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Streaming Media: Rebounding With Strong Profit Potential

By | January 1, 2003

      By Nick Mitsis

      Satellites are still the best way to reach multiple points with large quantities of content in the most economical way. Even so, applications like Internet streaming have a few more years of development ahead before sufficient broadband connections and revenue models to collect payments for content are totally resolved.

      In the meantime, satellite-streaming ventures have triggered a spur of new services, and consumers and enterprises alike are displaying an enormous appetite for streaming content. As more users direct their PCs onto the rich media fast lane, the demand for satellite-based streaming content is likely to soar.

      Research Indicates Growth

      Documentation of increased Internet usage is available. In Europe, for example, Germany remains the continent’s leading Internet market, according to a survey released in late 2002 by Information et Publicite. Spending an average of 522 minutes online a month, German Internet navigators are well ahead of runners-up Spain (495 minutes) and France (476 minutes).

      As far as e-commerce and revenue figures go, natives under the Union Jack flag are leading Europe. Surfers in the United Kingdom spent almost 6.5 billion Euros ($6.5 billion) online in 2001, compared to Germany’s roughly 5 billion Euros, ($5 billion). Great Britain also leads Europe when it comes to online advertising, but falls behind Germany, which accounts for roughly a quarter of all European Internet users, according to the study’s findings.

      These European figures materialized, however, within a region that still lags in the amount of Internet accessibility. According to the study, only 40 percent of Europeans had access to the Net in the first half of 2002, as opposed to 59 percent of Americans who were able to log onto the information highway.

      Satellite Industry Reacts To Growth

      Many satellite service providers are reacting to the Internet usage surge, refocusing from mere space segment brokers to value service providers. "Value service is where it’s at now, not simply mere capacity," says Patrick Van Beveren, product manager of satellite services for Belgacom. The Belgium telecommunication company offers local and international voice and data services, cellular telephone services, satellite services, carrier services and all Internet-related services.

      "Two years ago Internet services were a booming business, but now, it is more challenging given the present economic environment," observes Van Beveren. "Value streaming media services such as e-learning, video programming, corporate training, in-store advertising and interactive features is where the market is growing."

      Belgacom is striving to take advantage of this market surge by increasing its satellite services. Recently, it launched its Belgacom Multimedia Over Satellite package. This service, using IP multicast technology, enables companies to distribute any type of digital content (data, video, audio) simultaneously to virtually an unlimited number of receiving sites across Europe via Eutelsat’s Hot Bird 3 satellite.

      Vertical Markets Pave The Way

      One of the more interesting streaming media applications, informational centers or kiosks, is now gaining more strength within industry segments. By placing TV screens fed by data content via satellite in commercial outlets, waiting rooms or airports, companies are able to target core consumer groups, showcasing product advertisements, product information and video clips. The advantage satellite technology brings to this application is that only one distribution point is needed to reach as few or as many sites as needed–saving both money and time.

      One of the main problems regarding kiosk technology, however, centers on streamlining the delivery process of that content while maintaining cost-effectiveness and quality. "There is a growing demand for such services. In fact, we are currently seeing an increase in our international business," says Joe Amor, vice president and general manager of Microspace Communications Corp. "We believe that satellite delivery of content to the kiosk industry will finally help this market grow to its full potential." Microspace currently serves various markets such as the aviation and entertainment industries. Other applications where streaming content via satellite bodes well include real time database distribution, product catalogs, financial information and e-learning programs.

      "What we are seeing more of now in terms of streaming are the corporate type of environments, when you are taking off-air broadcasts and then sending that over IP through the corporate network," says Howard Barouxis, national sales manager for Thales Broadcast and Multimedia. "Other key markets that are starting to need more enhanced streaming capabilities are the hospitality industries and universities."

      In fact, the International Space University (ISU), headquartered in Strasbourg, France, was seeking to enhance the education process of its institution in 2002 and ultimately turned to streaming media technology to accomplish its goals. Specifically, the university wanted to better enable educators to illustrate their lectures with relevant high- quality video programs. The ISU wanted a system that would offer "on-demand," archived or even live satellite feeds to each classroom and at any time give students more current and compelling content throughout its 25 affiliated campuses. "The ISU was able to record and edit live satellite video content and professors could access the video files during lectures through a PC," Barouxis adds.

      University professors were using Thales’ Topaz DTV recorder and local encoders to compress MPEG 2 video and to send it through the IP network. Most classrooms were equipped with a PC running Thales’ MPEG 2 software player, Eyestream. Through the university’s backbone, which was multicast enabled, this solution facilitates more widespread distribution of coursework and related content.

      Next-Generation Technology Surfacing

      Along with the expansion of streaming media within various vertical markets, the bits and bytes surrounding the technology are also being upgraded. Throughout the past seven years, MPEG 2 video compression technology has been the enabling factor behind the amount of content that could be economically broadcast. Now, there is an alignment within the standards among the technology platforms and MPEG 4 Part 10 is poised to take streaming applications to the next level.

      "One thing that is in the process of being finalized is the implementation of MPEG 4 Part 10 standard, often referred to as H.264," says David Price, vice president of business development for Harmonic Inc.’s Convergent Systems Division. "This is a vital ingredient for moving streaming media into a new era that will enable the same kind of video quality that people have come to expect from conventional digital television at the kind of data rates that are going to make streaming over different media, such as DSL Networks, a reality. MPEG 4 Part 10 will take everything that was good with MPEG 2 and make it current given the power silicon of today."

      As with most new technologies or standards, however, migration can pose significant challenges. To minimize the risks associated with moving to a new technology, many feel a standards-based approach is a logical choice. Implementing such standards throughout the range of subsystems and equipment needed for content delivery service may, in the end, economically benefit those profit margins depending on greater market penetrations.

      "Now, streaming media can transform from a little niche player for people to view through a small window on their PC for a limited time to a point where people can have a true video experience at either their PC or TV," Price adds.

      For equipment manufacturers, this technology upgrade means a new line of encoders will have both the conventional MPEG 2 and the new MPEG 4 capability in the same box. "Now it becomes a completely new playing field. Streaming takes on a whole new era in that it can actually be a constant video transmission service for hours on end," says Price.

      Skystream Networks Inc. is providing network equipment that enables streaming services, often by customizing enterprise solutions that enable businesses of any size to deliver live and on-demand video over broadband networks. "Mediaplex is a video services platform that enables service providers and carriers to quickly deploy video services to up to millions of customers at the same time," says Tom Lattie, manager of technical marketing for Skystream Networks.

      The company is targeting the retail, automotive, banking/finance, service provider and government markets. These advancements in equipment, Lattie adds, will deliver applications such as private TV networks, in-store advertising and product training at a much higher quality level, enabling them to deliver broadcast-quality video and data, better serving various clients within the retail marketplace. The result, according to Skystream, is reduced capital and operational expense with up to 40 percent reduction in capital expense.

      The State Of The Future

      Not too long ago, the excitement about streaming and its moneymaking potential for the satellite industry was all one talked or heard about. However, with the economic downturn, the collapse within the industry and a group of ambitious startups dimmed the light on this arena. Today, business models wanting to earn money by streaming media are once again conservatively evolving. This time, they are much more focused on specific markets and content type, as opposed to offering everything, everywhere like their predecessors of yesteryear.

      One of the key lessons learned by those still playing in the streaming field is the need to get the right balance between content and client. Once the market takes off again, satellite operators, equipment manufacturers and content providers can move into a profitable future. Supporting consumer and business needs for packaged voice, data and video is one of the main areas satellites can offer an optimal delivery mechanism.

      Nick Mitsis is the Editor of Via Satellite magazine

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