March 31, 2003 1:47 PM PST

Streaming video hits prime time

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Streaming video is coming of age as numerous Internet news and entertainment outlets tout new programming and combined subscription services geared toward broadband audiences.

Online publishers have been fielding unprecedented demand from visitors for streaming video feeds related to the conflict in Iraq since it began about two weeks ago. But war coverage offers only the starkest sign of a broad reversal of fortunes under way in the industry.

In a major coup for Net broadcasting, Major League Baseball began streaming live video of games on Monday as it opened the 2003 season. MLB's decision to stream video of games highlights a surge of interest in streaming media thanks to technology improvements and the arrival of faster Net connections.

"Video has hit a tipping point, much the way audio did a few years ago," said Michael Gartenberg, research director at the New York-based firm Jupiter Research. "Now we have access to good, meaningful content that's viable, as opposed to stuff as proof of concept."

The confluence of live war coverage and a bevy of new streaming video services online is thrusting Webcasting back into the limelight after years of failed efforts or false starts. Improvements in broadcast quality and reliability have helped convince reluctant consumers to open their wallets for online content, a shift that in turn has lured content owners to test Internet distribution.

In one illustration of the rising demand, streaming media powerhouse RealNetworks said traffic for video and audio on its RealOne subscription service has risen fivefold over normal levels since the start of the war, and people are watching video online for greater lengths of time.

Mainstreaming
Web destinations are jumping on the bandwagon, sprucing up streaming media programming through new paid services aimed at broadband subscribers. On Monday, America Online unveiled a new version of its service with a bevy of multimedia offerings, including sports video and movie trailers, among other things. Earlier in the month, Yahoo launched its multimedia Yahoo Platinum service with live video feeds of the NCAA basketball playoffs.

Other recent announcements include these:

• On Feb. 15, ESPN.com launched a video service of sports highlights, largely for broadband subscribers. Called ESPN Motion, it's docked more than 1 million downloads since its debut.

• On March 12, ABCNews.com began offering live video coverage to RealOne subscribers and through its own paid online service. A week later, it licensed content to Yahoo Platinum and to BellSouth's broadband service.

• On March 19, News agency Reuters unveiled Raw Video, a free 24-hour streaming video service on its Web site, offering footage of the U.S. military campaign in Iraq.

Ryan Jones, an analyst with The Yankee Group, said that as the number of broadband households nears 20 million, such media properties have started to consider the high-speed Internet market to be mainstream, and a major revenue opportunity.

Technology improvements, faster computers, faster connections and greater hard drive capacity have fanned the flames of consumer demand for Internet video and improved the economics of streaming digital media to consumer desktops. Final releases of advanced streaming media technology from Microsoft, Apple Computer and RealNetworks have helped to cut the bandwidth costs in half for many services, helping to drive adoption by media and entertainment providers.

Costs remain an issue, however, and many of the new video offerings are available only to paying subscribers.

ABCNews.com spokeswoman Julie Summersgill said that by putting its video behind a subscription wall, the company has been able to offer higher-quality feeds with wider coverage. That the service lets people access video on demand is a new draw, too. Some people, for instance, have played and replayed Diane Sawyer's recent interview with Whitney Houston, in which the pop star says, "Crack is whack."

"We're making an incremental step toward being an Internet news network. Still, we're more like C-SPAN than CNN," Summersgill said. The company recently said it expects to reach profitability by the end of 2003 on the service.

Although many Web sites require fees for access to video, rival publishers including CBSNews.com and MSNBC.com are giving it away. Betsy Morgan, spokeswoman for CBSNews.com, said that the company does not believe streaming video must be subscription only. "There is an ad-supported market for streaming video...in the long term," Morgan said.

Rich Sabreen, executive vice president and global head of media for Reuters, said that its new video feeds are a turn toward the future for the company and a means to communicate directly with viewers. The service, which has drawn about 258,000 visitors a day since Monday, will require people to pay a subscription or register with the site at some point, Sabreen said.

"It's transformational for our company to be able to put video out on the Web like this," Sabreen said. "It's an essential part of what we're doing going forward."

"Prior to this time, watching video was a painful experience," he said. "Now it's a rich, normal experience."

A turning point
Yahoo's recent broadcast of the NCAA basketball tournament through its Platinum service marked a turning point in the industry because it was one of the first mainstream media events aired on the Web in competition with television broadcasts.

"Stakeholders in the streaming media space used to spend their time fretting over different technologies," said Jones, the Yankee Group analyst. "Now they're behaving more like real media businesses, focusing on content and revenues."

Streaming video has become popular for coverage of the Iraqi war. In general, major news sites have seen an 82 percent increase in U.S. visitors on March 24 compared with previous weeks, according to Internet news researcher Comscore Media Metrix. At-work audiences, which primarily access the Net with a high-speed connection, were the most concentrated readership.

In another example, ABCNews.com's Summersgill said that the number of people accessing the site's video feeds tripled in the period March 19-23, versus the comparable five-day period in the preceding week. The length of time people spend watching video has increased by 125 percent, she said.

Scott Ehrlich, vice president of media acquisition and distribution at RealNetworks, said that live news feeds from ABCNews.com and CNN.com have dominated usage of the RealOne service. ABCNews.com, for example, lets people choose from four different live video feeds of the Iraq war from a page called the "quad viewer." CNN has added live coverage to its service over the last couple of weeks too.

"Clearly the Internet has a history of turning points around major news events, such as the Monica Lewinsky story, in adoption of the medium. This could potentially be a turning point for aspects of the Internet such as streaming video," said Ehrlich.

Streaming media has already found one sweet spot beyond war coverage--sports.

On opening day, MLB.com and its affiliate baseball league Web sites drew about three times more traffic from areas across the country than the same time last year, fielding as many as 3 million page requests per hour at peak times. As a result, the interactive arm of the professional sports league had to have its service provider, Cable & Wireless, bring in additional servers at points around the country. Before added servers were set up, New Yorkers' access to the site slowed to a crawl because of the high demand.

Subscriptions to MLB.com's live video and audio service, with Web-only postgame shows, are also rolling in, according to MLB.com spokesman Jim Gallagher. He said the company expects to sign up 25,000 paying customers this season; and it has already reached half that number. In addition, nearly 50,000 visitors watched each of the nine spring-training games aired via Webcast in past weeks.

"There's more live audio and video on this site than on any other site on the Web," Gallagher said. "We're getting more visitors because of a combination of more broadband users (and) the enormous amount of exclusives and multimedia products on the site. And baseball is the American pastime--people are looking for a positive diversion."

 

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