Streaming Media Market Trends
PreviewStreaming technologies enable users to receive video, audio, or other multimedia presentations without the need to download files to their own computers. Streaming media first gained attention even before the wide use of broadband access. It let users begin accessing multimedia files before they were completely downloaded, a distinct advantage over its predecessors. While the largest driver in the streaming media industry is consumer demand for music and video, enterprises are finding that streaming media allows gives them the ability to deliver large volumes of data to customers, suppliers, and the general public. While problems concerning copyright issues and royalties are still being worked out in the consumer sector, enterprise users continue to find new uses for the technology. Report Contents:
Executive Summary[return to top of this report]Streaming media has become an integral part of the Internet experience for both consumers and enterprise users. Streaming media entails virtual real-time files that can be executed without time-consuming downloading. The use of standards will become more important in the streaming media marketplace. Until recently, major media players were not able to play streams created by another vendor’s architecture at all. Because of this incompatibility, content providers were forced to support all major media players, while users had to choose a default player and ensure they were continually downloading the latest updates. Streaming technologies allow users to view video, audio, or other multimedia presentations without the need to download files to their own computers. Broadband access goes hand-in-hand with streaming media, saving time. Furthermore, streamed files are not saved locally on a recipient’s computer, providing built-in copy protection. Technologies contributing to streaming media include content creation software, media players, and content delivery network (CDN) providers. The major players in both the content creation and media player categories are Apple, Adobe (formerly Macromedia), Microsoft, and Real Networks; Akamai is the clear leader in CDN providers, but other leading vendors in this category include Mirror Image, and VitalStream (formerly PlayStream). Market Dynamics[return to top of this report]Streaming media entails virtual real-time files that can be executed without time-consuming downloading. The technology of streaming voice and media files live on the Web came about in the mid-1990s. As with other Internet technologies, this one owes its market growth to those that preceded it. Progressive downloading technology, starting right along with the advent of the Web, first allowed users to download audio and video files from the websites they were viewing. Unfortunately, it also required lengthy downloading times, made even lengthier by the widespread use of dial-up access, often at ridiculously low speeds. Push technology soon followed, allowing “pushing” requested content, such as stock quotes, to users’ desktops and easing download times somewhat. Streaming media first garnered attention even before the wide use of broadband access. It allowed users to begin accessing multimedia files before they were completely downloaded, a distinct advantage over its predecessors. Because downloading is still a part of accessing the data involved and speed is an important factor, however, broadband is probably the largest driver in the use of streaming media. Broadband access continues to increase: according to recent data released by the Federal Communications Commission (FCC), the first half of 2004 saw an increase of 15 percent in the number of home and business broadband lines in the US to 32.5 million. Possibly the largest driver in the streaming media industry is the insatiable consumer demand for music and video. Exacerbated by the brouhaha surrounding peer-to-peer networking and users’ rights to share copyrighted material, streaming music and the Internet sales thereof have since developed into an ever-increasing industry of their own. Webcasting is both a result and a driver of streaming media technology. It allows transmitting visual and/or audio presentations online in real time, so that they can be accessed simultaneously by an unlimited number of users, much the same way as radio and television broadcasts are heard and viewed. The use of standards will become more important in the streaming media marketplace. Until recently, major media players were not able to play streams created by another vendor’s architecture at all. Because of this incompatibility, content providers were forced to support all major media players, while users had to choose a default player and ensure they were continually downloading the latest updates. This is a gradually improving area; some “crossing over” of players has been happening for a while. The biggest influence in standardization comes from the International Organization for Standardization (ISO), whose Motion Pictures Expert Group (MPEG) has defined a compression technique that has become a video format. MPEG-4, the latest version, uses Apple’s QuickTime as its basis. Therefore, adherence to ISO’s related standards--3GPP and 3GPP2--by any streaming video vendor provides automatic compatibility with QuickTime. Additionally, a non-profit group called the Internet Streaming Media Alliance (ISMA) hopes to soon make bigger strides with a specification it believes will bring interoperability and compliance to open standards for all three parts of streaming: encoders (used to compress the audio or video signal), servers (which allow control over the number and quality of the streams sent), and players (which decode received data into a signal for audio or video). Version 2.0 of the specification became available on January 11, 2005. Market Leaders[return to top of this report] The streaming media market comprises various sub-categories, of which desktop media players and content delivery network (CDN) providers, also sometimes known as streaming service providers or content delivery service providers, play the largest roles. Desktop Media PlayersDesktop media players decode received data into a signal for audio or video by using specific codecs. Standing for “compression-decompression,” a codec allows the proper playing of audio or video in a particular format. Player vendors also produce specific software for developing and producing the media that play upon them. Players may be standalone applications or software plug-ins for Web browsers. Generally downloadable at no charge (although the software used for creating the productions they play must frequently be purchased), they are compatible with standard browsers and are usually available for both Windows and Macintosh environments. Market leaders in this area are Apple, Adobe, Microsoft, and Real Networks. Apple Computer. QuickTime--first developed for the Macintosh, but now equally popular for Windows platforms--was the architecture upon which the MPEG-4 codec was based. Apple boasts that QuickTime offers strong support for standards, but in actuality, the standard has been formulated from the product. QuickTime has had more than 250 million downloads (98 percent for Windows platforms), but because that number does not indicate actual number of users, its meaning is debatable. However, the QuickTime player is also distributed in digital cameras; software for the education and entertainment markets; music CDs that also include some video; as part of AOL; and also as part of other Apple software products, such as Final Cut Pro, for non-linear editing of digital video, and iTunes, for Apple’s own immensely popular iPod. In fact, counting all these sources, Apple estimates that there are over a billion QuickTime players in the market. Adobe (formerly Macromedia). Although Flash is a plug-in and not a technically a desktop media player, its ubiquitous use justifies it as part of this category. Who has not witnessed a Flash presentation upon arriving at a Web site? Macromedia states that in the US, 98 percent of desktops with an Internet connection have Flash Player, with similar numbers in Canada, Europe, and Asia. Another difference between Flash and other players is its customizability, allowing developers to totally control their audio and video presentations’ appearance. The development product, Flash 8 includes prebuilt templates to ease content creation. Microsoft. As with so many other technologies produced by Microsoft, its Windows Media Player (WMP) is a market leader primarily because of being bundled as part of the various Windows operating systems. Released in September 2004, the latest version, WMP 10.0, is compatible only with Windows XP. In an interesting development, the European Commission filed and won an antitrust case against Microsoft, forcing the end of bundling in European versions of Windows XP. Following the loss of an appeal, Microsoft agreed to begin shipping a WMP-less version of XP in January 2005. While Microsoft’s leadership in the Windows arena is not surprising, neither is its position of also-ran on the Macintosh platform; WMP is available only in version 9.0, and Microsoft has not announced plans for an upgrade. RealNetworks. RealNetworks’ original products, RealPlayer and RealAudio, were first released in 1995. Now with a variety of related products (and up to version 10.5 of RealPlayer), the company claims billions of downloads. RealNetworks’ strategy includes deals with major cell phone manufacturers--beginning with Nokia back in 2000 and also including Sony Ericsson--making RealPlayer the default media player on cell phones with video capabilities. The company is also making strides in the European market by bundling its Helix player with Linux-based operating systems. Real is the only media player compatible with Linux, which is considered an up-and-coming operating system, especially in Europe. CDN ProvidersThese companies use an intelligent distributed network to deliver content, including streaming media, to a Web audience. This causes fewer buffering and time outs, providing greater reliability. Leading CDN providers include Akamai (the undisputed leader), Mirror Image, and VitalStream. The CDN industry has been rampant with lawsuits, in which leading vendors repeatedly have sued each other for stealing trade secrets and patent infringement. Speedera sued Akamai; Akamai sued Speedera; and most recently, Mirror Image sued Speedera. To deal with conflicts with Speedera, Akamai purchased the rival company.Akamai. Akamai is generally considered the thousand-pound CDN gorilla, the leader in its field. The vendor handles 15 percent of all Internet traffic and boasts over 1,000 customers, including US government agencies such as the FBI, the Homeland Security Department, and the Department of Defense. Akamai’s streaming resume is also impressive: during the summer of 2004 alone, it handled Web video streaming for both the Republican and Democratic National Conventions, the Olympics, and Major League Baseball. The company has over 14,000 servers deployed in 1,100 networks in 70 countries. Mirror Image. Mirror Image’s network resources are located worldwide in 23 specific “content access points" (CAPs). Services include on-demand video, live Webcasting and event production, media conversion, and Flash video streaming. The company has patented its architecture, which uses caching of content on specific servers for quicker download to end users and combines multiple caches into a single entity. VitalStream. VitalStream uses a geographically distributed network and supports popular formats including QuickTime, Windows Media, RealMedia, MP3, and Java Streaming. Through an alliance, the vendor’s network provides direct connections to backbone providers including MCI, Sprint, Cable & Wireless, AT&T, Verio, Level 3, Global Crossing, and Qwest. This allows dynamic adjustment of routing tables to the Web’s changing traffic patterns. Additionally, VitalStream gears services to small and medium-sized companies with the use of a pay-per-view payment processing solution. Market Trends[return to top of this report]Fueled by both business- and consumer-oriented drivers, the streaming media market is growing. For example, Alexa Research estimates that every six months, the amount of streaming media on the Internet increases more than tenfold. Other reports place the streaming media software market at more than $800 million USD by 2007. In March 2004, media and marketing research firm Arbitron released a study with interesting streaming-related results. According to the study, 108 million Americans (44% of the population) have used Internet broadcasting in one way or another at least one time. Other results indicated:
Another study by AccuStream iMedia Research noted an increase of streaming video in 2004 of about 130 percent over 2002, while still another report states that in the first two months alone of 2004, video streams served by the top ten sites increased to 523 million from 292 million in 2003. AccuStream iMedia further reports that music videos, news, and sports content are the most highly viewed categories of streaming media. Its studies indicate that during the first half of 2004, of the 5.6 billion streams served, over one-third were music videos, while about 18 percent (down from 28 percent the previous year) were news and information videos and over 15 percent were sports videos. The increase in streaming media demand has influenced at least one major ISP’s product offerings. AOL’s subsidiary, Singingfish.com, offers a search facility geared to helping users find available audio and video on the Web. Additionally, AOL offers closed captioning for streaming media to its hearing-impaired members. Strategic Planning Implications[return to top of this report] Within an enterprise, streaming media technology is most often used for knowledge sharing and e-learning (also known as distance learning), adding to an organization’s ability to better communicate with its employees and customers alike. It is also gaining in usage in the advertising field, as companies find that streaming their ads on Internet sites or as part of Internet broadcasts is perhaps even more effective than radio or television advertising.Knowledge SharingCustomer service and support has become an important segment of the streaming media market. Upon the advent of the Web, businesses quickly learned that self-service customer support saved them money. Posting service-related documents where customers could easily locate them precluded the need for intervention by service personnel. These savings, and customers’ problem-solving capabilities, have been increased by the use of streaming media. Instead of interminable call center wait times, customers prefer watching explanatory video clips online. Using streaming video and audio to explain product functions benefits both businesses and customers, saving money and increasing satisfaction. E-LearningBusinesses can utilize streaming media to deliver seminars, presentations, and training to employees via their desktop, either live or on-demand, reducing both expenses and wasted time. Similarly, educational institutions can provide coursework online, and the use of on-demand content further expands the educational reach. Adding voice and/or video demonstrations to static presentations has been proven to reduce learning curves of even difficult-to-understand material.AdvertisingIn spite of the negativity spawned by such Internet phenomena as viruses, spam, and phishing, Web advertising has proven itself successful. A survey conducted by the American Advertising Federation found that industry leaders expect online advertising to double by 2007. That growth is not limited to the US; Jupiter Research reports that Europe’s online advertising market grew by 30 percent in 2004 and is expected to increase in 2005 by another 28 percent. Now streaming media is making an additional mark on advertising, even affecting pop-up ads, which now sometimes have voice streams attached (although their effectiveness--and annoyance factor--has yet to be determined). Further, a report by AccuStream iMedia Research in 2004 forecasts that stream-based advertising revenue will reach $864 million in 2005.Whether streaming media’s influence on Internet advertising will help it exceed conventional radio and television advertising remains to be seen. It is already definitely making headway in that direction; a study by the Stanford Institute for the Quantitative Study of Society (SIQQS) in June 2004 found that the average Internet user spends nearly twice as much time online (three hours) as watching television (1.7 hours), making the market ripe. About the Author Cristopher O'Kennon spent eight years as the Commonwealth of Virginia's expert in Web Usability and related technology. As the driving force behind the Virginia.gov portal, the Commonwealth won multiple awards for the site and other online services. He has been a freelance writer since 1991 with publications such as Government Technology. Web Links[return to top of this report]Akamai: http://www.akamai.com/ [return to top of this report] |