Once seen as a pipe dream, streaming high quality audio-visual presentations over the Internet are becoming increasingly prevalent in the US, with a balanced focus on bandwidth and content driving its adoption. In Australia, emerging channel companies in this space are banking on an increase in user adoption this year, but two major barriers still stand in the way: the success of streaming media rests largely on the adoption of broadband and the development of innovative content.
The chicken or the egg scenario
The most obvious reason why streaming media in Australia is lagging behind the US is bandwidth. Only a small number of "early adopters" have broadband connections in the Australian home, where 56Kbps dial-up networks are the norm. There has been a lot of blame thrown around the industry, with the Federal Government and Telstra copping the most flak. Despite the validity of much of this argument, it could be said the criticism is self-serving, as the critics have the most to lose if users stay on dial-up connections.
"The state of broadband adoption is hurting us here," said Frank Arrigo, Microsoft Australia's business development manager. "Not only is it expensive to deliver these services, but it is either expensive or impossible just to receive them."
Analysts share a similar view, but are confident the tide is turning. Sue Uglow, telecommunications analyst at research company Ovum, suggests the uptake of streaming services depends on the availability of local access to broadband. Uglow doesn't expect digital subscriber line (DSL) connections to make a significant impact until 2002/2003, before the price drops low enough for widespread adoption in 2004/2005.
"The limitation is where the eyeballs are," said Stephen Johns, marketing director of Web hosting service provider WebCentral. "You always have to cater for the lowest common denominator - in this case the people hanging off a 56Kbps modem. It brings down what you can achieve."
And this problem is not restricted to the connection itself. Nicholas Jouan, business developer for LakoVision, a distributor of digital streaming and editing products, believes there are other delivery issues to be addressed.
"The problem isn't just the type of connection," he said. "A lot of people have installed cable modem or ADSL, but they have a proxy from someone like AOL that slows it all down. It's like having a motorway from your home to your garden and then hitting a country road."
Of all the spokespeople for the emerging industry, it is the channel that is showing the most enthusiasm and optimism. Brian Walshe, general manager of Digital Media at Praxa, provides consulting and integration services around streaming media and believes companies like Telstra and TransACT are providing enough marketing resources to ensure his business unit will be kept very busy in the next 12 months.
Walshe subscribes to the theory that it is not necessarily bandwidth that will drive the adoption of streaming media services. Instead, he predicts the content and applications will advance to the point where they drive broadband adoption.
"It's a chicken and egg question," he said. "Do you need the cable or the content to drive the technology? People don't need high bandwidth connections just to speed up their surfing. Above a certain point, the speed of your connection becomes immaterial to how fast a page loads. I think applications will drive the demand for higher bandwidth."
Walshe has good reason to adhere to this theory. Much of the pessimism regarding the necessary bandwidth for streaming services is related to the failure of several media streaming companies in Australia during last year's dot-com crash. Internet radio stations, for example, were major victims. BigFatRadio.com, a streamed radio station featuring the talents of ex-Triple J presenters Michael Tunn and Helen Razor, fell apart in November due to a lack of funding. A similar fate was handed down to youth portal K*Grind, SpikeRadio and Internet talk-back station Talk Australia.
Among all of these failures, one streaming radio station has survived. thebasement.com.au, operating out of Sydney's Circular Quay, contains some banner advertising and gains additional revenue from several sources, but receives a large proportion of its funding from Telstra.
The Basement station is of high audio and visual quality and also features high-profile presenters. This expensive operation is funded by Telstra as a showcase to potential subscribers to its ADSL services. It appears the experience of thebasement.com.au on a high bandwidth connection is a deliberate driver for broadband adoption, proof that Walshe's "chicken and egg" scenario has its merits. For streaming media to be worth the channel's attention, there needs to be both high-quality bandwidth and content.
Taking local content to the world
The opportunities for channel involvement in streaming media revolve around services rather than sales. This is mainly because the consumer application, the "player" software for viewing content, is generally available free on the Internet (eg RealNetworks' RealPlayer) or bundled with operating systems (eg Windows Media Player).
At the delivery end, there are opportunities for the distributors and integrators of editing, encoding and server-based tools (eg Express Data distributing RealNetworks server products).
"Internet streaming is the fastest-growing market place in the IT industry today," according to Lako Vision's Jouan. "It's going to become commoditised and increasingly popular over the coming year."
Jouan sees streaming media services becoming increasingly popular among Internet service providers, training and education companies and large corporations who want to deliver information to geographically spread staff.
In response to this expected demand, Microsoft has set up a "Windows Media service provider program" in Australia to support partners experienced in hosting, encoding and streaming. At present there are only 15 companies involved, but this number is expected to significantly increase in the next 12 months. The 15 current channel partners are a mix of traditional Microsoft integrators, like Praxa, and new channel companies emerging from the audio/visual production industry like Streamworks, an arm of the Beyond film and television production company.
Similarly, Web hosting providers have taken an interest in the technology. For example, WebCentral has launched a range of streaming services for developers and customers of its Web hosting services, providing continuous streaming, priced per user and per megabyte, as well as one-off services for the streaming of live events.
"It's not as popular as it could be," said WebCentral marketing director Stephen Johns "We added these streaming features to encourage people to look at rich content on their Web sites."
The standard issue
One of the major issues affecting both channel opportunities and user adoption is standards. For the past couple of years, three proprietary products for streaming media have stood out from the vendor pack. The first is Apple's QuickTime, which LakoVision's Jouan believes is providing incredible interactivity, with the latest versions offering linking from within video presentations. The second is the technology of RealNetworks, whose Australian office was launched in 1999, being distributed by Express Data. RealNetworks has signed a joint-development agreement with Nokia, which guarantees that by next year Nokia phone users will be able to receive streamed information on their mobiles. And finally, there is Microsoft's Windows Media Player.
While RealNetworks charges in the order of $US4999 for a 500-viewer streaming server licence, the Windows media equivalent is free when customers purchase Windows 2000. This strategy, according to Microsoft's Arrigo, is about "maintaining the relevance of the Windows platform".
"Microsoft is trying to popularise the technology," said Praxa's Walshe. "If you're charging big dollars, it's hard to get something like this up and running."
Jouan believes Microsoft is intent on ensuring its standard is more widespread than its main rival's and is following a similar strategy to the way it popularised the Internet Explorer browser over its major competitor at the time, Netscape.
"This is entirely different," Arrigo retorted. "In the browser space, you had to use one browser or the other, but in this space, multiple players can co-exist."
One recent development would suggest the opposite, as the rest of the industry is struggling in the absence of an open standard. At the recent Streaming Media West event in the US, several vendors agreed on the forming of the Internet Streaming Media Alliance (ISMA). The goal of the organisation is to unify content partners and infrastructure vendors around open standards in streaming media. Among its founding members were Apple, Cisco, Philips and Sun, but notably absent was Microsoft and RealNetworks. Arrigo confirmed Microsoft was invited to join the group, but declined the invitation, claiming its own R&D teams already had more advanced technology than the group would be working toward.
Arrigo claims the ISMA was formed around the original MPEG layer 4 standard, a standard he feels is becoming outdated (though Microsoft is working on a revised third version of this standard at present). He believes the standard Microsoft is working on provides a better user experience at lower bandwidth and an optimised user experience at higher bandwidth.
Fishing for answers
Arrigo suggests that, despite the notable failures Australia has seen in recent months, there will be a large increase in streaming media adoption this year, and channel partners have a huge opportunity. "You need a mass audience to be successful in the kinds of broadcasting the Internet radio stations were attempting," he said. "Narrowcasting to a niche audience will prove much more successful."
Walshe is confident the efforts of the Praxa team in the last 18 months will pay off when customers start seeing the business benefits of the technology, and start making purchasing decisions in a few months. "At the moment there is nothing out of the box that can do everything," he said. "There is no one answer to your prayers." Richard Hair, regional technical director for network software vendor Inktomi Asia-Pacific, agrees. "There has never been the cost-effective tools and applications available until now, so people are naturally a little gun-shy."
Like Jouan, Walshe sees the content industry as being in the driver's seat in determining what streaming technology is adopted as an industry standard.
"The winner will be the technology that offers the same quality at lower bandwidth," he said. "The people who own the networks want to use less and achieve more."