DSL TV is coming, says market research firm ABI. ABI's report, “The Rise of Broadband Video,” predicts accelerating DSL adoption rates accompanied by the rollout of digital movie distribution networks, creating a $6 billion market for PC-to-TV bridges, as well as growth in other device segments where Linux is popular.

DSL adoption rate accelerates

Currently, 23 percent of North American households enjoy broadband Internet access, a figure expected to reach 65 percent by 2009, according to ABI Director of Broadband and Residential Entertainment Vamsi Sistla.

North American broadband households currently number 26 million, with 10 percent quarterly growth. Service fees are expected to decline 20 to 24 percent during the next six to nine months, prompting an increase in the quarterly broadband growth rate to between 14 to 18 percent.

“While the penetration is growing, high upload and download data rates, quality of service, and high security will also become the norm in the industry. With high bandwidth available to the mass consumer, services that need high bandwidth will also start to proliferate. Multimedia and on demand video delivery services will start to gain in popularity,” says Sistla.

Many film studios and broadcasters already provide streaming and downloadable content, which Sistla attributes to a proactive move to combat digital piracy more effectively than the music industry has managed to do. “By setting up legal copying outlets, Hollywood will be in a better situation to take action against those who break the copyright laws,” Sistla says.

Movie houses are also encouraged to move to digital distribution by the success of Apple iTunes and other music distribution services, according to Sistla.

Regions with successful cable and satellite TV industries will be slower to embrace broadband movie distribution, Sislta says, while countries with lower cable/satellite penetration are already rolling out DSL TV services.

Broadband video services create new and more integrated device types

Downloadable movie content will create a demand for PC-to-TV bridges, Sistla says, a new class of devices expected to generate $300 million by the end of 2004, and grow from there. “[Revenue] will grow by three times in next two years, peaking in 2006 with over $6 billion at a very moderate forecast, worldwide,” Sistla says.

Sistla also sees opportunities for more traditional multimedia devices, which will gain in functionality. “Entertainment and Broadband Media Centers and IP STBs [IP set-top boxes] will start to merge categories in the next few years, raking in over $18 billion in the year 2008, worldwide,” Sistla said.

ABI notes that consumers are already starting to see a proliferation of multimedia computing devices, as well as Internet-based movie distribution companies such as NetFlix. “Now watch out for broadband video, which is right around the corner, [and which] could pose a bigger threat to the prevailing video distribution landscape,” Sistla says.

Sistla, concludes, “Obviously there [are] initial shortcomings compared to cable or DBS. They won't be able to offer high definition quality content, for example: the data rate isn't high enough, and the compression isn't at that level. But in future, xDSL and Fiber or some combination of both could be a very viable candidate to offer an HD stream just like cable or satellite.”

More information about ABI's market research report is available here.

 
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