The (Small) Business of Streaming Media

Martin Hayward of Mirror Image suggests another model that may help small businesses: the content aggregator.

"When we get inquiries from small companies and they ask about our services and what the cost is, we do mention that our minimum fee is $1,000 per month," says Hayward. "If they can’t afford the cost, we never just turn those small companies away; we’ll do whatever we can to recommend someone else that can possibly help provide them with a solution, including content aggregators."

An aggregator buys the minimum chunks of bandwidth or storage space from a CDN and then sells it in smaller chunks at a higher rate.

"Streaming media is still, in our opinion, in its infancy," says Jerry Scheibeler, vice president of sales for Nine Systems, one of the leading content aggregators. "We’ve only scratched the surface of the number of clients that will be using streaming media as a primary form of communication, training, marketing, and media distribution in the future. Aggregation has worked well in the discount Web hosting market and we have no reason to expect that it will not be a part of the larger CDN picture for streaming media."

To further address the needs of small businesses that are able to afford the $1,000 minimum, some CDNs are looking to pricing models from other industries. Mirror Image has created an innovative pricing plan based on the cell phone industry. Called the TotalValuePlan, this Mirror Image service allows for "rollover minutes" that reward long-term small business customers with the flexibility of moving minutes from month to month.

Another tip offered by at least two CDN representatives is leveraging innovative streaming content to appeal to the CDN’s desire for publicity. I faced a similar problem during a benefit concert held for Hurricane Katrina victims on Labor Day in 2005. When an article about the benefit concert appeared, listing the URL of the stream, the interest in the concert from around the world caused bandwidth usage to jump dramatically. Sonic Foundry, whose product was used to record the concert, heard about the concert and offered to host the content free of charge; Sonic Foundry even wrote a press release about the event and the use of their product, which further drove interest in the streaming content.

Mirror Image’s Hayward shares a similar story. Noting that CDNs need compelling content that they can tout to select markets they’re targeting, he noted that Mirror Image stepped up to host content that was about to receive enormous attention.

"Early in 2005, Mirror Image hosted a series of clips for a Norwegian company called the Active Child Aid Foundation," says Hayward. "The company produced a film titled The Children of Leningrad, which was up for an Academy Award in February 2005. Mirror Image delivered the video for the company to offload the expected traffic their Web site was going to see as a result of the Academy Awards. We did this at no cost as a way to provide exposure to the plight of these children and the filmmakers who were chronicling their plight." (It goes without saying that Mirror Image also received exposure from the arrangement.)

Dan Ushman, head of operations at midPhase—a discount Web hosting company—says his best advice for small businesses that want to stream is to start small. In many cases, the small organization will find that a Web hosting service is the right middle ground between hosting their own content and partnering with a CDN.

"People sometimes have really big eyes," says Ushman, "and ask for dedicated servers and rates starting in the $1,000-plus monthly range. We can usually provide dedicated machines in the $150 per month range that would be more than adequate for the small business that wants to test the waters of streaming."

Summary
Streaming is growing in all sizes of business—multinational, mid-sized, and small. Options for small businesses to use streaming for advertising and marketing are also expanding, but a small business needs to know how to adequately address the growth potential and initial phases of its streaming endeavors. Streaming service providers understand that small business customers have the potential to turn into large business customers, so each provider offers a unique approach to meeting the demands of the growing segment of small businesses seeking rich media tools for marketing and advertising.