The Internet Encyclopedia (Volume 3)

P1: IML/FFX P2: IML/FFX QC: IML/FFX T1: IML

Video ̇Compression ̇OLE WL040/Bidgolio-Vol I WL040-Sample.cls September 14, 2003 18:10 Char Count= 0

548 VIDEOCOMPRESSION

require further research. Macromedia Flash Animation

(http://www.macromedia.com) provides vector graphics

animation suitable for cartoon applications. Cartoons

may be arbitrarily spatially scalable without loss of

quality.

Qualcomm’s Adaptive Block Size Discrete Cosine

Transform uses a combination of quadtree and discrete

cosine transform methods (see Data Compression) to en-

code high quality imagery for digital cinema applications.

Lastly (Fisher, 1995), pointed out a number of mecha-

nisms for encoding video sequences via fractal compres-

sion methods.

How Standards Are Defined and Described

When an industry sector perceives the need for a new

standard, it communicates this information to the na-

tional standards body, which in turn proposes it as a

Table 5Hypothetical Broadband Video-on-Demand Business Model^1

Digital Video Business Model

Broadband VoD Revenue Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Avg Subs 10,297,000 13,248,000 16,410,000 19,491,000 22,535,000 24,989,000

% who use VoD 2.4% 2.4% 2.4% 2.4% 2.4% 2.4%

Avg users per day 247,128 317,952 393,840 467,784 540,840 599,736

Conversion Rate (daily) 6.7% 6.0% 5.4% 5.0% 4.4% 6.7%

purchases/day 16,558 19,173 21,110 23,506 23,554 40,182

Average Purchase $4.00 $4.00 $4.00 $4.00 $4.00 $4.00

Monthly Subscription per Sub $8 $8 $8 $8 $8 $8

Gross purchase revenue per day $66,230.30 $76,690.02 $ 84,439.30 $94,024.58 $94,214.33 $160,729.25

Gross subscription revenue per day $65,900.80 $84,787.20 $105,024.00 $124,742.40 $144,224.00 $159,929.60

Gross revenue per day $132,131.10 $161,477.22 $189,463.30 $218,766.98 $238,438.33 $320,658.85

days in year 365 365 365 365 365 365

Annual Gross Revenue $48,227,853 $58,939,186 $69,154,103 $79,849,949 $87,029,990 $117,040,480

Content Partner Revenue Share 52% 52% 52% 52% 52% 52%

Content Partner Net Revenue $25,078,484 $30,648,377 $35,960,134 $41,521,974 $45,255,595 $60,861,049

Service Provider Avg Revenue Share 48% 48% 48% 48% 48% 48%

Service Provider Net Revenue $12,037,672 $14,711,221 $17,260,864 $19,930,547 $21,722,685 $29,213,304

Capital Costs

Maximum Concurrent Usage 10% 10% 10% 10% 10% 10%

New Streams Required 24713 31795 39384 46778.4 54084 59973.60

Server Capacity (bps) 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000 200,000,000

Bandwidth per stream (kbps) 580,000 580,000 580,000 580,000 580,000 580,000

Number of New Servers 72 92 114 136 157 174

Cost per Server $10,000.00 $4,996.17 $2,496.17 $1,247.13 $623.09 $311.31

Cost per Stream $50.00 $50.00 $50.00 $50.00 $50.00 $50.00

New Server Costs $716,671.20 $460,677.48 $285,097.01 $169,182.57 $97,727.43 $54,143.36

New Stream Costs $1,235,640.00 $1,589,760.00 $1,969,200.00 $2,338,920.00 $2,704,200.00 $2,998,680.00

Total Server Costs $1,952,311.20 $2,050,437.48 $2,254,297.01 $2,508,102.57 $2,801,927.43 $3,052,823.36

Amortized Server Costs $555,214.24 $1,177,269.74 $1,890,689.14 $2,292,285.65 $2,683,311.14 $2,893,965.57

Operating Costs

Bandwidth Costs

Purchases per year 6,043,515 6,997,965 7,705,086 8,579,743 8,597,057 14,666,544

Average 120-min movie (MB) 4176 4176 4176 4176 4176 4176

Total Usage (MB) 25,237,719,642 29,223,499,936 32,176,438,134 35,829,007,979 35,901,311,828 61,247,487,243

Bandwidth costs ($ per MB) 5.E-05 8.E-06 1.E-06 2.E-07 3.E-08 4.E-09

Total Bandwidth Costs $1,261,886 $222,924 $37,447 $6,362 $973 $253

Cost per Rack Unit $900 $900 $900 $900 $900 $900

Rack Units (2RU servers) 36 46 57 68 78 87

Racking Costs $32,250 $41,493 $51,396 $61,046 $70,580 $78,266

Total Network Costs $1,294,136 $264,417 $88,843 $67,407 $71,552 $78,519

Number of CSRs 51 66 82 97 113 125

VoD Staffing Costs per CSR $16,000 $16,544 $17,106 $17,688 $18,289 $18,910.00

Total Staffing Costs $823,760 $1,095,875 $1,403,547 $1,723,784 $2,060,713 $2,362,710

Equipment Maintenance $71,667 $46,068 $28,510 $16,918 $9,773 $5,414

BadDebt (@ 2% of Revenue) $964,557.06 $1,178,783.72 $1,383,082.06 $1,596,998.98 $1,740,599.79 $2,340,809.59

Marketing/Promotion $482,278.53 $589,391.86 $691,541.03 $798,499.49 $870,299.90 $5,852,023.98

Total Operating Costs $4,191,613.13 $4,351,804.41 $5,486,212.38 $6,495,893.87 $7,436,248.79 $13,533,442.09

P&L

Balance Sheet $7,846,059 $10,359,416 $11,774,652 $13,434,653 $14,286,437 $15,679,862

(^1) Boldface type indicates results while roman type indicates intermediate values.