15 - Vanston Video and Broadband Forecasts in the Gigabit ... · 1/15/2016 · Angeles A stin...

Copyright © 2016 Technology Futures, Inc.

Copyright © 2016, Technology Futures, Inc. 1

Video and Broadband Forecasts in the Gigabit Era

Lawrence Vanston, Ph.D.President,Technology Futures, Inc.

TFI 2016

[email protected]


January 21-22, 2016

Marriott Courtyard DowntownAustin, Texas

13740 Research Blvd., Bldg. C-1 • Austin, Texas 78750 (512) 258-8898 • www.tfi.com


I d t B db d F tIndustry Broadband Forecasts


Broadband Generations, Data Rate Categories*

Nominal Range

1 5 Mb/ L h 3 Mb/1.5 Mb/s Less than 3 Mb/s

6 Mb/s At least 3 Mb/s and less than 10 Mb/s




VHSBroadband



300 Mb/s At least 300 Mb/s (Includes 1 Gb/s)

*These are based on downstream, but upstream is becoming important also.


Broadband Households by Nominal Data Rate

80%

90%

100%

ds

20%

30%

40%

50%

60%

70%

80%P

erce

nta

ge

of

Ho

use

ho

ld

1.5Mb/s

6 Mb/s24

Mb/s

50 Mb/s

All BroadbandHouseholds

Broadband A

ccess

100 Mb/s& Above


0%

10%

1995 2000 2005 2010 2015 2020 2025

P

Year Source: Technology Futures, Inc.

2014

Data Source: FCC. Data excludes mobile wireless broadband

Addi A th G tiAdding Another Generation



Trend in Residential Access Data Rates

50,000 100,000

300,000

1,000,000

100,000

1,000,000

s)

1.22.4

9.614.4

28.856.0

1,500

6,000

24,000

1

10

100

1,000

10,000

No

min

al D

ata

Ra

te (

Mb

/s

AnalogModems

Broadband

Performance Increases4 times every 4 years

(42% annually)

20B

roadband Access


0.3

01980 1985 1990 1995 2000 2005 2010 2015 2020

YearSource: Technology Futures, Inc.

014

Constant Percentage Rate of Advance

• Most new technologies progress this way

• Rates will continue if:– The improvement is technically possible– Basic approach remains the same– Demand, utility, need continue


From TFI’s Technology Forecasting Seminar


Broadband Households by Nominal Data Rate (Jan 2015 View)

80%

90%

100%

lds

50 Mbs& Above

100 Mbs& Above

10%

20%

30%

40%

50%

60%

70%

Pe

rce

nta

ge

of

Ho

use

ho

6 Mb/s& Above

24 Mb/s

1.5 Mb/s& Above

Broadband A

ccess

300 Mbs& Above

`


0%

10%

1995 2000 2005 2010 2015 2020 2025


2014 & Above


U.S. Broadband Lifecycles(Jan 2015 View)

80%

90%

100%

s

20%

30%

40%

50%

60%

70%

80%

Per

cen

tag

e o

f H

ou

seh

old

s

1.5Mb/s

6 Mb/s24

Mb/s

50 Mb/s


Broadband A

ccess

100Mb/s

300 Mb/s& Above


Lifecycle (t) = Substitution (t) – Next Substitution (t)

0%

10%

1995 2000 2005 2010 2015 2020 2025

P


2014



Resulting Average Data Rate(Jan 2015 View)

100.000s

) Growth Rate = 33%

0.100

1.000

10.000

Ave

rag

e D

ata

Ra

te (

Mb

/s

TrendLine

WeightedAverage

2B

roadband Access


0.0101995 2000 2005 2010 2015 2020

A


2014

Jan 2015 Caveat:

Caveat: The generations reflect historic trends in nominal bandwidth demand. Market forces may accelerate these without a corresponding acceleration in actual bandwidth requirements.

Example: 300 Mb/s & Above may include a lot of “pre mature” Gigabit!


include a lot of “pre-mature” Gigabit!


...According to Michael Render, principal analyst at market researcher RVA LLC, 83 Internet access providers have joined Google to offer gigabit Internet access service (all priced in the $50-$150 per month range)


range).

Render’s data shows that new subscribers are signing up at an annualized growth rate of 480 percent each year. Between the third quarter of 2014 and the second quarter of 2015 gigabit, subscribers grew from 40,000-174,000.

...All told, our enhanced service experience will impact 12 TWC service areas by this fall: New York City, Los Angeles A stin Dallas San Antonio Kansas CitAngeles, Austin, Dallas, San Antonio, Kansas City, Hawaii, Charlotte, Raleigh, Wilmington, Greensboro, and San Diego. The last three service areas begin TWC Maxx upgrades this year and should be completed in early 2016.

By year’s end approximately 45 percent of Time Warner


By year s end, approximately 45 percent of Time Warner Cable Internet customers nationwide will have access to TWC Maxx Internet speeds, up to 300 Mbps, and nearly 50 percent of all TV subscribers will have access to all-digital video.


Broadband Households by Nominal Data Rate (Jan 2016 View)

80%

90%

100%

ds

50 Mbs& Above

100 Mbs& Above

10%

20%

30%

40%

50%

60%

70%

Pe

rcen

tag

e o

f H

ou

se

ho

ld

6 Mb/s& Above

24 Mb/s

1.5 Mb/s& Above

Broadband A

cces

300 Mbs& Above

`


0%

10%

1995 2000 2005 2010 2015 2020 2025


2016s & Above


U.S. Broadband Lifecycles(Jan 2016 View)

80%

90%

100%

s

20%

30%

40%

50%

60%

70%

80%

Pe

rce

nta

ge

of

Ho

us

eho

lds

1.5Mb/s

6 Mb/s24

Mb/s

50 Mb/s


Broadband A

ccess

100Mb/s

300 Mb/s& Above


Lifecycle (t) = Substitution (t) – Next Substitution (t)

0%

10%

1995 2000 2005 2010 2015 2020 2025

P


2016



Resulting Average Data Rate(Jan 2016 View)

100.000) Growth Rate = 34%

0.100

1.000

10.000

Ave

rag

e D

ata

Ra

te (

Mb

/s)

TrendLine

WeightedAverage B

roadband Access


0.0101995 2000 2005 2010 2015 2020

A


2016s

AT&T today launched its gigabit fiber Internet service in parts of Los Angeles and West Palm Beach and announced another 36 metro areas that will get the service at later dates. AT&T's "GigaPower" service is available in 20 metro areas as of now... It launched first in Austin, Texas, in 2013.


...AT&T agreed to deploy fiber to at least 12.5 million customer locations within four years in exchange for government approval to buy DirecTV. ...AT&T will end up building to more than 14 million homes and small businesses.


Comcast has made a breakthrough that could enable it to offer gigabit-speed broadband to its existing network without going through the exhaustive, and expensive, process of building out a new fiber network. Through this process, Comcast said it will offer a new i bit d i b th d f 2016


gigabit-speed service by the end of 2016.

The DOCSIS standard increases the amount of data that can be transferred over existing cable TV systems, with version 3.1 capable of boosting speed to 10 Gigabit-per-second (Gbps) downstream and 1 Gbps upstream.

Th Gi bit b tit tiThe Gigabit substitution curve may very closely follow the 300 Mb/s curve



Broadband Households by Nominal Data Rate (Jan 2016 View ???)

80%

90%

100%

lds

50 Mbs& Above

100 Mbs& Above

300 Mbs& Above

10%

20%

30%

40%

50%

60%

70%

Per

ce

nta

ge

of

Ho

us

eho

6 Mb/s& Above

24 Mb/s

1.5 Mb/s& Above

Broadband A

ccess

`

1 Gbs& Above???


0%

0%

1995 2000 2005 2010 2015 2020 2025


2016


???

Comparative Broadband Statistics as a Political Weaponexcerpted from:



Key Players

• The Service Providers (Cable TV and Telcos)Telcos)

• The Application Providers (Google, Netflix, Facebook, etc.)

• The Federal Communications Commission (FCC)


• Consumers

Highspeed and Standard Coverage by Technology - 2012


Source: FCC, Fourth International Broadband Data Report (2015), https://www.fcc.gov/document/fourth-international-broadband-data-report-2015


Total Highspeed Broadband Coverage by Country, Dec 2012



“Highspeed” = 25 Mb/s (U.S.)= 30 Mb/s (Europe)

Rural Highspeed Broadband Coverage by Country, Dec 2012




Highspeed BroadbandCoverage, Europe2012 Data

Source: FCC, Fourth International Broadband Data Report (2015), https://www.fcc.gov/document/fourth

2012 Data


cument/fourth-international-broadband-data-report-2015

Highspeed Broadband Coverage, U.S.2012 Data




Average (Weighted)Actual DownloadSpeeds,Based onOokla data.


Connection Speeds by Country, Akami, 4Q13


Akamai’s State of the Internet: Q4 2013 Report


Connection Speeds by Country, Akami, 4Q14

Copyright © 2016, Technology Futures, Inc. 31Akamai’s State of the Internet: Q4 2014 Report

Are these comparisons meaningful?

• Most countries “ahead” of U.S. are not comparable. Most are small, dense, and/or wealthy Others have unique characteristicswealthy. Others have unique characteristics.

• Not clear that the differences imply significant competitive advantage

Similar comparisons by city, by price, etc. are also questionable


also questionable

Yet loud rhetoric and major U.S. policy decisions are revolving around them


O li Vid F tOnline Video Forecasts


Netflix Streaming Members, Domestic

80%

90%

100%

old

s

20%

30%

40%

50%

60%

70%

Pe

rce

nta

ge

of

Ho

us

eho

On

line

Vid

eo

Netflix Streaming Members


0%

10%

2010 2015 2020 2025


2016

Historical data source: Netflix


Online Video Minutes, Percent of Total TV Viewing (Scale to 10%)

8%

9%

10%

2%

3%

4%

5%

6%

7%

8%

Pe

rcen

tag

e o

f T

V M

inu

tes

Intern

et TV

20OTT Minutes


0%

1%

2005 2010 2015 2020 2025


016(OTT Users Only)

Historical Data Source: Nielsen

Online Video Minutes, Percent of Total TV Viewing (Full Scale)

90%

100%

20%

30%

40%

50%

60%

70%

80%

Per

cen

tag

e o

f T

V M

inu

tes

Intern

et TVOTT Minutes


0%

10%

2005 2010 2015 2020 2025


V2016

(OTT Users Only)



Online Video Minutes vs Traditional Total TV Minutes

10000

12000MINIMAL CORD CUTTING SCENARIO

2000

4000

6000

8000

10000

es

per

Mo

nth

per

TV

Vie

wer

Inte

rnet T

VTraditional TV

Minutes

Total TV Minutes


02005 2010 2015 2020 2025 2030

Min

ute


2015OTT Minutes


HDTV Households

80%

90%

100%

old

s

10%

20%

30%

40%

50%

60%

70%

Per

cen

tag

e o

f H

ou

seh

o

HD

TV

2

HDTVHouseholds


0%

10%

2000 2005 2010 2015 2020


2016

Historical data sources:2001-2004 Misc, 2005-2015 Leichtman Research


In 2014, only 1% of all U.S homes had a 4K TV, so far in 2015, that percentage is seeing very fast growth and other studies have predicted a fivefold increase in 4K television sales for the current years end, from just under 1 million units sold to about 5 or 6 million by the end of 2015.

The Strategy Analytics study furthermore predicts a 10% market


The Strategy Analytics study furthermore predicts a 10% market penetration by 2016. While all of these figures are quite impressive, they’re still some distance from the 50% penetration predicted for 2020.

Ultra-HD Households (aka 4K)

70%

80%

90%

100%

old

s

10%

20%

30%

40%

50%

60%

70%

Per

cen

tag

e o

f H

ou

seh

o

HDTVHouseholds

Ultra-HDTVHouseholds

HD

TV

2

HDTVAnalogous

Rate

PublishedForecasts


UHDTV Data Source (Red Squares): Strategy Analytics

0%2000 2005 2010 2015 2020 2025 2030

YearSource: Technology Futures, Inc.Source: Technology Futures, Inc.

216

Historical data sources: 2001-2004 Misc, 2005-2015 Leichtman Research

15 - Vanston Video and Broadband Forecasts in the Gigabit ... · 1/15/2016 · Angeles A stin...

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