Streaming vs File-Based Media

Diagram of Streaming Multicast

Image via Wikipedia

I’ve been a huge fan of the streaming model vs the file based model for as long as I’ve been thinking about digital media. I wrote this about streaming vs files in the digital music business last summer:

File based music has to exist today because there is no good mobile
broadband internet solution. When you are at the gym, in the car, on a
run, you have to have files to listen to. You can’t get your music via
a stream when you are on the go. But that’s going to change and I
believe within five to ten years, we’ll be listening to last.fm, the
hype machine, and rhapsody in our cars and iPods and phones. And when
that day comes, owning files isn’t going to be necessary anymore. It’s
not necessary anymore in my home. I have several hundred gigabytes of
mp3s (all acquired legally by the way) in a server in my basement. We
barely ever listen to them. Streaming music is better because it’s
abundant. I don’t own all the music in the world on my server. But
almost every song ever recorded is on the Internet somewhere.

I think this is even more compelling in video where the file sizes are larger, take longer to download, and eat up more hard drive space. And clearly monetizing streaming media is a lot easier because ad insertion can be done in real time which means it can be targeted, tracked, and measured.

And it seems that the market is starting to move to streaming and away from file based media. Ars Technica reports that:

with the rise of Hulu, YouTube, Veoh, the BBC iPlayer, and many more,
it’s streaming traffic that now generates tremendous concern, even as
P2P drops off in some cases. The shift, should it become a permanent
trend, is good for everyone.

The part of that quote that really got my attention was the comment that P2P "drops off in some cases." Ars Technica quotes several sources in that post, including this one:

at PlusNet [a british ISP] P2P traffic has dropped from an average of 13.4TB a day
last year to 12.2TB a day this year, and now makes up only 25.9 percent
of total traffic

The Ars Technica post also has a lot of data about the rapid increases in streaming traffic, but I think we all can see that happening right in front of us. The real insight is that streaming takes away the need and the desire to pull files from the P2P networks.

This is a great thing for everyone. Streaming is easier for users and a mainstream activity where P2P is not. My daughter, who is 17 and totally technical and at ease on the Internet, had to ask me last weekend how to download a torrent. And streaming works much better as a business model for content owners and media companies.

We are finally getting to the point where content owners are embracing the Internet, putting their content up in streaming format, and getting the financial and promotional advantages of doing that. And in the process putting a dent in the file based media business. It’s about time.

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