Commentary: Streaming Matters

As readers of my past commentaries on StreamingMedia.com might note, I’m not keen on defining streaming as an industry. I choose instead to call streaming a delivery tool in much the same way that FM, cable, and satellite are delivery tools used to deliver multiple types of programming and content.

I’ve debated this viewpoint with several key streaming leaders, and felt comfortable holding the position that our success will stem from streaming being disseminated into tens or hundreds of different vertical markets rather than from streaming growing into an industry. Yet several events over the past two weeks have caused me to reassess my position, and while I’m not yet ready to say we’ve made it into the "industry" phase, I am comfortable for the first time saying "streaming matters" if the aggregate of the four recent events noted below indicate that streaming is surging toward ubiquity.

The Microsoft/RealNetworks deal
Last week saw the end of a bitter dispute between two powerful streaming media rivals. As you’ll read in an article from Dan Rayburn next week, Microsoft has settled with Real. If the story only ended with Microsoft paying a lump sum of cash to Real, it would be newsworthy enough. But to me the telling point--the point that makes me say "streaming matters"—is that Microsoft has promised ongoing promotion for Real’s software in its MSN service. Real’s ability to spread the word about its streaming tools at the expense of its rival reveals how important streaming is becoming.

Major announcements from Apple
Apple also announced two major products last week that incorporate streaming and progressive downloads as an integral part of their consumer appeal. Much has been and will be written about the video iPod, but at its core is iTunes 6, through which Apple has found a way to deliver progressive downloads at a price point that will resonate to a legitimate paying customer base.

The more compelling story for streaming, however, came earlier in the Steve Jobs presentation, when he revealed the new iMac G5. Not only does the new iMac ship with an integrated iSight videoconferencing camera--which effectively cuts by half the entry-level price for desktop-based videoconferencing—it also features a new media player called FrontRow. Besides the standard fare of playing back audio, stills, DVDs and QuickTime movies resident on the computer, Front Row gives users the ability to access Apple’s movie trailer site through a MediaCenter-like interface and watch these movie trailers full-screen, streaming in real-time from Apple’s site.

While this is not the first time movie trailers could be viewed at full-screen resolution on a computer, it appears to be the first time the average consumer can switch seamlessly and unwittingly between local and streaming content. In this instance, streaming matters because the lines between local and remote content have been blurred considerably.

Streaming radio's continued growth
I also recently attended a regional venture forum on behalf of a business incubator client. While at the event, I ran into Steve Newman, CEO of Knoxville, Tennessee-based Eonstreams. Newman told me that his company’s recent sales indicated that radio stations which had once considered streaming media anathema were now embracing it in record numbers, and were committed enough to the streaming radio format that they were investing in robust streaming audio ad insertion tools like the ones Eonstreams offers. Steve likened streaming radio’s rise in prominence to the early days of stereo FM, which was denigrated to second-class "throwaway bandwidth" during the heyday of powerful AM stations, but ultimately became the larger revenue generator.

Encouraging findings from comScore
Another announcement this week also caught my attention: a research firm released findings from a recent analysis of streaming media viewing habits. According to comScore Media Metrix, "more than 94 million people in the U.S., or 56 percent of the domestic Internet population, viewed a streaming video online" during the survey period. The research findings went on to say that the average consumer viewed 73 minutes of streaming video content per month from April to June 2005.

The research revealed two other pieces of key information that led me to think that streaming matters: while the motion picture industry revealed two weeks ago that the summer box office dropoff was led by the young male (18-34 years of age) segment, this same segment also led the way in the number of minutes of online video consumed (84 minutes vs. an average of 71 minutes for other viewers). More importantly, for those engaged in streaming for the corporate and enterprise verticals, the highest overall viewership occurred between 10:30 a.m. and 4:30 p.m., the heart of the business day. That suggests that streaming is no longer on the periphery of business communications, but squarely in the mainstream.

"This research confirms that streaming video is now part of the Web experience for a broad base of consumers," said Peter Daboll, president and CEO of comScore Media Metrix. "This technology is changing advertising on the Web, by allowing richer, more emotive connections between brands and consumers."

None of these events alone will cause streaming to hit hypergrowth and turn into an industry in the near term. But the consistent pervasiveness of streaming across many vertical markets continues to grow at a respectable pace, providing clear indications that streaming matters and will continue to grow in prominence for the foreseeable future.