In 1999 streaming technology could do no wrong. Internet radio and TV stations were starting up across the globe, and leading-edge firms were trying out new forms of e-learning and corporate communications using streaming technology.
Even Madonna and David Bowie thought it was cool to do live web-streaming versions of their concerts.
But that was then. Numerous internet broadcasting businesses have come and gone, and the pop world's IT agenda has moved on to the pros and cons of pirate downloading.
To the average punter, streaming remains an attractive idea. However, it is tinged with bad experiences of bandwidth problems, jagged images, lost connections and the not-so-exciting prospect of watching CNN in a frame about the size of a matchbox.
And all this against a backdrop of hundreds of channels of digital TV, a DVD explosion and a film and TV industry scared stiff that it is about to get mugged by the video equivalent of Napster.
Having destroyed Napster, the Recording Industry Association of America is now spending millions of dollars chasing individuals who they deem to be the worst illegal download offenders.
But it's not all gloom and doom. Streaming remains an opportunity for resellers willing to develop expertise or find the right partnerships to develop offerings that are attractive to customers.
Every day thousands more broadband connections are installed and the two main suppliers of streaming products, Microsoft and RealNetworks, have just released a slew of new products that are raising quality standards to new levels.
According to research house Strategy Analytics, the number of western European households using broadband internet connections doubled last year.
The UK has 1.4 million subscribers with that figure increasing by 30,000 a week, according to UK telecoms regulator Oftel.
Meanwhile, BT claims that it has lowered the number of registrations needed for some telephone exchanges to be converted to broadband in a bid to speed up its roll-out. BT has reduced the threshold for 388 exchanges and also set 'trigger levels' for a further 87 areas.
The expert view
But what do the market analysts say? Cambridge-based telecoms analyst Analysys predicts that the streaming market will be worth £200m by 2006.
Instat/MDR is far more bullish, estimating its value at £1.2bn by 2006, with 69 per cent of that being in the enterprise.
The market for products and services is made up of the core technology providers (Microsoft, RealNetwork, Apple), the internet service providers (ISPs), infrastructure providers, internet broadcasters and resellers. Points of entry include production, encoding, storage and broadcast services.
In addition, there is growing interest in helping content providers with digital rights management (DRM) and providing content delivery networks to ensure dedicated routes for streaming services.
Analysys claims that there are many options for resellers, including providing equipment, software, training and support to enable companies to create and provide rich media content in-house.
Applications range from business TV and live business events, through to distance learning and surveillance, and hybrid broadcasting services.
The coalface is occupied by firms that specialise in streaming applications, sometimes known as internet broadcasting firms.
London-based FlyOnTheWall is perhaps typical of many. It has been in the business for three years and offers a range of services including live and on-demand webcasting.
Its customers include Harrods/LG Electronics, JP Morgan and Orange. The company has signed a deal to co-promote streaming products with Tiscali, notably for streamed events.
Jason Gleave, FlyOnTheWall's chief executive, is upbeat. "Now that broadband is finally rolling out, more and more companies want to produce streaming events and training," he said.
"I think the industry is coming of age, with renewed interest from agencies and consumers."
But Gleave admits that there are still problems, such as bandwidth, companies' attitudes to downloading video and lack of innovation in training.
"Companies must begin to see the importance of online learning and develop the infrastructure so that there aren't any bandwidth problems relating to streaming to the desktop," he explained.
"Firms such as Oracle, which has 4,000 hours of streaming material for training, are pointing the way."
London- and US-based Anystream also sees the lack of broadband users as one of the biggest problems.
Colin Birch, new-media specialist at Anystream reseller Tyrell, said: "The problem is in the local loop and the lack of connections. I don't know what the critical mass would be, but we have a dozen customers ready with material to encode.
"They are not prepared to go ahead because there is not enough demand to create a market of content aggregators to make it worthwhile."
However, Birch believes that there is a more positive outlook at the top end of the market.
"The top finance and banking firms have created a specialised market for streaming things like shareholder meetings, and there are specialised resellers targeting that market," he said.
"The key point is that the quality levels of the final product are less important than the need for immediate information, so it's a market that is solving a real problem and is not too fussy about the image quality."
Tiscali represents one of the more proactive ISPs in the streaming arena. It recently announced a range of products through its Business Services subsidiary, targeting all elements of the streaming business from basic clips on a website to large-scale streaming events and pay-per-view, including DRM, under a banner called 'StreamSequence' solutions.
Mark Harris, Tiscali's head of streaming media, maintained that the company will significantly increase its reseller base.
"We expect to have 10 to 20 new partners within the year and believe it is attractive for them because they can create attractive bundles and add margins to pay-per-view services that give them a new revenue stream," he explained.
In December, Tiscali announced partnerships with FlyOnTheWall, Westminster Digital, DMD Secure and AVT Group.
Tiscali claims a market edge by nature of a wholly owned content delivery network which, according to Harris, "brings private network performance to global internet viewing".
The company is also targeting mobile users. "We can do pay-per-view to mobiles. Video on demand to PCs is only part of the jigsaw," said Harris.
"It's important to work with someone who understands content delivery and rights management when you are dealing with paid-for services.
"I think resellers need to think about the benefits of bundling streaming with their existing sales."
Microsoft vs. RealNetworks
But will the streaming market remain as competitive as it is now? Some critics suggest that RealNetworks is facing a slow death, likening it to the manner in which Microsoft squeezed Netscape out of the browser market.
The latest figures from US-based NetRatings put RealNetworks and Microsoft pretty much neck and neck, with 17 million versus 15.1 million in-home viewers respectively.
The twin engines behind the whole industry is the parallel development of Microsoft's Windows Media Player and RealNetworks' Helix initiative.
Like the browser wars with Netscape, Microsoft is once again demonstrating its ability to come from behind in market share to its current position of roughly equal status. But more on the streaming wars later.
George Fraser, director of media streaming at RealNetworks Europe, rejects comparisons with Netscape.
"I have a wry chuckle when people suggest that we are like Netscape. We are different. We continue to innovate, we already charge for products and have a successful pay-per-view service," he said.
"We have incentives for resellers and our total cost of ownership looks really good."
Fraser believes that more resellers will enter the arena. "Our challenge is to find resellers in education, enterprise and media. They need to be active in one or more of those areas," he explained.
Currently, RealNetworks works closely with Stream UK, Rednet and 21st Century Communications. It also works with Freeserve, the first ISP to put all of its media products onto the Helix platform.
RealNetworks' technology is also embedded in caching solutions from Cisco, Valera and Network Appliance.
But although RealNetworks promises to be giving details of a significant school-based project in 2003, it cannot provide any case studies of enterprises.
This perhaps confirms what visitors to its website may conclude: that it is a firm spending most of its time and money on dominating the consumer market.
Meanwhile, Microsoft remains master of the art of marketing, gaining lots of media coverage and value-add reseller interest with its Windows Media 9 platform.
This includes new versions of Windows XP Media Player and Movie Maker and sees the firm licensing its media delivery software for non-Windows operating systems for the first time.
According to Microsoft, Windows Media 9 delivers video at up to six times the resolution of DVD.
It also includes a Smart Jukebox feature that lets users manage a collection of up to 10,000 songs and offers faster access to the audio and video library.
The platform supports fast streaming, which consists of instant-on/always-on streaming for broadband users, and supports 5.1-channel surround sound streamed across the web at speeds of 128Kbps.
All that matters to most users is that better video encoding now means a playback of 30 frames per second, which is still jerky but demonstrably better than before. Microsoft estimates that 450 million media players have been distributed so far.
But critics have suggested that there are gaps in the technology for corporate users, notably that the DRM technology has yet to be linked with Active Directory for centralised administration and control.
In addition, some of the technology, such as improved video motion compensation, is available only in Windows XP.
Meanwhile, the big news with RealNetworks is its shift to Helix, a partial open source approach to encourage proliferation of its products. This includes the Helix platform, product suite and the new Helix universal server.
The server's benefit is that it supports all the main streaming formats: RealMedia, Windows Media, QuickTime and MPEG, although it lacks support for MPEG-4.
It is worth noting that the open source philosophy goes only so far. Support for the proprietary RealAudio and RealVideo codecs will be available in object code instead of source code.
The company has also set up a developer community site at www.helixcommunity.org to improve direct access to Real engineers.
Research house Instat/MDR tips Microsoft to dominate the market with the 9 series, with a later challenge from MPEG-4, which will then take the lead.
It sees the Real open source approach as a shift in business plan towards becoming a service provider, with the continued growth of its RealOne network.
Industry watchers are closely following the activities of the Internet Streaming Media Alliance, which includes Apple, Cisco and Sun Microsystems. It is now finalising the technical specifications for MPEG-4 security and rights management.
Perhaps proponents of streaming need to do more to address corporate fears that the availability of streaming in the workplace leads to abuse.
Interestingly, RealNetworks' RealOne subscription service gains the highest usage rates in the US between 10am and 3pm.
Recent research commissioned by website MSNBC reported that 37 per cent of workers surf for news during the working day and that streaming news services are often selected.
But increasingly firms are using network management products that block access to file sharing sites, auctions sites, games sites and, not surprisingly, streaming sites such as Channel 4's Big Brother.
As quality increases and broadband becomes more pervasive it seems logical that streaming products and services will gain widespread acceptance.
But it remains to be seen whether the benefits resellers will receive for servicing this market will merit the investment required.
GOING WITH THE FLOW
Telecoms analyst Analysys lists several options for resellers entering the streaming market:
- Providing the equipment, software, training and support to enable companies to provide rich media content in-house.
- Providing high-bandwidth networking.
- Providing solutions for creators and receivers of rich-media content.
- Working alongside service providers to supply consultancy and services.
- Assisting with content creation.
Analysys (012223) 460 100
FlyOnTheWall (020) 7381 5500
Microsoft (0870) 601 0100
RealNetworks (020) 7290 1200
Tiscali (080) 8118 1835
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