Research says that growth in file-sharing traffic to blame for increased capital and operational expenditures.
Every so often we get a new study that makes new claims and predictions regarding P2P traffic. Add to the list a recent one by Multimedia Intelligence entitled “P2P Networking: Content’s “Bad Boy” Becomes Tomorrow’s Distribution Channel.” The study’s focus is on raising the awareness of the potential monetization of P2P as a digital distribution platform.
MultiMedia Intelligence bills itself as a “market research consultancy specializing in the markets and technologies that deliver and monetize digital media and services across multiple platforms” so it’s not surprising that the study highlights the costs associated with the piracy of copyrighted material.
According to the study, ISPs apparently spent over $4.1 billion USD on capital expenditures (CAPEX) and another $700 million USD on operational expenditures (OpEX) as a result of consumers’ use of P2P applications and services. The figures are down slightly down from the $4.2 billion spent in 2006.
“While P2P traffic did not necessarily preempt these expenditures, P2P data flow represents a disproportionately large share of consumer data usage,” reads the press release. “Our research uniquely quantifies the impact that P2P has on broadband operators. Since the majority of P2P traffic is unlicensed content, our research demonstrates that piracy costs are not only impacting content owners, but broadband providers as well.”
MultiMedia Intelligence’s research also found:
- The value of unlicensed (in some cases known as pirated) music trafficked on P2P networks in 2007 was US$69 billion.
- Not all P2P content is unlicensed. The growth rate for licensed content files distributed over P2P networks is much higher than unlicensed, although it is fair to note that we are starting from a much smaller base.
- P2P Internet traffic, despite having grown at a torrid pace for years, will grow almost 400% over the next 5 years. Growing from a level of 1.6 petabytes of Internet traffic per month in 2007 to almost 8 petabytes per month by 2012.
- Perhaps the greatest potential for P2P rests with solutions like P4P, that are more efficient and hybrid services. These platforms can provide live or near live content as well as efficiently distribute recorded material as well. In addition, solutions from companies like PeerApp, who provide caching solutions, will further enhance the efficiencies of these networks by further reducing the need for network interconnections.
I certainly think that P2P is responsible for the capital and operational expenditures. It is file-sharing traffic that is driving the demand for faster and faster Internet connections, not the average Joe watching YouTube videos and checking his e-mail.
jared@zeropaid.com
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Okay so build more infrastructure. Or get out of the ISP business.
Oh and by the way Google re South Korea’s Internet customers there have way faster bandwidth than we do here in America they’re like a decade ahead of us. (Would make for a good article here I think – comparing Internet users’ access across countries).
Open Universe that is due more to the population density than dollars spent on the infrastructure. The U.S. has 80 people per square mile where as South Korea has 1274 people per square mile. It would be similar to the costs associated with running lines for people in Alaska compared to running it per person in New York the costs are monumentally disproportionate. That’s not to say they should be allowed to fall behind on demand. They should be held accountable and its up to them to properly forecast future demand. Expecting speeds comparable to South Korea however is unreasonable and if those are your hopes you will be waiting a while for technology to flatline.
Most U.S. ISPs could stand to spend more on CAPEX regardless of filesharing’s impact.
“potential monetization”. Oy vey. There’s always someone ready to take something that is all about FREE and try to make a dollar off of it.