The End of Broadcast

Media-streaming technology is bringing high-quality video to the Internet. Get ready for change. In the early days of the World Wide Web--just a few years ago-- companies dreamed of sending content to millions of computer screens around the planet. PointCast and the similar start-ups that pioneered this idea applied technology--they pushed content onto the user's screen rather than waiting for the user to pull it from the server. But this technology failed to deliver what those users really wanted: digital-quality video and audio, on demand, over the Internet. Although the push business model may be dead, the goal of delivering high-quality video over the Internet lives on in the form of streaming, a hybrid that combines traditional broadcasting with the Net's on-demand environment (see sidebar state of the art, on the next page). Companies that deploy the streaming technology are using it to leapfrog old-guard broadcast and cable companies, which have been reluctant to bring interactivity to TV. In so doing, the attackers are stealing the broadcasters' dearest treasure: the audience. What, me worry? A sure indicator that a company feels threatened is the filing of a lawsuit. That is what CBS, Disney, Fox, the National Basketball Association, the National Football League, and others did in January 2000, when they joined in a suit against iCraveTV, a Canadian video-streaming company that takes the signals of US and Canadian broadcasters and streams them free of charge from its Web site, hosted in Canada. Similarly, Australian regulators, at the behest of the major free-to-air broadcasters, prohibited the streaming of video clips longer than ten minutes and have strictly limited the type of content that may be streamed. The defensive stance of the broadcast industry and the holders of content rights is easy to understand, since the media-streaming market is projected to grow from under $1 billion in 2000 to nearly $10 billion by 2005. Compare this with current revenues of around $40 billion for broadcast television and $37 billion for cable television. Streaming video is getting consumer attention as well. By the end of 1999, upward of 98 million users had downloaded the RealNetworks streaming player. In fact, more than twice as many people downloaded it in the first nine months of 1999 than in all of 1997 and 1998. Each of the top ten Webcasts of 1999 attracted more than 500,000 viewers. The year's top event, Paul McCartney's concert at the Cavern Club, in the English city of Liverpool, was streamed to more than five million viewers (Exhibit 1)--equivalent to the audience of the world's 90th-grossing movie in 1999. If the audience had been measured by Nielsen Media Research, the concert would have had a rating similar to that of a US TV show with a ranking between 50th and 100th in a typical ratings week. A scorecard for the players This uptick in market size has more than a few companies jockeying to become the dominant streaming service provider. Only 4 of these streamers had entered the market by the end of 1996; 8 entered in 1997, 12 in 1998, and more than 75 in 1999. Many, including iBeam Broadcasting, InterVu, and Microcast, are new companies dedicated to streaming. Others, such as e-Media and Webcasts.com, began their lives designing Web sites or applications and then moved into streaming. And a host of companies are targeting more traditional services to support streaming providers. Crawford Communications, for example, offers satellite uplink services to producers of Webcasts; Loudeye.com provides encoding services to the streaming industry; and Digex and Exodus Communications offer their hosting services to streaming companies. Finally, companies in completely unrelated industries--most notably Enron--are redeploying their assets to become media streamers. By far the most sought-after role is that of end-to-end service provider. …

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