As networks work to improve Webcast quality, clients need revenue now

While Internet content plays have attracted investors and media attention alike, an equal flood of interest (including major tech players like Intel and Microsoft) has financed the streaming media revolution.

One recent example: The May 17th IPO for net broadcaster iBEAM was a recent Wall Street favorite. The company’s current market capitalization is more than $1 billion. Stories like that have prompted 70 of the top 100 websites to offer some sort of streaming media because of its ability to tantalize, attract and hold viewers.

Cambridge, Mass.-based Akamai Technologies, Inc. is one of the larger streaming media distribution networks. Their customers are site owners such as ABC.com, CBS’ Sportsline, HoopsTV.com and Paramount Digital Entertainment. For live events, the company offers an end- to-end solution.

Jami Axelrod, Akamai’s senior product marketing manger explains that 4,000 servers are positioned worldwide, guaranteeing a reliable video stream.

As the technology is perfected, the question then becomes: “How do we monetize clients’ events?” “By adding pay-per-view, e-commerce and interactivity,” says Axelrod.

Akamai streamed more than 1,800 hours of content for the official Cannes Intl. Film Festival site during the event. Other film world clients have discovered the advantage of video streaming as part of their marketing strategy.

Gordon Paddison, VP of worldwide interactive marketing and development at New Line Cinema, chose to outsource the infrastructure of serving up the trailer for “Lord of the Rings” (www.lordoftherings.net) by using Akamai to cache the content on its regional servers.

“We worked with our international distributors in each country to hype the event,” says Paddison. “Because of the global demand for content, it would have seriously diminished the user experience if we had hosted it inhouse.”

And the numbers bear him out. The “Lord of the Rings” trailer downloads have been impressive: 1.7 million in the first 24 hours, 6.6 million in one week and 10 million in 21 days. In comparison, “Star Wars: Episode I — The Phantom Menace” trailer racked up 3.5 million trailer downloads its first week.

Best of both worlds

Ideally streaming media networks can achieve Webcasts that combine the quality and scalability of traditional broadcasts with the customizable and interactive power of the Internet.

“The Internet is a fundamental new way to access media and personalize it. My content when I want it, my Yahoo of media,” enthuses Tom Gillis, VP of marketing at iBEAM, the Sunnyvale, Calif.-based Netcaster.

IBEAM has strategic deals with America Online, Excite@Home. Its investors include Sony Corp., Microsoft and Intel DSL provider COVAD. iBEAM has inked customers such as MTVi, MSNBC, AtomFilms and BBC World News.

Gillis maintains that iBEAM has garnered such relationships because of proprietary technology allowing it to insert streaming ads into streaming content, standing out among Netcasters.

As a result, iBEAM is experienceing a “hyper-growth rate,” serving up 20 million megabytes of content in the last quarter, a tenfold increase over the previous one.

San Francisco-based Digital Island will webcast 1,400 events this year and Adam Cohen, vice president of streaming, says their Footprint Media Service has monetized streaming successfully.

“The key to making money is in services, not just delivery and encoding. We drive the audience to content, and generate revenue through syndication and ad insertion, leveraging the power of a sponsor.”

For ‘N Sync’s “No Strings Attached” March CD launch, Digital Island served 400,000 streams during a Webcast and syndicated the content to 75 partner sites. The event was also heavily promoted through radio spots.

Such events helped Digital Island secure $45 million from Microsoft, Intel and Compaq earlier this year.

The next big hurdle, according to Cohen: digital rights management, specifically how content providers will manage payments to artists and entertainers. Considering the chaos happening online with music, there are significant revenues at risk.

A few of the other players in the streaming-media sector include Intel’s recently launched Internet Media Services; Microcast, which has signed with AT&T for access to its bandwidth network; Burst.com; and, coming in 2001, ArrayCom’s i-BURST, a wireless internet system that aims to provide portable broadband access and applications, including video streaming.

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