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Making Streaming Work

by David Fox

A seminar report from Streaming Media Europe 2000.

Streaming video on the Net may not be making many people money, but some companies have found a way of making it work. Silicon.com, for example, is not only the largest e-business newswire in the UK, but it is now launching in Germany and France, building IPTV studios in Munich and Paris. It transmits five or six news shows a day and while only about 4 to 5% of its traffic is video, the rest is text, some 25 to 30% of the time spent at the site is viewing programmes. As a site which would traditionally be text-based, its CEO, Rob Lewis, believes video helps differentiate them from their rivals.

He sees streaming as ideal for business-to-business services as people at work rarely have a TV on their desk, but they do have a PC. "To deliver profits, you have to go back to basics. On the Web, personalisation is the key selling point. It has to be on-demand and deliver to the individual user," Lewis told a seminar at Streaming Media Europe 2000.

"The whole basis of the Web is that it is a one-to-one experience and if we can deliver an individual to the advertiser we are going to make a lot of money," he said.

Silicon.com started streaming two years ago, despite the fact that no one had high speed Internet access, but as that emerges in Italy, France, Germany and the UK, he believes streaming is becoming essential. He maintains that Websites must at least experiment with streaming, because their competitors will be.

However, "there is no point having a Website dedicated just to streaming media. We need to have Websites dedicated to individual areas and have streaming media a part of their content," he added.

Michael Meister, CEO, Scoopstation, agrees that Webcasters need to pitch to a very specific group. For example, in Denmark, it does a fly fishing programme that would normally only get a very late night half-hour slot on broadcast TV. In the same way special interests support a huge number of highly focused magazines, but only a few general interest newspapers, Websites have to go for niche markets. "This is not the time to be too ambitious," he warned.

"You have to figure out how to produce for this medium. When TV first came out, radio producers tried to put their shows on TV, but realised TV had a lot more to offer. The Internet is at the same stage now," Bill Moses, president of the content delivery network, Net36, told delegates at Streaming Media Europe.

"Compelling content will draw consumers," he said, in the same way that exclusive sports rights sold satellite dishes for BSkyB. Once the content is there, he believes consumers will move to broadband, which will in turn drive more content. However, "you can't forget what people will be watching the Webcast on," said Moses, so you can't just show them TV programmes - unless it is something they couldn't watch otherwise. One of Net36's applications is transmitting German news to the large German community in South America, using the global PanAmSat network.

In the music market, the pressure for streaming is coming from the consumers, said Paul Sanders, director, State 51 (which is building an interactive production facility in London), and music companies are having to deliver a seamless experience and overcome the "mayhem of the illegal music market," he said. "If you run a music site and you don't have streaming, you are out of the game already." According to research, "consumers are willing to pay a small price to watch a music video," but it must be a simple transaction.

Moses sees distance learning, corporate training and product support as becoming big markets for streaming. Sanders believes consumer-to-consumer streaming will take off. "At the moment, consumers can't afford it, but we're beginning to see aggregated c-to-c sites for films," and he expects that to grow rapidly.

One problem with streaming, at present, is that companies have to get broadcast professionals excited about making programmes for very little money, although Lewis believes that it is worth investing in high-end studio technology. Silicon.com puts out its programmes with just one person in the studio gallery.

Sanders finds that although streaming rate card prices are incredibly high, there are always deals to be done and others who will share costs. For its coverage of the Glastonbury music festival, it did a deal with the QuickTime TV Network so it didn't have to pay for bandwidth. Similarly, Scoopstation shares costs with its 75 or so content partners. While there is little profit in the business today, Sanders maintains "it is far more important at the moment to create the experiences to gauge user requirements."

Over the last few years, Lewis has seen "bandwidth costs go through the floor. People like Level 3 are laying huge amounts of fibre. There is intense competition and I expect costs to plummet tenfold over the next year," he said. Although there are few broadband connections now (about three million in the US - divided 2:1 cable to DSL), Moses believes we are now entering a very steep growth curve.

Back to the top.

Successful Streaming - how to get it right.
Streaming Gets Reality Check - keynote speech by Martin Tobias of Loudeye at Streaming Media Europe 2000
Making money from your streaming media websites - you want business models? we got business models.
Webstation: Gritted.com - how one post house launched its own Web channel.
Akamai - leading edge streamers!

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David Fox