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While online sellers push everything from flowers to lobsters this season, the real holiday "gift" is interactive shopping's boost to revenue growth in the sluggish multimedia market, says a new report from
Insight Research. In years past, visions of video-on-demand danced in multimedia marketers' heads, but in 1998, video-on-demand will comprise just $47 million of multimedia service revenue while interactive shopping will bring in more than 100 times that amount at $4.8 billion.
According to Insight's report The Market for Video & Multimedia Services 1998-2003, the multimedia market includes the Internet, videoconferencing, CD-ROM, DVD, interactive shopping, video games, and video-on-demand. One of the primary drivers for the growth of these services--and the associated network equipment--is the residential consumer. Today, homes with a PC and modem can connect to the Internet, but the high-bandwidth bilateral communication needed to carry video-telephony and video-on-demand is not efficiently handled via a standard telephone or cable line. And direct fiber to the home
(FTTH) is still an expensive proposition.
"The future success of video-telephony and video-on-demand depends upon a number of variables--cost, content, security--but most importantly, the network delivery strategy," explains Robert Rosenberg, president of
Insight. "If fiber moves closer to the home, it can be mated with less expensive, high-bandwidth wireless and copper technologies such as LMDS and
ADSL, making the lingering promise of interactive video services a reality," Rosenberg notes.
The Market for Video & Multimedia Services 1998-2003, forecasts the US video-on-demand market to reach $14.1 billion by 2003, while interactive shopping will cash in at $35 billion. Five-year forecasts of CD-ROM, DVD, Internet access, Internet advertising, electronic messaging, video telephony, and video game revenue are also included. Multimedia network and access equipment expenditures--routers,
multiplexers, switches, servers, modems, LMDS, ADSL, and network administration and billing--present infrastructure investments through 2003.
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