FEER(4/26): Big Business Gives Streaming Media Another Shot
Updated: Wednesday, April 18, 2001 06:15 PM ET
IT WASN'T THE MOST auspicious time for Hong Kong data centre iLink's listing. The Nasdaq was falling 5% a day in early March, and if hi-tech was out of favour, data centre was practically a swear word. But even if Internet stocks were no longer investors' darlings, the Internet itself still held a solution -- make the sales pitch for the stock to worldwide investors on-line.
Enter William Wu, director of investment banking for SBI E2-Capital, the Hong Kong investment advisory arm of Japan's Softbank. Wu saw iLink Holdings initial public offer on Hong Kong's Growth Enterprise Market as the perfect opportunity to try out his baby, a share-trading platform called OpenIBN that he designed as a way to use streaming media to promote IPOs.
Streaming media -- Webcasts of video and audio -- has been around for about five years, but never lived up to their promise as a brave new form of entertainment. What failed to catch on with consumers, though, looks to be a hit with corporations -- and Asian companies are just waking up to the potential.
Instead of an expensive trip to present iLink to investors in Europe and Asia, Wu transmitted video of a two-hour presentation to a live audience in Hong Kong on www.openIBN.com.
After Wu alerted brokers in Europe, Japan and Taiwan and gave them a password to view the Webcast, some 200 brokers, fund managers and serious private investors logged on in three days. They could watch iLink chief executive Billy Tam's presentation at their own convenience and place orders for shares on the Web site.
The results were impressive. The portion of shares available to the public was oversubscribed more than 11 times and the stock rose 10% in its first day of trading. "During that three-day period, we created a huge demand for the shares by broadening the base of potential investors," Wu says.
Tam credits the novelty of OpenIBN with creating a buzz around iLink's shares. "I know the technology, so it was easy for me to accept it," he says. "But others will also see how easy it is to use. I can't see any reason other companies wouldn't do it. It's so economical."
Despite the spectacular crash of a number of United States-based streaming-media entertainment companies (including one backed by director Steven Spielberg), the technology suddenly looks like taking off. "Worldwide, digital media is exploding," says Daisy Wong, Microsoft's manager for development of its Asian digital media business. "We've seen a 40% increase over nine months."
Most of that increased interest comes from corporations. "The real money (in Asia) right now is in the corporate streaming market," with banking and finance leading the way, says Duncan Craig, editor of Hong Kong-based Internet World magazine, which is sponsoring Asia's first streaming media exhibition in Hong Kong next month.
U.S. consulting company Jupiter Media Matrix estimates that U.S. corporate spending on streaming media will soar 20-fold to $2.8 billion by 2005, as companies use Webcasts to communicate with securities analysts and their own employees. And unlike consumers, corporations pay streaming-media companies for the services they use.
Yahoo! Broadcast offers Webcasting tools to corporate clients in the U.S., Australia, New Zealand and Singapore. But Craig cautions that the streaming-media industry in Asia "is at the first 100 metres of a 10-kilometre race."
Wu is now talking to other medium-sized investment banks interested in leasing the OpenIBN platform -- "like a car everybody can rent" -- to launch IPOs. SBI E2-Capital would charge either a flat fee or a percentage on each deal.
But obstacles remain. Many securities analysts and would-be investors find their access to Webcasts blocked by the same computer firewalls that protect their own corporate secrets. A bigger problem in Asia is that, outside of South Korea, the broadband connections vital to successful high-speed streaming media are still limited.
Just ask Wu. He dialled into the iLink Webcast from his Hong Kong home on a modem and low-speed telephone hook-up. "I could only listen to the sound and not see the video of my own presentation."
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