In the DataCenter - ISP's and Video Stream Revenues

A debate recently arose among the datacenter staff. The oldsters think the cost per stream is more than the value per stream right now, because the cost of media is high and everyone looks at things single (one at a time). But the youngsters have noticed that a lot of new content creators are coming online wanting lower cost deployment of media, and some even lower the production time/cost itself through use of services like ExecProducer. They worry that the value per stream is eroding fast, and that's a lot of ISP's bread and butter.

So even if the value per stream is currently high, as you increase the number of media creators, what does it do to the revenues of the service providers? Does it increase their value per stream?

I asked Dan Kusnetzky, Program Vice President, System Software at IDC what he thought of the vanishing value per video stream debate. And here's what he told me...

Dan: "Cost reduction strategies show up again and again as one of the leading concerns of IT management right now. Higher than that, however, is a need to make IT support the business function. Where these two come into conflict, I would suspect that business value would win out over cost reduction. After all, if something you're doing produces enough revenue to the organization, isn't it worth doing?"

Lynne: "Some of the younger ones think that you can cleverly schedule it around, to not increase value, but I think that's just too complicated to try. Also, I've noticed they're always doing multiple activities per stream
already (IM, video, email, games, and a little actual work...). I told them %25 of 18-34 age group watches videos, but only %1 creates them (lower than weblogs), because the time it takes to do a video is about 2-4 weeks manually. With automation, it's looking like it increases immediately to %10 right off, and they produce multiple content, which in turn is reradiated (watching the video logs of course). From my logs, it looks like a 10x increase saturates and drives bandwidth immediately and it's not just one-to-many but many-to-many (to use my topology here), so maybe the oldsters are correct?"

Dan: "I don't think that there's a single blanket answer to this. Has anyone analyzed the revenue produced per stream, what times those streams are viewed and the cost of producing and distributing each stream to see if there is a way to maximize revenues without also upsetting viewers? While I think that there just may be a way to optimize this, I'm not at all sure that going to this effort would produce enough benefits to be worthwhile. I'm a supporter of the "keep it simple" school of management.

I'm also a supporter of the 'let's make sure we're doing the right thing' school. As some wise person once said 'Doing the wrong thing, no matter how efficiently or well, is still doing the wrong thing.' "

Lynne: "We're just tech guys and gals here, watching the logs, but we do see the combinatorial nature of the interaction in serving usage, and we also watch the traffic and other monitoring. So we do see an effect. It's just - what does it mean in terms of driving bandwidth and value per stream for the service provider?"

Dan: "I'm just a reformed software engineer myself. As I became a business manager and analyst, I started to see business as a system and use the same input, process, output view of business processes. A great deal of the time, that type of analysis produces useful results. I had to learn that how people felt about a system was also valid input. If people don't like something, they won't use it no matter how well engineered it is.