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Good News for UK and Canadian Video Streaming; And for the US?

Good News for UK and Canadian Video Streaming; And for the US?

With the U.S. market on a steady pattern of growth, the next great opportunity for English-language video content online, is in the UK and Canada. It’s the next logical place for eyeballs and monetization for English-language movies, shorts, and episodic content. The only problem is that UK and Canadian broadband consumers are stifled by lower access. In these territories, high-speed broadband (i.e. what you need for successful video streams) is either scarce or metered, or both. This past week saw two promising announcements in each territory, signaling a big leap forward to reverse the problem. First, rural areas in the UK will see a commitment of massive resources to help bring broadband to their remote destinations. From a BBC News report:

Homes and businesses in four rural English counties are to get superfast broadband connections. Devon and Somerset will share £30m of government funding for the roll-out, Norfolk will get £15m and Wiltshire £4m… At the moment, the average speed of broadband in Somerset is 3MB per second, whereas superfast broadband is at least 10 times faster. The money will go towards upgrading the network so 85% of residents and businesses will have speeds of 16-20 Mbps (megabits per second).

Culture Secretary Jeremy Hunt said: “Broadband is becoming just as essential to homes and businesses as electricity and telephone lines and it is now only a matter for time before people in these three rural areas have access to the connection speeds more commonly associated with towns and cities.

“This is part of our plan for virtually every community in the UK to have access to superfast broadband.”

There are several broadband video options exclusive to the UK (Blinkbox, LoveFilm, etc.) but they haven’t found the same footprint that their US counterparts have found (Hulu, Netflix) partly due to these limitations, among other issues. In Canada, the issue for available platforms such as Netflix has been broadband caps. For those unfamiliar with this practice, think of it as having your broadband billed to you based on usage just like your electricity or heat utility bills. Broadband caps exist in America, but they have thus far been set at a relatively high ceiling. However, caps are a setback when you consider how much bandwidth it takes to stream a feature-length film. Good news came a few days ago, when major Canadian cable/broadband provider Shaw announced plans for higher caps for subscribers and even possible unlimited subscription plans. From a GigaOM report:

Fears like these have been a real concern for Netflix. The company went so far as to lower its default video quality in Canada, and it’s offering Canadian customers the option to disable HD streaming completely in order to avoid costly overage fees. Netflix has also told Canadian regulators that billing users that exceed their cap per gigabyte, as it’s being done by Shaw’s competitor Bell Canada, is essentially a money grab.

ISPs claim bandwidth caps are about dealing with network congestion, but critics have argued that it’s really about keeping potential competitors to pay TV services in check. Shaw’s most recent broadband plan changes seem to support this claim: The cable operator is also introducing a number of new plans with caps as high as 1 TB, and even two unlimited data plans. However, these new plans are only available to customers who also get their TV service through Shaw.

As spoiled as we might be stateside, there is still a lot of activity brewing at the ISPs (Internet Service Providers) as they adjust broadband capabilities. On Monday, Joshua Weinstein at The Wrap wrote about AT&T joining other US cable/broadband providers in a desire to cap usage. From his article:

An AT&T executive said that only 2 percent of its customers will exceed its limits. To use up 150GB, a user would have to stream 20 standard-definition movies a month, the company claims. That’s not an insurmountable tally for a really heavy Netflix user, but few subscribers are likely to stream that many films in a month.

However, the cap only allows for the streaming of about 10 high-definition movies, which will have a greater impact on video operators like Netflix as their product offerings evolve. For a cutting-edge Netflix subscriber, throw in a few game downloads on the Xbox 360 network, maybe a few funny-cat videos on YouTube, some online porn, and some sitcoms on Hulu, and all of the sudden, you’re over the cap.

Certainly, data usage is only going to increase over time. A report from research company Sandvine claims that in North America, the average monthly data use jumped from 15GB gagabytes six months ago to 23GB this spring.

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