Date Posted: 4/23/1999
Broadcasters told to make Internet gains
Internet execs tout future revenue streams from video
It's time for TV broadcasters to jump into the video stream, Internet hardware and software executives asserted during the NAB convention last week in Las Vegas.
With the zeal of converts, executives who are engineering their Internet revolution said the current spotty quality of streaming video over the Web should not be a major concern. "It's not so much a question of if, it's a question of when," says Anthony Bay, general manager of Microsoft Corp.'s streaming media division.
People are already tuning in to Internet video, because viewers want their content when they want it, not according to a broadcast schedule, says Mark Cuban, who three weeks ago sold his Broadcast.com streaming-video and audio firm to Internet portal Yahoo! Inc. for $5.6 billion. And "how happy do you want to keep your customers?" he asks.
Don't worry about when broadband capacity will improve to near-broadcast quality, Cuban says. The telephone companies are working hard on it. Besides, Cuban says, "This is the worst video's going to get."
"We're not quite there with video, but it's the next big step we're taking," says Steve Mack, manager of RealNetworks Inc.'s New Media Lab. RealNetworks has 60 million users of its streaming technology.
By 2002, half of streaming-media users--including 20% of homes--will have access to the necessary bandwidth, RealNetworks Chairman Rob Glaser says.
Besides picture quality, other streaming concerns currently include security, rightsholders' confidence (or lack thereof) and ease of use, Glaser adds.
While the Internet will not replace over-the-air media, "it will be an important part of your revenue streams in the future," Cuban says. Instead of sending viewers who want to respond to ads elsewhere--stores, telephone numbers, or addresses, per the traditional broadcast model--Web broadcasters can control those dollars themselves by offering satisfaction with the click of a mouse.
Local TV stations already have a surefire way to hold onto their viewers: Their local content, the Internet executives said. Radio listeners and TV viewers who tune in via the 'Net listen to local content 60%-70% of the time, Cuban says.
But broadcasters may be missing an Internet opportunity by not realizing that the personal computer is the No. 1 media device at work, Cuban continued. A study of white-collar workers showed that while 9% have TVs on their desks and 32% have radios, 95% have PCs with Internet access, he says. "For just a minimal cost, you can maintain contact with that loyal customer" who watches TV at night and currently is without it all day at work, Cuban says.
There's a simple way for broadcasters to see the benefits of the Internet: "Streaming on the 'Net is just another way to deploy your content," says Steve Bannerman, senior production manager for Apple's QuickTime group. And Apple has just made a move to deploy that content more quickly. Last week it released a real-time streaming version of its QuickTime video software that plays live audio and video immediately rather than making the user wait until the video has been downloaded.
And, as always, "content is king," says Kim Glandon of Ivid Communications.
The Internet opens new revenue sources, such as corporate training and information and Internet pay-per-view, Bay says. The World Wrestling Federation has taken the lead on PPV and appears to be doing well, though it won't release numbers, he says. Streaming media also can add value to a radio or TV station's Web site, according to the executives.
While the industry is in its infancy, there's no doubt it is growing up quickly, Bay says. As evidence, he offers the fact that 2 million people logged on last Sept. 21 to view President Clinton's videotaped testimony in the Monica Lewinsky case. That was "one of the flagship moments when Internet broadcasting really came of age," he says.
The Internet train now is moving fast, the executives agree. "If you wait another couple of years to get involved, it's going to be really challenging," Bay tells broadcasters.
"It's going to get a lot crazier. It's not going to slow down," Cuban says.
"Real businesses are developing and real value is being made," Glaser says. "This is not just science fiction."
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