The explosive growth of Google's YouTube and video-sharing services such as BitTorrent has led to a dramatic increase in the amount of data traversing the internet -- Google CEO Eric Schmidt has pointed out that internet traffic generated by YouTube in 2006 was larger than all internet traffic combined in the year 2000.
There is room for further growth -- even with YouTube's success, less than 1% of video is delivered over the internet, as existing broadcast systems such as television dominate. But that could change.
It's unclear how online video will impact the telecommunications carriers (such as AT&T (T) and Verizon Communications (VZ)) that own the pipes that deliver video to the end user, or the content providers (such as CBS (CBS), Time Warner (TWX), and Viacom (VIA)) that create the video in the first place. Because of the breadth of video located all overy the web, Video search will be very important to users as well as for those working on Video advertising models.
One thing is clear, however -- online video requires massive amounts of bandwidth. A single 30-minute sitcom requires as much bandwidth as over two years of email messages for an average user.
The bandwidth required for online video will require telecom companies to spend massive amounts of money on network upgrades to keep pace with the additional traffic.
Companies who operate along the supply chain getting DVDs to viewers are clear losers from the rise of online video, as online video donwloads could cut them out as middlemen.