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Technology Stocks : ISDN - GlobalNet Systems -- Ignore unavailable to you. Want to Upgrade?

To: Ian A. who wrote (140)	6/18/1998 3:18:00 PM
From: Lane Hall-Witt	Respond to of 227

Ian, Thanks for posting the link to this interesting article. There's no question that there are an incredible number of directions to go with streaming technologies such as these. I have in fact often wondered if ISDN should be focusing on more modest "niche" sectors, instead of trying to take a position in the competitive mass entertainment field: areas like digital archiving, education, etc. But I am struck by the fact that they seem to have some connections and so am willing to see where that leads, so long as they're wise enough not to go broke while trying to enter this field--. Although the entertainment site has been ISDN's focus for some time, they are also working to enter other fields as well. Their audio technology stemmed from work they've done in IP telephony, which is another area with huge potential (and many competitors). As for the specifics of the technologies, I can't offer much insight. I think the distinguishing feature of their audio streaming is just that their compression algorithm is more efficient than those of their competitors. They seem to be able to pack more sound quality into fewer bits -- which obviously is the essence of the task, especially with network-based delivery. I'm always struck by the quality of the samples on the OEN site, compared to samples delivered via RealAudio on other sites; often, the contrast is quite pronounced, with OEN offering impressive stereo samples at 22 kbps and other music sites offering "tinny" RealAudio mono at 16 kbps (using a 28.8 modem). This is obviously anecdotal evidence, but the difference is quite noticeable and points to successful engineering on ISDN's part. (By the way, in terms of media quality at low bandwidth, I'm more impressed with Microsoft's NetShow suite than with RealAudio. We certainly can't overlook them as a competitor in this field, along with players like RealNetworks and Starlight.) All of this said, ISDN does still have some work to do on its audio technology: they need to build more tolerance into their streaming to accommodate network congestion. When bandwidth becomes too scarce, I have encountered cases where the audio eventually becomes so degraded that it blips out and doesn't re-buffer and pick up again. This will be especially problematic in a pay-per-use environment! Along these same lines, they need to incorporate "layering" methods to strip away layers of quality when bandwidth narrows; this would essentially be a built-in degradation path that recognizes bandwidth limitations and reduces media quality in order to reduce bandwidth requirements. I don't know what ISDN has done to deploy these methods, if anything, but it certainly is not adequately implemented at this point on the OEN site. These are issues that all the streaming-media vendors are working on right now. The primary benchmark, to me, is that ISDN's compression technology allows them to deliver extremely high quality stereo sound over a 28.8 line. Despite certain limitations in their implementation, they seem to have solved some core problems, which is important. I asked Mr. Roth if any of ISDN's technologies were patented, or if there were plans to patent technologies. He said no because of the time and disclosures involved in the application process. (I know very little about the process of applying for patents and so don't have an evaluation of this to share.) I think there's still room in this market space for a company like ISDN to make an impact. I see it as a likely acquisition target, if they continue to make progress with the technology. You might recall that Cisco recently bought Precept for something like $84 million in order to acquire their IP/TV technology. Microsoft acquired VXtreme for $75 million in 1997. RealNetworks gave Vivo 3.4 percent of its company for the Vivo technology. I think there are more companies out there that will want streaming technologies. Netscape has to get in on this. Disney, Time Warner: i.e., the media moguls. The telcos and cable companies. The networking companies in Cisco's space. ISDN needs to continue building up its technologies and then package them -- transform them into marketable commercial products. OEN is just a first step in this direction. Others will follow.