Hey Pru, here is the article that was released about a week ago. Not as positive on RNWK specifically as the future of streaming media in general. But, what the heck, RNWK "owns" the industry today anyhow. We need more speed, and the sooner the better. Rory
Business Week: June 28, 1999
Science & Technology: The Internet
Video: The Net's Next Battle Royal
The technology isn't there, but the competition is
Techies at Home Box Office Inc. were not impressed when the first wave of video hit the Internet about two years ago. ''It was postage-stamp stuff, with slow-moving pictures and poor resolution,'' says Kevin C. Dowdell, HBO's vice-president for interactive ventures.
Today, Dowdell paints a very different picture. Video trailers from upcoming shows are now one of the biggest attractions on HBO.com. And on Apr. 30, HBO used software from Apple Computer to ''Webcast'' a live 30-minute show with comedian Dennis Miller directly to fans' personal computers. The technology isn't dependable enough for 24-hour-a-day broadcasts, says Dowdell, ''but we know video Webcasting is coming. It's better to embrace the trend than to be wary of it.''
HBO's change of heart shows how quickly the landscape is changing in the chaotic world of Internet broadcasting. Two years ago, the term ''Webcast'' referred to audio. It meant using software tricks to ''stream'' live news and sports updates or music to PC users without interminable file downloads.
Now, video is the new hot button, thanks to rapid advances in network infrastructure, storage capacity, and compression technology. Dell Computer, Intel, and Microsoft are Webcasting meetings with executives. Film studios are posting trailers of their new flicks. TV networks and cable channels are tiptoeing toward regular sports and news Webcasts. ''Video is probably the most underhyped business on the Internet,'' says analyst Jae Kim at consultants Paul Kagan Associates in Carmel, Calif. ''But that is going to change.''
Don't expect to be blown away by the video on your PC screen. Compared with TV, or even CD-ROMs, live video on the Web still looks coarse and jerky. That's because even in compressed form, the video files are made up of huge numbers of digital packets, which are transmitted in a continuous stream. It is a much bigger challenge than E-mail and other data-file transfers in which packets are sent out in bursts and then reassembled at their destination. If one of those E-mail packets gets lost, your computer automatically requests that it be resent. With streaming media, there's no time for that. ''We fire those video packets at you in real time,'' explains Philip E. Rosedale, chief technology officer of streaming-media leader RealNetworks Inc. in Seattle. ''If you miss one, it probably isn't retrieved.'' Worse, as more people use streaming video and audio, network congestion grows, more bits get garbled or lost, and image quality deteriorates.
SHARPER IMAGE. Working out these kinks and bringing Webcasts up to entertainment grade is no mean feat. HBO's Dowdell figures it will take at least three more years.
Full-length streaming movies on the Net could take even longer, according to Allen Weiner, vice-president of NetRatings Inc., an audience-measurement firm.
Nobody wants to wait that long. So streaming-media companies and their bandwidth partners--telcos, Internet service providers, and satellite companies--are deploying a variety of new techniques to speed sharper images into homes and offices. The most obvious roadblock, today's slow modems, will be mitigated when cable modems and the fast copper-based technology called digital subscriber line become widely adopted. Removing that logjam creates ''a significant opportunity for Webcasting,'' says Rick Mandler, vice-president for new media at ABC Broadcasting in New York.
A bigger challenge will be fixing the Internet itself. This sprawling network of networks simply doesn't handle video streams efficiently. Today, each user who clicks to view a Webcast receives a separate stream. Multiply that by millions, ''and video streaming begins to run into big problems,'' says Hamid Ahmadi, vice-president for networking and distributed systems at AT&T Labs in Florham Park, N.J.
To reduce congestion caused by ''unicasting,'' Cisco Systems, Sun Microsystems, and others have developed multicast routers and servers that let many computers share a single video stream for long portions of the route. Packets can still get lost. But AT&T, for one, is developing technology that makes it simpler and cheaper to recover them. And along with other telcos and ISPs, AT&T is pursuing schemes to let networks assign special priority to audio and video streams so that there will be less interference.
ONE-STOP SHOPPING. At the same time, RealNetworks, Microsoft, and other streaming-media companies want to make sure that popular Webcasts get hosted or stored at multiple distribution points, known as proxies and caches, to reduce the distance between the video source and its destination. They're working with a gang of startups with names like Akamai Technologies Inc. and Sandpiper Networks Inc. to forge virtual pathways across the Net so that audio and video can zip down their own lanes without mingling with other types of traffic. Indeed, RealNetworks' Webcasting unit, the Real Broadcast Network, is creating an entire ecosystem of hardware and bandwidth partners such as Sun, Intel, Inktomi, and AT&T, thus offering one-stop shopping to Webcasting customers.
Some streaming-technology companies do double duty as hosts for Webcasts. Bolstered by a 7.5% equity investment from NBC, San Diego-based Intervu Inc. sells knowhow in delivering video over a distributed network. If that soccer match you want to see is in Los Angeles and you log on in Denver, the broadcast gets delivered by a server just a few miles away. This approach has attracted a cadre of major media companies to Intervu, including Cable News Network, Bloomberg, and Saatchi & Saatchi, as well as NBC.
Will all these upgrades usher in a new age of Net-based video? Most experts say yes. Just a few years ago, notes Microsoft Chief Technology Officer Nathan P. Myhrvold, the audio and video performance of CD-ROMs was inferior to TV. Now, PC audio is better. Still pictures are superior on PCs. With high bandwidth and fast chips, ''PC video will also be higher quality than anything on TV,'' says Myhrvold.
Even in its current, rough state, it's amazing how quickly streaming-audio and video are taking root. Broadcast.com, the world's largest host for Webcasts of news, sports, and corporate events, claims more than 1.1 million visits each day. President and co-founder Mark Cuban says revenues are growing 30% per quarter. RealNetworks Inc. claims 70 million registered users of its audio and video software--more than triple last year's installed base. And Apple Computer says that 5 million people downloaded QuickTime 4.0--the software used for HBO's Dennis Miller Webcast--during a 50-day beta test preceding its June 8 introduction.
Total revenues in this business are still minuscule. All publicly traded streaming-media companies combined pulled in a meager $288 million last year, according to Kagan.
But with the advent of broadband, advertisers are bound to jump on the Webcasting bandwagon, predicts ABC's Mandler. That's because it's easier to weave shopping options into the fabric of Web-based entertainment than into ordinary television. You see a sofa that you like in a video Webcast, and you click to order it.
If consumers find this idea appealing, then by 2008, Webcasters could see $20 billion a year in ad revenues and transactional splits with merchants, according to Kagan. Dreams like that aren't built upon the squinty little video windows on today's cramped PC desktops. But with industry stars and nimble startups all lining up, the picture is bound to get better and better.
By Neil Gross in New York, with Steven V. Brull in Los Angeles
Copyright 1999 The McGraw-Hill Companies, Inc. All rights reserved. Any use is subject to (1) terms and conditions of this service and (2) rules stated under ''Read This First'' in the ''About Business Week'' area.
6/17/99 8:18 PM |
