The ATLAS Internet Observatory report has some excellent observations, some of which are quoted below:
- As category, CDNs represent close to 10% of Internet traffic
- Web (and video over HTTP) largest and faster growing
- Followed by P2P (which is also fastest shrinking)
- P2P increasingly eclipsed by streaming
The salient points are that streaming is the fastest growing traffic by volume, CDNs now represent about 10% of all Internet traffic, and that P2P is declining. Some of the decline of P2P can be attributed to the fact that P2P clients are now better at masquerading, encryption and localization, but the overall trend as measured by DPI techniques is still downwards. P2P has been declining while CDN and streaming media traffic, most of which is micropayment driven – either directly with money like Apples iTunes store, or with attention like Pandora and YouTube – has been rising. I think it makes it clear that “now” is more important than “free.”
Trying to set up P2P is a non-trivial exercise involving firewall and home gateway modifications for port forwarding, tracker location, content hunting and so on . Centralized media delivery on the other hand is merely a click away – and if I have to pay 99 cents for a song, that doesn’t seem all that expensive.
In his thought provoking presentation at Infocom 2009, Dr. Andrew Odlyzko makes a key point: The function of data networks is to satisfy human impatience, and human impatience is infinite. Andrew also points out some classic telecom dogmas (slide 6):
- Carriers can develop innovative new services
- Content is king
- Voice is passe
- Streaming real-time multimedia traffic will dominate
- There is an urgent need for new “killer apps”
I’ve been beating that drum for a while, especially the fact that carriers can’t develop innovative new services – they don’t have the DNA to do so (see my posts here and here) and that content is not king – connectivity is the real value. The great success story of the past few years in telecom space has been wireless and again, Andrew points out that the telecoms learned the wrong lessons. Paraphrasing Andrew: “The prevailing industry view is that profits resulted from tight control of wireless while losses resulted from the wild and uncontrolled Internet while in reality success came from providing mobility for voice and simple text messaging.” I believe success was an direct outgrowth of convenience and “now.” I can get much cheaper rates on a per-minute basis using a land line, but having the ability to connect to people where and when I want is the true value of mobile. I am once again, trading convenience for money. Micropayments for convenient minutes to put it another way.
Ideally, things would be available now and for free, but given the trade-off space, I am willing to trade some money for immediacy. Therein lies a lesson.