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Video streaming market worth almost US0 million in 2006, says Analysys, but market will not take off until 2005


* traffic and revenues grow by an average of 90% and 50% respectively each year to 2006

* corporate communications, training & marketing, investor relations to drive growth

* high bandwidth cost drives corporates to implement caching and mirroring solutions

* telecoms operators will need to partner or acquire skills to benefit from video streaming opportunity

* market growth to create more demand for IP-VPNs and IP multicasting technology.


CAMBRIDGE, UK, January 16, 2002 - Video streaming is finally becoming a realistic option for businesses and as a result the market in Western Europe is forecast to grow almost tenfold in the next five years, from around US million in 2001 to nearly US0 million in 2006, according to Video Streaming for Enterprises: forecast revenues for service providers, a new report published by Analysys, the global advisor on telecoms and new media (http://www.analysys.com).


Driven mainly by use for corporate communications, training and marketing, and enhanced investor relations, video streaming traffic and revenues will grow by an average of 90% and 50% annually to 2006 (charts available to journalists on request), but growth will only really accelerate in 2005, according to the new report.


"Video streaming provides instantaneous corporate communication in a very engaging and emotionally forceful manner," says report author, Margaret Hopkins. "An SME can now produce a webcast of its chairman's address, using a digital camera costing a few hundred dollars and free download software for encoding and playing the resulting stream."


However, according to Analysys, a company wanting a smooth and polished result will need to engage third-party specialists for content creation - video capture, editing and encoding; and for content delivery - which ensures users get a reasonable video experience.


Telecoms operators (TOs) have been pushing video for decades as something that will consume large amounts of bandwidth and hence drive up revenues. But the price of access bandwidth is still high enough for corporate users to go out of their way to avoid buying more of it than they must. Instead, corporate users are likely to implement techniques that involve content delivery networks (CDNs) and IP multicast to get round the access bottleneck.


An immediate opportunity for service providers lies in helping corporate IT and comms managers implement this support for video, through consultancy services, and through intranet CDNs whether built in-house using caching appliances or outsourced to the CDN service providers. The key problem to be overcome for the services model is the reluctance of corporate comms managers to allow service providers behind the firewall, which is necessary to solve the access problems at large sites.


"Most TOs lack the expertise to provide these types of service, and will need to either form partnerships or acquire companies," adds Hopkins. "We have seen a spate of recent acquisitions in the area - Williams has bought iBeam, Cable & Wireless has bought Digital Island, and Adero has been acquired by Colt."


For TOs hoping to gain a large slice of the content delivery market, therefore, the opportunities are surprisingly limited, according to Analysys. TOs do have other opportunities in the video streaming market. Market growth will create more demand for Internet Protocol virtual private networks (IP-VPNs) and IP multicasting technology. TOs can take steps to target IP-VPNs at the video streaming market. Appropriate quality of service (QoS) guarantees can be provided as part of an IP-VPN offering, and combined with support for IP multicast and caching and mirroring services.


Written by Margaret Hopkins, the report assesses the revenue potential for TOs and other service providers in the video streaming market. Forecasts are provided for France, Germany, Sweden and the UK to 2006, for traffic volume and revenue, broken down by content source, delivery method and streaming type. The report is available at GBP900 for single-user electronic access, one paper copy and one hour of Analyst Support.


For more information, telephone Analysys Research on +44 (0)1223 341300 or email research@analysys.com


About Analysys (http://www.analysys.com)


Analysys, the global advisor in telecoms, IT and new media, works at the forefront of the communications revolution, delivering advice and insight to established and new entrant players. From offices in Cambridge, London, Glasgow, Madrid, Milan, Paris, San Francisco and Washington DC, over 170 Analysys staff provide strategy and systems consultancy, conferences, information services and start-up support to the companies that are creating the networked economy. Analysys Research reports, papers and online services provide authoritative coverage of this convergent industry, based on an unrivalled ability to fuse real-world experience, rigorous research and forward-looking analysis.


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* The Bandwidth Exchange: Herald of a New Carrier Age (August 2001)

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* Controlling the 3G Value Chain (July 2001)

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* Gigabit Ethernet: the solution to the MAN bandwidth bottleneck? (July 2001)

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* Back to Basics: New Entrant Carrier Strategies in a Bear Market (June 2001)

* Maximising Revenues through Advanced Service Provision: the survival strategy for European data centre operators (June 2001)

* IP Local Loop: Key Facts (April 2001)

* Business-to-Business Infrastructure Providers: Network Operators in Ecommerce (April 2001)

* Global IP Operators (February 2001)


Media contacts (for interviews, report summaries and author photography):


Martin Brooke
Martin Brooke Associates
Tel: +44 (0)1223 264050
Email: martin.brooke@dial.pipex.com


Natalie Dargan
Analysys Research
Tel: +44 (0) 1223 341300
Email: natalie.dargan@analysys.com

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