Posted by: Tom Nolle
Cisco, Online advertising, Routers, Video
Cisco has again indicated that what it calls “ambient video” (meaning user-generated content) is going to put enormous demands on the network of the future. But like the political process, Cisco is light on realistic solutions to the problem.
Sure, you can argue that to fix traffic congestion you buy routers (a logical strategy for a router vendor to propose) but the real problem again isn’t what it appears to be on the surface. We need to know how to pay for the routers, and ambient video has the smallest monetization potential of all types of video because nobody is prepared to spend much to advertise in that kind of material.
Our research says that only about 0.04% of all the video uploaded by consumers has any potential for ad monetization, and even with that, there’s the question of how the ad money ever flows to the network operator to pay for those routers.
Absent a solution, the only near-term measure operators can adopt is to put price pressure on the gear to improve ROI even when the “R” part isn’t growing.