Can Internet Video on Demand actually deliver?

Infrastructure constraints limit the appeal of Internet Video on Demand

Video on Demand promises immediate access to content. But the reality of that promise depends on the performance of the viewer's Internet connection. Real-time streaming in DVD quality requires a minimum of 3 Mb/s; in Blu-Ray quality (1080p), 30 Mb/s. Today, very few home connections in the US can deliver even DVD speed on a sustained basis.

Because bandwidth is scarce, Video on Demand falls to the infamous "quality triangle": Video on Demand services have to sacrifice either picture quality, download speeds, or hosting costs. Because of the competition with physical substitutes, which set very competitive quality and price standards, download speeds are most likely to suffer.

According to a recent study by the Nemertes Research Group, average broadband speeds will remain sluggish within the next five years, because of insufficient investment in the "last mile". In other words, instant high definition movies will remain out of the reach of most US consumers – which pretty much negates most of the appeal of Video on Demand.

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