What does 600B GBs of video look like?

Cisco released an update to its Visual Networking Index (VNI) yesterday that predicts surging online video and Internet TV consumption will cause global IP traffic to quintuple by 2013 to 667 exabytes (667 billion gigabytes, whoa!). The survey, which analyzes and models analysts' estimations of network activity, predicts that all forms of video will account for almost 90% of total consumer IP traffic by 2013. Cisco also sees mobile video growing quickly, and projects it will amount to 64 percent of mobile data usage by 2013.

It's necessary to address Cisco's vested interest in seeing its projections realized, as the company has made a significant bet on the growth of online video with acquisitions, hardware releases, stakes in online video technology companies and even a rumored expansion into selling CDN services. Cisco also would see incremental increases in sales of core networking equipment and routers if video traffic surges like it expects.

So besides padding Cisco's already flush pockets, what would growth of this magnitude mean for online video, and what trends must continue for these projections to be realistic? While all the metrics point toward continued increases in video traffic, are Cisco's projections overblown?

First, there are three ways the online video growth curve could begin to plateau. They are YouTube, YouTube and YouTube. With this week's report that YouTube currently streams more than 30 billion videos per month worldwide, it's clear that the company is driving a significant percentage of the video traffic Cisco is eyeing. If YouTube retrenches and quits streaming to emerging markets like Eastern Europe, like I expect they will have to at some point because of economic necessity, this would depress online video traffic growth dramatically. Second, the site could start charging a small amount for uploading videos, or putting popular and premium videos behind some sort of paywall, which again would depress video traffic. And third, the company may begin deleting scores of infrequently viewed videos, which in aggregate would put downward pressure on video traffic figures.

But if YouTube remains as free as a bird now and for the next five years, and some other variables trend the way Cisco expects they will, these projections seem likely to come to pass.

Impending cable TV online video offerings will significantly increase the amount of premium online video content and will contribute to sharp increases in traffic growth. Also, video capture capability on the next-gen iPhone and embedded support for Qik live-streaming on the new Nokia smartphone show a trend toward increased ease of producing and uploading video. And as more and more players in online video embrace the syndication model, more targeted video content becomes available, which could drive up the number of videos watched per user. The number of videos per user also likely will grow as people embrace watching a variety of programming types in online video format.

While it's too soon to tell if Cisco's very bullish projections will pan out, I know that few online video companies will mind if they do. That sort of video consumption means increased hardware sales, more CDN and video ad revenues, and an uptick in usage of video software-as-a-service plays.

 - Pete
@fierceonlinevid