Internet TV: Implications for the long distance network
A. M. Odlyzko
AT&T Labs - Research
amo@research.att.com
http://www.research.att.com/~amo
Revised version, July 27, 2001
Abstract:
The migration of traditional TV to the Internet is likely to have
little impact on the long distance network. The main reason is that
consumers still take on the order of a decade to embrace new
technologies (such as cell phones) or even improved variants of old
media (as with CDs replacing vinyl records). Hence we should not
expect traditional broadcast TV to change substantially or to migrate
to new modes of distribution any time soon. Yet within much less than
a decade, progress in photonics will produce an increase in the
capacity of Internet backbones far beyond that required to carry all
the broadcast TV signals. There will continue to be bottlenecks in
the "last mile" that will limit the migration of TV to the Internet
(and this will reinforce the natural inertia of the consumer market).
However, the backbones are unlikely to be an impediment.
The Internet is likely to have a a much larger impact on TV than TV
will have on Internet backbones. There is vastly more storage than
transmission capacity, and this is likely to continue. Together with
the the requirements of mobility, and the need to satisfy human
desires for convenience and instant gratification, this is likely to
induce a migration towards a store-and-replay model, away from the
current real-time streaming model of the broadcast world. Further,
HDTV may finally get a chance to come into widespread use. The
flexibility of the Internet is its biggest advantage, and will allow
for continued experimentation with novel services.
1. Introduction
The thesis of this paper is that traditional concerns about the impact
of TV on the long distance links in the Internet are unjustified. The
convergence of TV and the Internet is likely to be slower and take a
path different from the one normally envisioned.
There are various definitions of Internet TV. (See [Egan, Noll4,
Noll5, Owen].) The precise one does not matter much for our purposes,
though.
Data networks developed rapidly largely because they could use the
huge existing infrastructure of the telephone network. Without all
the investments made to provide voice services, long distance data
transmission would have grown much more slowly. As it is, growth has
been fast, although not as fast as is commonly believed. The
bandwidth of data networks in the U.S. already exceeds that of voice
networks (see Section 2 for more details). Sometime in 2001 or 2002,
the volume of data transmitted on data networks will exceed that of
voice. (See [CoffmanO3] for the historical growth rates of different
types of data and non-data traffic, and of predictions of when data
would exceed voice.)
In spite of all the publicity it has attracted in the late 1990s,
packetized voice is still a tiny fraction of Internet backbone
traffic. This is not likely to change, even as a greater fraction of
voice is sent over the Internet. The reason is the far higher growth
rate of data traffic than of voice calling, about 100% versus under
10% per year. Even today, to move all current voice traffic to the
Internet would require much less than a doubling of the Internet's
capacity. Although there are still more bytes of voice traffic than
of Internet traffic, packetization of voice naturally lends itself to
compression. Hence if voice traffic were to move to the Internet, the
volume of packet traffic that would result would be far smaller than
current data traffic.
The general conclusion is that the volume of voice calls is not going
to overwhelm the Internet. (There are quality issues as well that
matter, but we will not deal with those here.) Historically, though,
data networks have developed in the shadow of the telephone network.
Not only have data networks relied on the infrastructure of voice
telephony, but their development was strongly influenced by the
prospect that eventually they would carry voice. Since the telephone
network was so much larger than the data networks, the quality
requirements for voice transmission played a major role in the
planning of data transmission technologies. Right now, it is
increasingly realized that voice will not be a large part of the
traffic in the future, simply because there is too much data. On the
other hand, video is now playing a similar role to the one voice used
to play. The volume of TV transmissions is so large that the
requirements of real time streaming video dominate planning for the
future of the Internet. However, that is also likely to turn out a
mistake. By the time TV moves to the Internet, data traffic will
likely to be so large that streaming video will not dominate it.
Moreover, the video traffic on the Internet is likely to be primarily
in the form of file transfers, not streaming real time transmission.
The above contrarian predictions are based on a study of rates of
change in different fields. Storage, processing, display, and
transmission technologies are advancing at rather regular and
predictable rates. This is considered in sections 2 and 3.
(``Moore's Law'' for semiconductors is only the most famous of the
various ``laws'' that govern progress.) In addition, rates at which
new technologies are adopted by society, while not as regular, are
almost universally much slower than is commonly supposed. (``Internet
time'' is a myth.) This is discussed at greater length in Section 4.
As a result we can have some confidence in expecting that by the time
TV moves to the Internet in a noticeable way, the latter will have
huge capacity, at least on the long distance links.
The prediction that the predominant mode of video transmission on the
Internet is likely to be through file transfers is justified briefly
in Section 5. Section 6, the conluding one, is devoted to what
appears to be the most likely impact of the Internet on TV, namely in
providing greater flexibility that will encourage exploration of
technologies such as HDTV.
2. Network sizes and growth rates
The paper [CoffmanO1] pointed out that already by the end of 1997, the
bandwidth of long distance data networks in the U.S. was comparable to
that of the voice network, with the public Internet a small fraction
of the total. Today, the Internet is by far the largest in terms of
bandwidth. However, because bandwidth is hard to measure and changes
irregularly, due to the lumpy nature of network capacity as well as
the financial climate, it is hard to estimate it precisely. Table 2.1
presents the estimate from [CoffmanO2] of the traffic (in terabytes,
units of 10^12 bytes, per month). The key point, discussed in great
detail in [CoffmanO1, CoffmanO2] is that Internet traffic is growing
at about 100% per year. That is the growth rate the Internet
experienced during the early 1990s. There was then a brief period of
two years, 1995 and 1996, when growth was at the ``doubling every
three or four months'' rate that is usually mentioned. Starting in
1997, though, growth again slowed down to doubling each year. At this
rate, by some time in 2001 or 2002, there will be more data than voice
traffic in the U.S., as predicted in [CoffmanO1].
Table 2.1. Traffic on U.S. long distance networks, year-end 2000.
network traffic (TB/month)
US voice 53,000
Internet 20,000 - 35,000
other public data networks 3,000
private line 6,000 - 11,000
Further, technology advances in transmission and switching appear to
offer the prospects of traffic growing at about 100% a year through
the year 2010 without astronomical increases in spending. Even if we
only have growth by a cumulative factor of 100 over the first decade
of the 21st century (as opposed to a factor of 1024 that results from
a doubling each year), we will have around 3,000,000 TB per month of
traffic by the end of 2010, or around 10 GB per person per month. Now
a 90-minute movie, digitized for high resolution at 10 Mb/s, comes to
about 7 GB, so we would be able to transmit only about two movies per
person (counting all men, women, and children) per month in that
format. However, if we lower the resolution to 2 Mb/s, and assume
traffic continues doubling each year, we find that by 2010 we could
send 100 movies per person per month. Thus the general conclusion is
that by 2010 or soon thereafter, the long distance Internet backbone
could transmit all the entertainment TV signals that are likely to be
demanded.
Another way to consider the problem of the transportation task imposed
by TV is by considering capacities of fibers. If we give each of the
approximately 300 million inhabitants of the U.S. a 10 Mb/s traffic
stream, we find that the total demand is for 3,000 Tb/s of
transmission capacity. The DWDM (Dense Wavelength Division
Multiplexing) technologies that are widely deployed
typically reach about 0.8 Tb/s per fiber strand, but there are good
prospects of reaching 10 Tb/s in a few years, and there are even hopes
of achieving 100 Tb/s. If we assume conservatively that 10 Tb/s
capacity per fiber will be widely deployed by 2010, it would require
just 300 strands to provide the 3,000 Tb/s of capacity that the 10
Mb/s traffic stream per person involves. (Actually, we would need
double that for two directions of traffic, plus other small multiplier
factors to provide for redundancy, etc., but those are not huge
factors.) Today, we have several hundred strands of fiber running
from coast to coast, and many empty conduits that could be filled with
additional fiber. Thus as far as fiber itself is concerned, there
will be plenty of capacity.
Most of the fiber that is in place in the long distance networks is
not utilized (``lit'' in industry language), and even when it is in
use, it is often used at a small fraction of its capacity. The reason
is that there is not enough demand to create more usable capacity,
certainly not even at the prices of 2001 (which are much lower than
they were just a couple of years ago). (The fiber glut we are
experiencing resulted from an assumption that there was an insatiable
demand for bandwidth. It ignored three key factors: (i) lack of
``last mile'' connectivity, (ii) the cost to provide usable bandwidth,
as opposed to raw fiber, and, perhaps most important, (iii) that
traffic demand is growing at only about 100% per year, even in the
absence of bandwidth constraints, gated more by rate of adoption of
new applications than anything else.)
The general conclusion is that there already is enough fiber to allow
for transmission of individual TV signals over the long distance
Internet backbones, and that sometime around the year 2010,
transmission and switching technologies are likely to allow for this
to be done economically. The question is, will we want to do that?
The volume of unique TV content is simply not all that large, as is
shown in [Lesk, LymanV]. Given the trends in storage capacity
mentioned below, it is feasible to store copies of all the non-real
time material (which is the overwhelming bulk of what TV transmits) on
multiple local servers, and avoid burdening the backbones with it.
3. Moore's laws (technology trends)
In the previous section, there was an implicit assumption, namely that
the highest resolution video signals that would be typical by 2010
would be no more than 10 Mb/s. Today, on digital cable TV systems,
typical transmission rates are around 2 Mb/s, and HDTV signals tend to
be compressed to somewhat below 10 Mb/s. We can certainly expect
increases in resolution of video signals. (Movies are filmed at over
1 Gb/s, and stored as such.) However, these increases are likely to
be modest. (Note that TV resolution has not changed in over 50 years,
and HDTV and other forms of enhanced display technologies have been
making slight progress, a point to be considered further later.)
In general, technological prognostications have a miserable track
record. The one area where they have been outstandingly successful,
though, has been in forecasting continuation of various types of laws
similar to the ``Moore's Law'' of semiconductors, which says that the
number of transistors on a chip doubles every 18 months. (See
[Schaller] for the history and fuller description. The basic law is
often reported as stating that processor power doubling every 18
months, which is not quite right, but reasonably close.) The key
point, discussed at greater length in [CoffmanO2], is that the
different Moore's laws for different areas operate at different
speeds. Display resolution is improving slowly (and battery capacity
even more slowly), while transmission and magnetic storage capacity
are growing even faster than processor power. Table 3.1, taken from
[CoffmanO2], shows the growth in the volume of hard disk storage that
is shipped each year. It is about doubling annually, comparable to
the rate at which transmission capacity is growing.
Table 3.1. Worldwide hard disk drive market. (Based on Sept. 1998
and Aug. 2000 IDC reports.)
year revenues (billions) storage capacity (terabytes)
1995 $21.593 76,243
1996 24.655 147,200
1997 27.339 334,791
1998 26.969 695,140
1999 29.143 1,463,109
2000 32.519 3,222,153
2001 36.219 7,239,972
2002 40.683 15,424,824
2003 30,239,756
2004 56,558,700
The rapid growth of storage capacity is significant, since it makes
non-streaming modes of operation much more attractive. Back in the
1980s and 1990s, disk storage available on PCs in households was so
small that streaming real time delivery of video was the only feasible
alternative. Today, local storage is becoming viable even for high
resolution movies. (Note the estimate of 7 GB for a single HDTV
movie, versus a capacity of 80 GB that often comes with high-end PCs
in mid-2001, and the likelihood that this will reach 1 TB around the
year 2005). As time goes on, and the disk capacity grows rapidly,
while digital movie sizes grow slowly, the attractions of local
storage will only increase.
4. Rates of change, technological and sociological
We hear constantly how we live on ``Internet time,'' and how the
Internet changes everything. Yet ``Internet time'' is a myth. The
pace at which new products and services are adopted is not notably
faster than it used to be in the past. This contrarian view is
considered in greater detail in [Odlyzko2]. Since it is so contarian,
though, I devote some space here to justifying it (and presenting more
examples).
There are frequently cited graphs showing faster diffusion of new
technologies today than a century ago, say, such as those in [CoxA].
However, those comparisons have to be treated with caution. Yes, the
telephone, the automobile, and electricity did spread slowly, but then
each had to build its own extensive infrastructure, and each one was
very expensive in its first few decades. The Internet could take
advantage of the existing telephone network to grow, and yet even the
Internet did not really grow on ``Internet time,'' since its origins
go back to the Arpanet, which was put into operation in 1969. For
successful new consumer products or services that do not require large
investments, a decade appears to be about the length of time it takes
for wide penetration. This has been noted a long time ago.
A modern maxim says: ``People tend to overestimate what can be
done in one year and to underestimate what can be done in five
or ten years.''
(footnote on p. 17 of [Licklider])
Arthur C. Clarke, the science fiction writer, is said to have
similarly claimed that people tend to overestimate the short term
impact of new technologies and to underestimate the long term impact.
Color TV took about a decade to reach 75% of the households in the
U.S. It is not much different today. The paper [Odlyzko2] presents
statistics on sales of recorded music in the U.S. by format. Music
CDs are much better than vinyl LPs (at least for 99% of the
population, as it has to be admitted that there is a small but
influential segment that insists on the superiority of the older
medium), yet it took them around a decade to attain dominance. Cell
phones are all the rage, but they have been around since the middle
1980s, and yet by the end of 2000 were used by just about 40% of the
population of the U.S.
The standard example of how things do move on ``Internet time'' is the
browser. It did attain dominance in providing online access in well
under two years. But that is just about the only such example of
rapid change! Even on the Internet, technologies such as IPv6 and
HTTP1.1 have been talked about as the ``next big thing'' for about
half a dozen years, and are not yet dominant. Amazon.com did
revolutionize retailing. However, it took quite a while, since it was
established in November 1994, and 6 years later it had not yet taken
even 10% of the U.S. book market. (Whether Amazon.com is viable in
the long run or just an outstanding example of the ``irrational
exuberance'' of the financial markets is another story.)
Much of the dot-com bubble appears to have been due to the
expectations that the world was changing on Internet time. For
example, in the middle of 2001, just before Webvan closed down, its
new CEO was quoted as saying ``We made the assumption that capital was
endless, and demand was endless.'' The idea of deliveries to the home
may yet find a market and lead to financial success. However, Webvan
was acting under the assumption that they had to build a giant
distribution network in a year or two, or else somebody else would.
Instead, when demand was slow to materialize, they went bankrupt.
The entertainment area is full of examples of slow changes. The paper
[Galbi] provides interesting statistics on a variety of subjects.
Some of the most relevant for our purpose have to do with the slow
rate at which people reallocate their time. For example, reading went
from 4 hours per week to 3 hours, but it took from 1965 to 1995 to
accomplish this.
More examples of slow consumer adoption rates are appearing all the
time. For example, personal video recorders, such as TiVo and
ReplayTV, have so far failed to take off, even though their users
praise them highly [Hamilton].
The general conclusion is that we should not expect to see much change
in consumer behavior as far as entertainment is concerned, at least
not in less than 10 years. In particular, TV is likely to retain its
format, and be delivered through TV sets, not PCs. In the meantime,
the backbones of the Internet will be growing, to the stage where they
will be capable of delivering all the TV content as separate streams
for individual users even from a single central location. Since that
mode of delivery is irrationally inefficient, it is unlikely to be
employed, and so TV signals will not fill much of the Internet
pipelines.
5. Streaming media versus store-and-replay
If Internet traffic continues doubling each year, where will the
increases come from? There are some speculations in [CoffmanO2].
Video is likely to play an increasing role, taking over as a major
driver of traffic growth from music (which got a large boost from
Napster). However, this video is likely to be in the form of file
transfers, not streaming real time traffic. There are more detailed
arguments in [CoffmanO2], but the basic argument is that video will
follow the example of Napster (or MP3, to be more precise), which is
delivered primarily as files for local storage and replay, and not in
streaming form. This local storage and replay model been known as a
possibility for a long time, cf. [Owen]. It has several advantages.
It can be deployed easily (no need to wait for the whole Internet to
be upgraded to provide high quality transmission). It also allows for
faster than real time transmission when networks acquire sufficient
bandwidth. (This will allow for sampling and for easy transfer to
portable storage units.)
The prediction that streaming multimedia traffic will not dominate the
Internet has been made before, in [Odlyzko4, StArnaud]. It fits in
well with the abundance of local storage we are increasingly
experiencing.
6. Conclusions
The general conclusion is that the long distance Internet backbones
are not going to be affected much by TV. Local ``last mile''
bottlenecks in data networks, as well as the slow adoption rates of
new technologies by consumers, will ensure that by the time true
convergence takes place between the Internet and entertainment TV,
something on the order of a decade will have gone by. By that point,
the backbones will have more than enough capacity to handle TV
transmission. Even though it may be wasteful, it may then very well
be less expensive to handle everything over the Internet, to avoid
having several separate networks.
The Internet may very well have a larger impact on TV than TV will
have on the Internet. The main advantage of the Internet has always
been its flexibility, not its low cost. (See the discussions in
[CoffmanO3, Odlyzko4].) The broadcast model, in which people have to
adjust their schedules to fit those set by network executives was an
unnatural one, forced by the limitations of the available technology.
The popularity of video tape rentals showed that people preferred
flexibility. Similarly, when cable TV operators chose to offer more
channels as opposed to higher resolution channels, they were
presumably responding to what they saw as their customers' desires for
variety.
The Internet will offer even more flexibility, but its impact is
unlikely to be very rapid. Its main effect may be on high resolution
video. HDTV has made practically no inroads because of the usual
chicken-and-egg syndrome. Sets are expensive since there is no mass
market, people do not buy sets since they are expensive and their is
nothing novel to watch, stations do not carry HDTV programming since
there is no audience, and so on. Internet allows for marketing to
small groups. Studios already are making high resolution digital
version of movies, and over the Internet will be able to reach the
initially small groups of fans willing to pay extra for them. (This
too will take time, not least because of fears of piracy.)
Experiments with novel modes of presentation will also get a boost.
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