Cisco released a report this week forecasting how much Internet traffic will grow over the next five years and where that traffic will come from. Some of the key findings and predictions:
- The Internet is not collapsing from streaming video, although traffic is expected to grow at 35% a year, mostly due on-line video and peer-to-peer file exchange, and the growth may not be evenly distributed.
- YouTube alone represented 4% of US traffic by the end of 2006.
- Pre-recorded Video content is 11% of consumer traffic worldwide, 18% in North America.
- Video communications will dwarf everything, although this probably won't happen until 2015.
- Total IP traffic will double every two years.
- Consumer traffic will surpass business traffic in 2008.
- Internet video-to-PC will grow by 10x in the next 5 years. By 2011 reaching the equivalent of 250 million DVDs each month.
One of the more interesting conclusions of the report is that, contrary to the conventional wisdom that "content is king," that the more powerful driver is the combination of communications and content. The social aspect of YouTube accomplished something that many pundits had dismissed: getting people to watch low-quality video on a small screen. Traditional television may be less desirable than video that can be shared, tagged, mashed up, and discussed, with the result that the PC may continue to be an attractive alternative to the big screen TV for a lot of content.
Cisco believes that video-related Internet traffic will come in three waves:
- Video viewed on the PC. This was 8% of IP traffic in 2006, not including P2P file sharing.
- Video to the TV set-top box. With HDTV, this could be huge. Three hours of HD a week would be 27 GB per month - a point that today would be lableled a "bandwidth hog" and kicked off the network.
- Video Communications. Perhaps the most controversial projection is that PC-based video calling will succeed where the videophone has not. If this happens, by 2015 it could be the largest consumer of bandwidth, since it is generated by millions of individuals and, being real-time, can not be cached.
For the most part, the core of the Internet is not likely to be a major source of bottlenecks. However, consumers are not accustomed to paying a lot for video bits. The report contrasts the $0.0001 a consumer will pay for a megabyte of video to the $20.00 they will pay for an SMS message. Also, the rerport states in several places that it's estimates may be conservative and that if services such as Joost catch on, bandwidth could grow a lot faster than projected, which does raise the issue of how the service providers will finance all that Cisco gear they need to purchase.
The White Paper summarizing the report is available here.
The methodology is in a paper Global IP Traffic Forecast 2006-2011.
A useful site to find similar papers from Cisco is here.
Updated 17 August 2007 to provide Cisco links.