Tuesday, February 21, 2012

More Proof That Providing Dumb Pipes Is Smart ... Very Smart

I have written previously about the smartness of cable companies focusing on providing so-called "dumb pipes" -- i.e., broadband -- despite more press being written about those companies losing content subscribers. In fact, I wrote about this very topic last week as well.

Here's more proof of why that is smart, very smart. In a statement issued by broadband provider Hong Kong Broadband Network (HKBN), as reported initially by Gigaom, the company stated that it "embrace[s] Over-The-Top (OTT) content providers who help fill up our excessively Big Fat Dumb Pipes. We happily co-exist with OTT providers ...."

Now THAT's the spirit! Why? Because the margins for providing broadband are significantly higher than margins for providing cable content packages themselves. For HKBN, it reported a healthy 17.5% return on equity.

As HKBN points out, its broadband biz benefits brazenly by the beautiful bounty of accelerated growth of online video -- which requires fatter and fatter pipes. The more compelling content that is out there, the more consumer demand for fatter pipes. And, the fatter the pipes, the more creation of compelling OTT video content.

It is a beautifully synergistic world. Kumbaya!

Online Video January 2012 Metrics -- comScore Style

Industry leading measuring firm comScore just released its January 2012 online video metrics -- which, again, not surprisingly reflect the relentless growth of online video. Here are salient numbers for the month of January:

-- 181 million U.S. Internet users watched 40 billion videos online
-- this represents 84.4% of the U.S. Internet audience
-- Google sites (primarily YouTube) led the way with 152 million unique viewers
-- VEVO was a surprising second with 51.5 million uniques, Yahoo! sites third with 49.2 million
-- average viewer of online video watched 22.6 hours of video online -- think about that!
-- VEVO finished with the highest engagement of any site with 62 minutes per viewer
-- the average online video was 6.1 minutes in duration
-- Americans viewed 5.6 BILLION video ads in January (2.3 billion video ad minutes)
-- Hulu delivered the highest frequency of video ads to users, averaging 43 per viewer
-- video ads accounted for 12.2% of all videos viewed