Streaming is a method of transmitting online audio and video files for immediate playback, in which playback begins even before all of the file's data packets have traveled over the Internet to the user's computer. This characteristic makes streaming media distinct from downloadable media, which is slower to launch and requires that files be downloaded completely before they can be seen or heard, which in turn requires large storage capacity on the end user's computer. With streaming, the only thing that is downloaded is a small buffer file that takes about ten seconds to arrive over most Internet connections; the buffer prevents playback delays that can otherwise result from network congestion. No part of a streaming media file is stored on the user's receiving device, which again makes it different from downloadable formats such as MP3, .WAV, and .AIFF. Streaming media can be delivered from Web or intranet media servers, across broadband channels such as cable and digital subscriber (DSL) lines, or via satellite and can be received and played on everything from PCs and laptops to cellular phones and personal digital assistants (PDAs).
The term “streaming” was used in the early 1990s to refer to a method of online information delivery that allowed text to appear on Web pages quickly. Graphics were allowed to fill in more slowly afterward. This innovation was first used by Netscape in its early Web browsers, allowing Web surfers to read articles on a page while waiting for data-heavy images to show up over slow-loading dial-up modems. However, in 1994, ex-Microsoft executive Rob Glaser redefined the term to name the data-compression and delivery model for audio and video that allows rich media files to play while many of the file's packets are still traveling over the Internet to their destination. Before the launch of Progressive Networks' first RealAudio player in 1995, streaming in this sense was impossible. Audio and video files had to show up in their entirety to work, much in the same way that email attachments still function. And with the modems of the time, multimedia delivery was painfully slow. Streaming media worked almost instantly, and as a result quickly found a large audience after the July 1995 launch of RealAudio 1.0 and its Real media servers.
RealAudio heralded a new phase in the development of the Internet. Soon after its release, radio stations began popping up all over the Internet—both standard “terrestrial” stations that simply streamed their on-air signals over the Internet, and numerous online-only radio competitors. Before long, television stations, educators, and online retailers like Amazon.com and CDNow.com all began using streaming media as a genuine multimedia platform on the Internet. Musicians started giving live concerts for Web-only audiences. Movie studios began streaming their promotional trailers online. For the first time, the Internet had become, at a practical level, more than just text and still pictures.
Despite streaming media's popularity, however, the relatively high cost of producing quality video and audio, and fear among advertisers and media companies about supporting it prior to wide consumer broadband Internet adoption, have combined to stifle the development of solid streaming-media business models. At the same time, the streaming-media model is being challenged by the very format it was designed to overtake, downloadable media. So-called “fast download” services such as the peer-to-peer file-sharing systems (which include Morpheus and KaZaA), and commercial subscription services such as RealNetworks' own MusicNet and the record-label venture Pressplay (the latter two of which combine streaming and downloading services), have proven to be a big business challenge to companies hoping to ride the streaming-media wave to newfound riches.
Streaming-media pioneer Progressive Networks was the brainchild of Rob Glaser, the son of a social worker and a printer, born in Yonkers, New York. An energetic and driven man in his mid-30s who at one time served as the youngest vice president at Microsoft Corp., he reportedly resigned from Bill Gates' software giant after losing an internal struggle over control of Microsoft's multimedia operations to another company executive, Nathan Myhrvold. In 1994, he launched his own company, which has proven to be as much a challenge to crucial parts of Microsoft's Internet business strategy as Netscape and America Online have in other contexts.
According to an August 1999 article in Wired magazine, Glaser, fresh from his departure from Microsoft, took some of his accrued millions, hired three programmers, and set them loose to find a way to deliver audio and video over the Internet without the excruciatingly long waits that had been the norm up to then. Glaser had heard about new technology that made fast multimedia delivery possible, and his programmers set about designing the needed software. He started relatively small, concentrating on tiny, tightly compressed audio files that people could hear in real time, even using the 14.4kbps (kilobit per second) modems that were in popular use in 1994 and 1995. However, upon completing the first version of his RealAudio player, Glaser and his team reportedly did not realize the value of their innovation, initially leaning toward creating a progressive, politically conscious company that would mix the Internet with television to bring socially conscious content to the Internet; they hoped to create what BusinessWeek magazine suggested would have been a kind of cross between MTV and PBS.
However, after the RealAudio software was developed, Wired reported in 1999, Glaser and Progressive Networks' co-founder David Halperin went to Washington, D.C., to discuss their plans with several liberal advisers. After demonstrating the technology by streaming the signal of a baseball game from a server in Seattle to Glaser's laptop in D.C., Glaser and Halperin were convinced to drop the political focus and build a streaming-media software business. Glaser was encouraged to donate a percentage of his new company's proceeds to favored charities instead, and he has done so ever since.
For many on the Internet, streaming was both a revelation and a minor disappointment. The signal of the earliest RealAudio feeds was weak and hollow, sounding a little like an AM radio signal being piped through a wind tunnel, and they often enough would break down, and the stream would halt. Still, RealAudio worked well enough to make it obvious to early users that multimedia on the Internet could indeed be more than a frustrating side application, and could propel the Internet to new heights. The differences between what had been available before and what streaming could do were immediately apparent to anyone who had ever tried to listen to a .WAV file posted to a Web site. Using a 14.4kbps modem, it took about seven minutes for a 30-second snippet of a song to arrive and play, but that same file, streamed, would play in about ten seconds.
Glaser was rewarded for his success with a company that for several years dominated the streaming-media market, along with a personal fortune that, in February 2000, was listed at about $5 billion (it later tumbled to about $385 million with the dot-com collapse of 2001). In 1999, Wired magazine reported that about 85 percent of the streaming media flowing across the Internet used Real technology. (By then, Progressive Networks had been renamed RealNetworks.) Even as recently as September 2001, about 50 percent of streaming media was formatted for Real software.
Among those who noticed Glaser's momentum was Microsoft's Bill Gates, who arranged in 1997 to have Microsoft license the RealPlayer version 4.0 source code for $30 million, while spending another $30 million on a 10 percent stake in the company. But the alliance was short-lived. Soon, Microsoft dropped its stake in the company and began developing its own player, Windows Media Player—which, because it was bundled with a new version of Microsoft's operating systems, instantly gained a major slice of the streaming media marketplace. The streaming war was on. In January 2000, The New York Times quoted the Nielsen/NetRatings Web measurement service's numbers indicating that, as of November 1999, 8.9 million people, or 12.1 percent of Internet users, were using various versions of RealPlayer. Microsoft's Windows Media Player was far behind at the time, capturing only 2.4 million users, or 3.2 percent of the market. With that audience, the Times noted, it was not even in second place, but was well behind Apple's QuickTime player software, which had 5.4 million users, a 7.4 percent market share. A year later, the situation had shifted radically. According to a January 2001 Jupiter Media Metrix report, RealPlayer software remained the market leader, representing 28 percent of all multimedia streams used, while Windows Media Player had gained significantly, with 24 percent, and QuickTime players represented 4 percent. Many people, of course, have all three players (and possibly others) on their computers, and their usage therefore depends on the media formats that Web sites offer. Many sites place streaming files online in both RealPlayer and Windows Media formats, allowing users to choose their favorite. By now, almost every major broadcaster now streams content over the Internet. CBSNews.com frequently Webcasts news stories to accompany its text articles, and MSNBC.com, CNN.com, and ABCNews.com all do the same. Online versions of newspapers like the Washington Post and The New York Times frequently stream news features from the Associated Press. Original, online-only financial-news video can be found in streaming format on sites like Finance.Yahoo.com, while many educators use the technology to conduct live distance-learning classes. Major corporations stream presentations of their quarterly financial reports to analysts and reporters online, while other businesses use streaming media to save on travel expenses by Webcasting live business meetings to far-flung employees and clients over the Internet. For many, streaming media is a normal part of a day on the job. Even as more operations make streaming media part of their online rituals, however, there is evidence that interest among Web users has peaked. A January 2001 Jupiter Media Metrix study indicates that streaming-media usage levels plateaued during 2000. Forty percent of PC-equipped U.S. homes reported using a streaming-media player in January 2000, a number that rose to only 47 percent in November, the research firm said. “The type of content has not changed, and there are a lot of great things to do with your computer,” analyst Robert Hertzberg told Newsbytes. “Streaming media is competing with activities like Web surfing, sending e-mail and, for that matter, watching television.” Perhaps the most important reason for this plateau is that broadband Internet connections over copper DSL lines, cable, and satellite systems have been adopted slowly by U.S. consumers, and most still use 56.6kbps dial-up connections. The problem with dialup connections is that streaming signals tend to fade and break up the longer they run, particularly during times of high network congestion, whereas an online radio listener with a DSL connection is likely to be able to listen in all day without losing the signal. Analysts like Hertzberg think that the wide adoption of broadband, a phenomenon still expected to be years away, might be the needed remedy to make streaming media a strong business. By 2003, Jupiter Media Metrix has predicted, about 23 percent of Internet-connected homes in the United States, about 15 million households, will have broadband access. “This is one of those markets that other pieces have to come together to take off,” Hertzberg told Newsbytes. “Until broadband is widely distributed, the experience of streaming media is not going to be that great, especially video. This is also a chicken-andthe-egg problem, however, because content providers need to see that broadband is widely distributed before they push out content.” Streaming media, despite its many challenges, is not likely to disappear, according to a 1999 white paper by ViewCast Corp. Demand is there, the paper notes, especially among broadband users. Once broadband reaches critical mass in the marketplace, that demand will only accelerate, ViewCast predicted, particularly because streams of video—usually regarded as the most compelling media form—will attain a clarity and quality that only broadband users can now appreciate. “And video,” the white paper stresses, “gives sites a great way to attract and retain visitors.” The stakes are very high. The New York Times reported in January 2000 that the ongoing war between RealNetworks and Microsoft for supremacy over the streaming-media market not only presages the direction that online audio and video will take, but also may map out the future of television, films, music, and other media in the coming era of convergence. “By most accounts,” Times reporter Matt Richtel wrote, “convergence is still many years away. But it could mean huge business for the companies that sell software to media distributors.” —Kevin FeatherlyTHE FUTURE OF STREAMING MEDIA
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