INKT's streaming media cache in "contolled release"...
News March 16, 00:32 Eastern Time
Mar. 15, 1999 (ISP BUSINESS NEWS, Vol. 5, No. 11 via COMTEX) -- This could be the
quietest product launch in ISP industry history. Without so much as a press release or
product announcement, Inktomi [INKT] took its much ballyhooed streaming media cache
from trial stage to "controlled release."
What this product evolution means is a select group of undisclosed ISPs that already own
Inktomi's product - a $4,000 module called media cache option - soon will be able to offer
customers audio and video content from providers like CNN Interactive. In the process,
these ISPs will erode the business of companies like InterVU [ITVU], Broadcast.Com
[BCST] and V-Stream.
Potential users of this product include most of Inktomi's caching customers - America
Online [AOL], Ameritech [AIT], BellSouth [BLS], Cable & Wireless [CWP], Exodus
[EXDS], Concentric [CNCX], Chello and Telenor.
And the day that multiple ISPs are finally able to offer streaming media services en
masse is the day streaming media prices fall fast.
"ISPs entering this market will change market circumstances quite a bit," says Monty
Mullig, CNN Interactive vice president of Internet technologies.
CNN Interactive expanded its contract with InterVU on March 10, reconfirming InterVU as
the sole provider of streaming video for CNN and announcing that InterVU banners will
appear on CNN.com/videoselect's site and in CNN's live video pop-up windows.
Competitors: What A Mess
Naming winners and losers as a result of this technology release is incredibly hard
because content providers, ISPs and streaming media service providers each view this
market differently.
Mullig says ISPs armed with Inktomi's technology - provided it works - and companies
like InterVU and Broadcast.Com are basically all on equal footing as streaming media
service providers, and can all be contracted to work with CNN.
InterVU CEO and founder Harry Gruber says InterVU doesn't have competition in its
space because the company is a wholesale streaming media provider, as opposed to
Broadcast.Com, which sells content under its own brand.
The wholesale approach helped InterVU win CNN Interactive as a customer in the first
place, because "Broadcast.Com is CNN Interactive's competitor," Gruber says. Mullig
says InterVU's video streaming services are less expensive than Broadcast.Com's.
Broadcast.Com officers refused to be interviewed for this story.
While Inktomi officers say they are unable to name any ISP that currently uses media
cache for streaming media, execs emphasize this technology is by no means eroding the
leadership of InterVU and Broadcast.Com in the streaming media space.
"These companies have already established themselves as premium brands in the
streaming media space, so it wouldn't matter if they decided to change a couple of things
under the hood while they continued selling their services," says Kevin Brown, Inktomi
spokesman.
InterVU doesn't appear to recognize Inktomi's caching technology as something that can
enable competition in the streaming media space by itself, and InterVU officers are not
exactly rushing out to buy the technology.
"There is no other company that can centrally manage audio and video data over a
fault-tolerant data network like the one that we have, " Gruber says.
In other words, ISPs seeking to enter this space would have to develop a system that
would monitor all video feeds at all times to all of a content provider's customers.
That is, if ISPs choose to go down that path. Peak Traffic
While the streaming media business is just a couple years old, Inktomi's invention might
already be changing the rules of the game.
If everything goes according to the grand vision of execs from Inktomi and CNN
Interactive, Inktomi-empowered ISPs would stream content for free for content provider
customers like CNN.
Today, CNN freely gives its content to companies like InterVU and Broadcast.Com, but it
still has to pay for bandwidth. Eventually, Mullig says, there might be a system similar to
cable, where CNN would charge ISPs for access to its content, but that is still a long way
off. Free distribution works well with CNN's business model.
"The more people that see [the content] the better, because we make our money through
advertising," Mullig says.
Since the main commodity for sale here is bandwidth, other ISPs can enter the space by
offering services to handle "peaks" - whiplashes in bandwidth consumption by CNN
Interactive users when there is a breaking news story.
Today, InterVU handles such peaks for CNN, but services like that come at a price that
CNN doesn't like to pay.
"Our traffic is much spikier than that of, say, a search engine," Mullig says. "We have 10,
15 times peaks over an average peak, which results in capacity engineering problems."
An average peak is normally 2-3 times normal bandwidth consumption, Mullig says.
Capacity outsourcing is something ISPs can help with. "Streaming is more of a
value-added service that people who start to do specialized Web hosting start to look at,"
says Inktomi's Brown.
Traffic Server
Last December, Inktomi unveiled a technology developed with Concentric Network [CNCX]
called Peak Performance, which enables Web hosters to oursource overflow traffic from
customers for a limited period of time.
Inktomi sees this technology as the most logical entry point of ISPs into the streaming
space.
With this technology a content provider like CNN could, theoretically, strike a deal with
InterVU to stream its video in the off-peak hours. Once the traffic picks up, however,
overflow traffic could go to any ISPs that currently have Inktomi's $24,000 Traffic Server
cache installed. The new $4,000 media cache module goes on top of the Traffic Server.
"If ISPs are able to do that, they will be in essence distributing live video streams," Mullig
says.
To put things in perspective, Inktomi's largest Traffic Server cache user is America Online,
which registers 2 billion hits a month. If AOL deploys the streaming media cache, it could
begin handling live feeds from CNN that would bypass InterVU's network.
"The same way [ISPs] do proxy caching today inside their networks for Web pages, the
same will be true for [media] streams," Mullig says. "Anybody whose business model is
built on charging for video streams will be affected if Inktomi is successful - if an ISP can
be a distributor and doesn't charge me for it - great!"
While ISPs, armed with Inktomi's caching solution, might entertain not charging CNN for
bandwidth, they would most certainly ask for a portion of the advertising revenues CNN
would earn from an ISP's customer base. When CNN officers asked EarthLink [ELNK] to
appear as a listing on its start page, EarthLink charged CNN a multi- million dollar fee.
(Monty Mullig, CNN, 404/827-3264; Kevin Brown, Inktomi, 650/653-2825; Harry Gruber,
InterVU, 619/623-8400.)
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