Yesterday I ordered a new server from our ISP, as I do pretty regularly. I happened to take a look at the “bandwidth” dropdown on their order form, and you can now get a Gigabit of unmetered internet bandwidth to your server for £3000/month.
This got me thinking. What on earth would I do with all that bandwidth? Well, serving video is the obvious application. Lets try live TV, something exciting, maybe sport. If you don’t do anything clever at all, just ship data to every individual person who wants to watch TV, how much would it cost? Say you need 10Mb per person for the video stream.
£3000/month is £4.30/hr for a Gigabit. For this you can serve 100 people their TV. So, 4.3p/hr/person for a video stream. Reckon you could make 4.3p / person / hour from advertising on a live sports channel? I reckon so. So why not do it right now? Two reasons. People don’t have the Internet on their TV, and bandwidth isn’t enough of a commodity. If I wanted to broadcast the FA Cup Final to 500M people, I’d need around 5 Exabits of bandwidth, just for a couple of hours. The market just isn’t there for me to buy it like that. Yet. But it will be – it’s the direction the industry has been moving in, at vast speed, and there’s no reason to think it’ll stop.
Give it a few years. Imagine a day, not that far off, when everyone’s TV is on the Internet. I, personally, could bid to broadcast the Cup Final on the basis that I need to make, say, 25p per person in advertising. Obviously I don’t own any cameras. Or Gary Lineker. But both of those are available for hire, at the right price.
I’m not proposing to go into the sports broadcasting business myself, but the effects of bandwidth commoditisation are going to be felt very soon in the TV business, and they are woefully unprepared for it. Commoditisation lowers barriers to entry and lowers the cost of innovation. Right now anyone betting on their TV channel keeping audience just because they’ve already got them is betting against Moore’s Law. And a bet against Moore’s Law is a very, very bad bet.