Video's impact on Internet 'just scratching the surface'

Video is playing a central role in a new wave of Internet innovation that threatens to upend business models while providing consumers a new variety of entertainment choices, according to executives at Cisco Systems' C-Scape conference Tuesday in San Jose.

Service providers and broadcasters are preparing for a time when access to video programming will be far easier and, perhaps, cheaper than today.

In recent years, start-ups such as YouTube have put video into the popular lexicon of the Internet. YouTube's success was so convincing that search engine titan Google paid $1.65 billion for the company last year.

Erik Huggers, group controller for future media and technology at the BBC, said video distributed on the Internet will remake the broadcaster. The organization will abolish tape and become completely digital by 2011, he said.

The BBC also is looking at ways to create an online social network around its 1.3 million hours of archived material, giving users new ways to find online content.

"I think we're just scratching the surface," said Huggers, who spoke to the conference from London on a Cisco video-conference system.

The BBC now handles 1.3 petabytes of online traffic a month, about two-thirds of which is audio content, he said. In a year, video will help the volume grow to 5 petabytes. A petabyte is a quadrillion bytes. Cisco Chief Executive John Chambers predicted the rise of online video could make television broadcasting free on the Internet. Companies will make money providing services, he said.

Other Cisco executives saw a less dramatic change. "I think there will be different models," with some paid and some free services, said Tony Bates, a Cisco senior vice president. "I think you're going to see both."

Cisco anticipates a $50 billion market opportunity. Innovation will take place around video surveillance and video communications tools that let employees create and broadcast messages to one another - like YouTube does for consumers, said Marthin De Beer, another Cisco senior vice president. "Video is happening, and it's not just happening for consumers," De Beer said.

Cisco is working on applications that will integrate video and social networks. Using the application, someone would be able to invite friends to watch an online film and interact with them while the show takes place.

The company also plans to demonstrate another technology at next month's Consumer Electronics Show in Las Vegas. Called program "shifting," it will let a viewer pause a movie or program and redirect it to, say, a television in the bedroom, or a laptop at the airport.

In five years, the company predicts, video conferencing will be so advanced it will permit three-dimensional images so that someone moving about the conference room could see both the fronts and backs of people in remote locations.