As a method of transmitting information, the Internet provides a wealth of opportunities. It wasn't long after the opening of the Internet to the general public that broadcasters and other media companies began considering how to distribute their content over the new medium and capitalize on the fresh business channels. Streaming media emerged as one of the primary methods by which these organizations broadcast their content in real time, requiring no massive and time-consuming downloads. By the early 2000s, most major media companies offered streaming media to supplement their other channels on television and radio. Television and radio broadcasters, in addition to making select features and archives available for streaming download, increasingly sought to provide live transmission of their content over the Internet, a process known as Webcasting.
ATTRACTIVE BUSINESS OPPORTUNITIES, BUT CHALLENGES ABOUND
As the Internet emerged as a central aspect of daily life in the United States, Americans spent greater proportions of their time online and, in so doing, increasingly accessed news and entertainment while plugged into the Internet. According to a report by Somerville, New Jersey-based Edison Media Research and the New York-based Arbitron Company, as of January 2001 about 61.3 million individuals—or 44 percent of all U.S. Internet consumers—had streamed Internet audio or video. Over 30 million Americans, moreover, accessed streaming media at least once a month. American Demographics reported that the demographic makeup of the average "streamie" was particularly attractive to advertisers, with approximately 46 percent receiving an annual income of at least $50,000.
Generating revenue from streaming media, however, poses problems akin to those of Internet content providers. Several options exist for purveyors of streaming media. Perhaps the most common revenue scheme was to fill the Web site from which the streaming media was accessed with advertising, bringing in money from other companies trying to catch the eye of its media customers. Pay-per-access was another, though less popular method, whereby customers agreed to pay a small fee for each individual access of a streaming media package. More commonly, companies provided subscription-based access privileges, which often combined access to streaming media with other value-added services and products.
As a model for making money, streaming media was likely to integrate elements of traditional broadcasting. For instance, Jupiter Media Metrix predicted in 2001 that streaming-audio advertisement revenue would reach $1.4 billion by 2004, meaning that streaming-audio networks will increasingly incorporate commercial slots into their programming. The 15-or 30-second commercial spots common on streaming radio and music stations in the early 2000s frequently accompanied and referenced onscreen graphics and banner ads for a multimedia advertisement scheme. The greatest factor behind the hesitance of advertisers to warmly embrace streaming-media marketing in the early 2000s was the fragmented nature of the audience. While Jupiter Research reported in 2001 that streaming audio was beginning to hit critical mass, there was little coherence across the audience base, while streaming video, thanks to lingering bandwidth limitations among the Internet populace, was still confined to a relatively small segment of Internet users.
Since the development of streaming media in the mid-1990s, both the compression qualities offered by software vendors and the bandwidth capabilities of the Internet have improved dramatically, resulting in greatly enhanced streaming-audio and-video quality. To stream audio or video content, it must first be converted to a digital format and compressed, or pared down in size so as to fit comfortably within limited storage space and to be transmitted without excessive delays. Usually, the content is streamed from a distributed network of servers rather than from a central point, since this method avoids clogging the server and allows for easier transmission to a number of users.
Bandwidth was a major concern to streaming-media providers. While broadband was the favored mode of streaming media, relatively few consumers had actually made the switch to broadband by the early 2000s. As a result, streaming media remained plagued by bandwidth bottlenecks at the receiving end of the transmission, often creating excessive delays and pauses in the transmission, and sometimes leading to its complete loss. The most frequent complaints lodged against streaming media, in fact, involved the choppiness of many of the broadcasts, in which the audio is momentarily scrambled or otherwise inaudible, or punctuated with skips and indecipherable noise or scrambled pictures. Producers and providers of streaming-media packages were thus encouraged to provide separate downloads catering to varying connection speeds.
The streaming-media software, stored on the user's desktop, connects with a server and accesses a streaming-media packet. Encoding software converts the media into compressed digital format, which can then be sent streaming to a media server. Because of bandwidth constraints, compression formats common for other types of media delivery are far too limited for streaming. Thus, a number of proprietary compression formats popped up in the late 1990s promising optimal streaming capabilities for specific streaming needs. The software player generally receives the stream and buffers several seconds of data at a time on the user's hard drive. Thus, these short media packets are played without interruption directly from the user's hard drive while further packets are downloading, leading to a continuous stream. This buffering helps alleviate some of the transmission glitches stemming from network clogging. In this way, lengthy downloads before the actual access of the media packages are altogether eliminated, allowing for immediate access as well as live Webcasting. Interruptions in the stream occur when, due to bandwidth or other technical shortcomings, the succeeding downloads take longer to complete than the downloaded packets take to play.
CONTENTIOUS MARKET, BUT A BRIGHT FUTURE
By the late 1990s, a handful of products emerged to dominate the market for streaming-media players, namely Microsoft's Windows Media, RealNetworks's RealAudio and RealVideo, and QuickTime. However, no clear standard emerged, and streaming media purveyors were obliged to gear their products to one or another software program, thereby fracturing the market and inhibiting the growth of streaming media. Gradually, streaming media solutions were manufactured for compatibility with more than one of these products, but the bitter rivalry between the software companies persisted.
Outside of traditional broadcasting and its attendant advertising, streaming media offered myriad other applications as well. While all uses of streaming media faced the same problems of distribution, it was finding its way into distance-learning programs, internal company training and communications, inter-business conferencing, and even the distribution of amateur films.
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SEE ALSO: Bandwidth; Broadband Technology; Glaser, Robert; RealNetworks