DALLAS, TX — By 2012, nearly 33 million U.S. households will have broadband service with speeds of 10 Mbps or higher and capable of streaming high-definition video, according to a report released Tuesday by market research firm Parks Associates. “North American Broadband Market Update” notes that at year-end 2007, 5.7 million, or 9-percent of U.S. broadband households, had such speeds.“Until recently, telecom operators’ aggressive deployment of deep fiber services and the competitive reaction from cable [multiple service operators] fueled the growth of high-bandwidth broadband services,” said Yuanzhe (Michael) Cai, Parks Associates’ director of broadband and gaming. “As consumer excitement over pure bandwidth subsides, however, service providers will have to deliver appealing, bandwidth-intensive, value-added services such as [high-definition] video streaming and content place-shifting in order to retain customers and increase [average revenue per user].”
Investment in new broadband technologies such as fiber to the end user and Data Over Cable Service Interface Specifications 3.0 and the growing breadth of broadband entertainment content are key market drivers, according to the report. However, service providers’ missteps in bandwidth management practices, uncertainty around “network neutrality,” and the contentious relationship between facility-based broadband service providers and over-the-top internet companies may slow progress.
“If high-bandwidth broadband services fail to reach mass-market consumers, the United States may lose its competitive edge in the next round of technology innovation,” Cai said. “Such a scenario would be unpleasant.”
It would be particularly unpleasant in light of a February prediction, also by Parks Associates, that new multimedia platforms in the U.S. will capture $12.6 billion in advertising revenue by 2012. In “New Advertising Platforms and Technologies,” Parks analysts suggested more than $6.6 billion of the total would be derived from broadband multimedia advertising.
“The floodgate is open, and the deluge of ad spending to these new platforms is irreversible,” said Parks Senior Analyst Harry Wang. “There must be interest alignment among major stakeholders to avoid frictions like the Writers Guild strike that hindered content flow to these new platforms.”
According to the report, the ability to target specific audiences and make campaigns accountable for results within specific demographic segments are driving advertiser interest in new multimedia platforms. Innovations in ad formats and improvements in ad inventory management also boost the appeal of new media to brand advertisers.
“The next five years will be an exhilarating period, both for technology vendors who bring in innovation and for publishers who balance audience reach with target precision,” Wang said.
Both reports are available at ParksAssociates.com.
