, but it will not go away.
Video is already a way of life and it’s here to stay.
-----------------------------------
Elisabeth Tweedie has over 20 years experience at the cutting edge of new communication and entertainment technologies. She is the founder and President of Definitive Direction a consultancy that focuses on researching and evaluating the long term potential for new ventures, initiating their development and identifying and developing appropriate alliances. During her 10 years at Hughes Electronics she worked on every acquisition and new business that the company considered during her time there. www.definitivedirection.com She can be reached at: etweedie@definitivedirection.com +1 310-292-0755 or +44 (0)7768 610574.
