Microsoft streams against tide

Microsoft (MSFT) is boosting its NetShow software but is swimming against a strong current in the streaming media market.

Today, Microsoft posted the latest version of its streaming audio and video server, NetShow 2.0, which features improved live broadcasting and better picture quality. The NetShow server closely integrates with the Windows NT Server operating system and Internet Information Server Web server.

In spite of its success in the browser market, Microsoft has not yet made a significant mark in streaming media, even though its server software is free. Rival Progressive Networks appears to remain firmly in control of the audio streaming market and is poised to do the same with video streaming with its new RealVideo technology.

Streaming audio and video allow users to listen and view clips as they are being downloaded. Other media, such as WAV and QuickTime files, requires users to first download the files before playing them.

Progressive Networks claims that 15 million copies of its RealAudio player have been downloaded from its Web site since 1995. In contrast, Microsoft executives estimate that 200,000 copies of the NetShow client have been download from its Web site since September.

The number of NetShow clients in circulation is almost certainly much higher since the software is bundled as an option with Internet Explorer and is distributed by independent Web sites. However, judging by the audio format supported by most Web sites, Progressive Networks is still in the lead.

"It is an uphill battle to introduce a new product in a market with a leader that has a head start like that," said Shannon Perdue, a product manager at Microsoft.

But Perdue believes that NetShow's tight integration with Windows NT will make it an attractive, easy-to-use alternative to other streaming media servers. With NetShow 2.0, Web sites can also deliver live "unicasts"--in which separate streams are transmitted to each user--in addition to "multicasts," in which a single stream is broadcast to users over certain networks.

One of NetShow's biggest customers will be Microsoft. The company announced today that MSNBC, which it jointly owns with NBC, will use NetShow for broadcasting business TV news and other data through its Web site.