Video streaming goes with the flow

Lack of bandwidth has kept video streaming apps to a trickle, but businesses are finding new uses for the technology.

Nothing illustrates what Gartner calls the 'cycle of technology disillusionment' better than video streaming. A few years ago, the one thing everyone in networking agreed on was that it would be the next big growth market.

But heady optimism quickly changed into gloom as it transpired that many of the original ideas for streaming media were not practical.

This was followed by a couple of years during which hobbyists experimented with the technology. Now companies are beginning to find practical uses for something that has previously been regarded as just an executive toy.

Today, the business applications are completely different from the services video streaming was originally supposed to supply. The idea of using it for outside business communications was soon dismissed because bandwidth continues to be prohibitively expensive in the UK.

But companies are widely using it internally, to the extent that the worldwide market for streaming media will be worth about £200m by 2006, according to research company Analysys.

Entertainment is another lucrative area, especially when used as part of a marketing campaign. Companies such as Mobile Entertainment are beginning to exploit this opportunity, winning big contracts from film and record companies to show clips.

The porn industry has always been a good channel for new technology and companies are talking about delivering adult entertainment to mobile phones.

However, it is difficult to envisage commuters downloading porn onto their mobiles on the 6:57 to East Croydon.

Investor information

Demand for video streaming services will be driven by the need for corporate communication, training and marketing, according to Analysys. One increasingly popular application will be in delivering company information to investors.

Video streaming is already improving investor relations by giving investors access to stirring addresses from the chief executives of the companies they've backed.

Renewed enthusiasm for the technology has contributed to a 90 per cent growth in video streaming traffic. Revenue from these services is increasing annually by 50 per cent, a trend that is expected to continue until 2006. But, according to Analysys, the real spurt of growth will come in 2005.

This lucrative market will be even stronger when all the businesses with ecommerce sites start to realise the potential of video, explained Philip O'Ferrall, European vice president of video streaming vendor Oplayo.

"Anyone who has been involved in web commerce projects could get involved," he said. "The big ecommerce project boom is over, and some of the web shops and integrators have fallen by the wayside. Video streaming could provide them with a new lease of life."

Mark Blowers, senior research analyst at the Butler Group, has a more jaundiced view of the streaming media market. He believes that to make money, you're much better off providing a service for which you get paid up front.

"This is definitely one for the future, but there's a long way to go. Still, if big corporates have the internal bandwidth, and they want to put streaming media in internally, that's their decision," he said.

If companies want to pay you to install video streaming as a means of delivering training videos it is all well and good, but they might be better off sending out a VHS to everybody.

What inevitably happens with streaming media is that they have to send a technical support person out to every desktop. "There are usability and compatibility issues yet to be resolved," said Blowers.

Analysts at Yankee Group agree, insisting that the video streaming market for e-commerce in the UK will be severely hidebound by the lack of available bandwidth. It will not take off until broadband networks have been more widely adopted, warned Amy Prehn, an analyst at the firm.

Network infrastructure

"Streaming media has become established as a viable delivery channel for complex applications," she said. "It avoids significant delays, since the entire file does not need to be downloaded. But the technology will be effective only when quality high-speed networks are in place."

Quality is also dependent on bandwidth provision. "Streaming media files are highly sensitive to quality degradation due to packet loss, latency and network congestion," explained Prehn. "They effectively require a robust network infrastructure."

With the collapse of several of the UK's competitive carriers, however, it looks increasingly unlikely that this will come about. Sounds like a technology you should avoid, then?

Not so, according to twofourtv, an integrator that has been working with video streaming vendors such as Real Networks and Oplayo for about five years. Chief operating officer Mark Hawkins claimed that streaming media is a far more effective method of offering training than giving everyone a VHS tape.

"The difference is that the streaming media goes to people at their desk, whereas a video is watched passively while you recline on the sofa. Which do you think is more likely to engage the viewer?" he asked.

Since trainees have a keyboard in front of them and can interact with the training package, Hawkins argued, the word 'viewer' doesn't even apply to streaming media films.

Besides, twofourtv isn't in the business of selling streaming media. "We have to deliver tangible benefits to customers," he said "And what they increasingly ask for is some method of broadcasting, whether it's an internal message for the chief executive to the workers, more effective training or just selling products more effectively.

"All we do is find out the customer requirement and see how best to deliver it given the various constraints. Often, streaming media is the best solution to those requirements."

Cutting through the hype

There's too much cynicism about the technology, according to Phil Fearnley, director of new media technology at BBC Ventures, one of the commercial arms of the BBC. The company is a hosting and streaming partner of Real Networks, offering managed services to businesses.

"The problem was the way video streaming was initially hyped," he said. "It was seen as a technology that was going to earn everyone a fortune, but people were soon asking what's the point of it.

"If they thought it was a clunky way of delivering content it's probably because streaming was being offered where it shouldn't have been."

The industry is now more mature and focused, he argued. The IT channel would be a great industry sector in which to offer training by video streaming and could be a great proving ground.

After all, vendors and distributors are always desperate to train resellers, while resellers rarely have the time to attend classroom courses.

However, vnunet.com's sister publication Computer Reseller News couldn't find a single UK distributor or vendor that would consider using this method for training. The nearest we found were 'webinars' conducted by 3Com.

If the IT industry doesn't believe in this solution, why should anyone else? IBM is a rare exception. In the US, the company has saved $20m by moving 70 per cent of its training online.

After 11 September, when people were reluctant to travel, online training brought in massive cost savings on travel, hotels, materials, coffee and all the other paraphernalia that goes with a day out of the office.

Final frontiers

The frontiers are expanding too. Real Networks, whose founder, Rob Glazer, left Microsoft to pioneer this technology, recently introduced the latest version of Real One. The company describes it as a "three-pane" experience.

At the top left is the video clip, at the top right is the pane showing content and information and at the bottom is a browser.

"You could be watching a five-minute clip about the new Jaguar while performance information flashes up on one screen and the list of local dealers' websites is enticingly laid before you on the third," explained Real Networks' Richard Jenkins.

The company has appointed Avnet and Computers Unlimited to help it find reseller partners in the UK, and is convinced that there is enough opportunity to go round.

Then there are the original equipment manufacturer agreements. IBM and Sun Microsystems, for example, have seen the value of differentiating themselves from the competition by making pSeries and Solaris boxes available as delivery mechanisms for streaming.

Real Networks is spending money on training and developing opportunities for its nascent channel, proving that it is confident that there's a market out there.

Meanwhile, one of the streaming video vendors sees mobile networks as the big growth area. Unlike Real Networks' video player, which has to be downloaded, Oplayo's can be run from a browser.

Since it is less processor intensive, it can be run on a mobile phone or personal digital assistant, which opens up a whole vista of opportunities, such as the use of mobile phones for business presentations, according to the company.

But are we seriously going to use our Nokias for a one-to-one with the chief executive? Or allow our mobile's batteries to be flattened by some salesman's 120-page presentation? Is this taking us into silly marketing territory again?

Not according to Oplayo's O'Ferrall. "Mobile streaming can deliver all kinds of things and we're at the bottom of a potential curve," he said.

Downloading images of World Cup goals onto mobiles and watching the replays is one application which has proved popular with mobile users, according to O'Ferrall.

"OK, it will be pretty dull to start with," he admitted. "But big organisations are working out the potential use for Compaq's iPAQs. They could be used by sales people, for example, to display information about products and help them complete sales."

Streaming media is still creating more excitement than many other sectors. Every week it seems that a new video player is launched.

For end users, the potential for saving money by developing a new communications channel seems solid enough. And resellers and integrators are guaranteed their income, since they aren't taking any risk with the technology but are merely installing and configuring it for clients.

Flash in the pan?

Nevertheless, one nagging doubt remains. In the present market, companies are only spending on staples such as storage and security. And even established players in those markets, including InTechnology, are struggling to show a profit. Who needs flashy applications such as video streaming?

Jenkins sees a bright future for streaming media. "People don't know about it," he explained. "Once companies have consolidated and got their infrastructure in, they will need the applications to run over them.

"All the work on getting networks, storage and hardware and software platforms right is a pre-requisite to running streaming media.

"It will be the next big application. Giving staff training on digital media, and access to it on their desktop, will change their views. It will turn people around. As soon as someone spends 10 minutes looking at the technology, they can work out how they can save money.

"Wait till next January when companies are due to do their 'big bang' and bring all their staff in from all points for sales training, and you'll see how quickly they could get a big return on their investment."

Well, it sounds pretty impressive; maybe more people should know about this. Perhaps he should broadcast that speech to all the end users and the channel. But hang on, does anyone watch those corporate videos?

CONTACTS:

RealMedia 9 (020) 8228 1547
www.real.com

Oplayo (020) 7947 3417
www.oplayo.com

twofourtv (01752) 334 700
www.twofourtv.com

BBC Ventures (020) 7765 4748
www.bbctechnology.com

Butler Group (01482) 608 380
www.butlergroup.co.uk

IDC (020) 8987 7100
www.idc.com

Analysys (01223) 460 600
www.analysys.com

Mobile Entertainment (01628) 524 702
www.mobile-ent.com