Analyze That: The Future of P2P
In this new feature, we’ll pose a pertinent question to a group of market analysts to give you a better sense of how the financial services sector perceives developments in the streaming media industry. Here’s this issue’s question:
Is P2P the future of video content delivery, or will traditional content delivery technology win out in the end?
P2P technology is the future of content delivery, but it will not totally supplant video broadcasting networks and technologies. P2P will ultimately become another tool to aid delivery of services by CDNs such as Akamai and content aggregators such as YouTube. It will also be used by terrestrial broadcasters (the BBC in the U.K. is already providing a prominent example) and by cable or telcos to augment broadcast programming with movie download services and live streaming of events to networked devices. Content owners and ISPs won’t let this happen without first getting a piece of the action, though.
—Jim Davis, senior analyst, networks and media, Tier1Research.com
P2P will find a niche within the traditional structure. The value proposition of using P2P to reduce networking costs is easy to understand, but the limitations of putting a P2P client in business environments is a real hurdle. In my view a hybrid model will emerge that balances the strengths of both architectures. We believe that content-focused data growth rates will remain in excess of 100% and an increasing amount of entertainment will be available via download. Concerns regarding a sustained CDN price war appear to be subsiding leaving opportunity for emerging P2P companies.
—David Eller, principal, Reuters
We believe that traditional content delivery methods will continue to be the primary method for content delivery as we believe most companies will want to utilize vendors that can guarantee uptime and the speed of delivery. Additionally, with CDN prices likely to continue to decline, price will likely become less of an issue. That said, we do believe there is an opportunity for P2P platforms in some form of hybrid model—Akamai’s acquisition of Red Swoosh is a good example of this.
—Aaron Kessler, senior research analyst, Piper Jaffray & Co.
The single best feature of P2P is its ability to reduce costs. However, because of its invasive manner, as well as the significant head start traditional CDN companies have, to assume P2P will replace traditional CDN technology is naive. Rather, we believe a hybrid model, which utilizes client- and network-based caching/mirroring technology is more likely, particularly as demand for high-bandwidth services such as IP HD take hold. Further strengthening our view, traditional CDN technology offers superior security and management capabilities, which are important requirements for delivering high quality/monetizable content.
—Colby Synesael, senior VP, equity research telecom and data services, Merriman Curhan Ford & Co.
P2P versus traditional network broadcast is not a winner-take-all debate. The starting point in understanding this is history: First, just like television did not kill off radio, P2P video delivery services like Joost will not kill off traditional broadcast but rather enhance consumers’ experience. P2P delivery potentially offers the consumer more Long Tail content, promotes the democratization of content creation and delivery, and provides content to more screens than traditional broadcast. All of this enhances, and only competes to a degree, with traditional broadcast.
—IdaRose Sylvester, senior research analyst, semiconductors group, IDC
P2P is an exceptionally efficient, cost-effective way to distribute rich-media content. And, in this analyst’s opinion, P2P does not enjoy the respect it deserves. However, P2P is not well-suited for limited distribution (it requires a certain critical mass to be effective) or on-demand content items. We believe that, over time, the majority of rich-media content will be distributed using a blended approach that leverages P2P as appropriate but falls back on traditional CDN-style delivery as required.
—Ira Weinstein, senior analyst and partner, Wainhouse Research