Improving Quality May Help To Boost Streaming Media

Cable strategists can expect competitive pressures from
Web-based media providers to spill into the TV arena much sooner than expected, thanks to
the latest gains in streaming performance at sub-megabit-per-second speeds.

A glimpse into that future came two weeks ago at the
Streaming Media West conference in San Jose, Calif., where an array of new-media
initiatives tuned to the broadband-access market demonstrated the combined potency of
low-bit-rate streaming technologies and new means of bypassing Internet bottlenecks.

There was even a start-up company on hand,,
demonstrating a VHS-quality full-length movie-on-demand service that was delivered over a
digital-subscriber-line link at 375 kilobits per second.

"Digital audio and video are radically changing
computing and the Internet for consumers and businesses alike," said Microsoft Corp.
CEO Bill Gates, who was on hand to tout his company's stepped-up support for new-media

To illustrate his point, Gates gave a demonstration using
General Instrument Corp.'s advanced digital set-top, the "DCT-5000+," to deliver
Web-based media built on Microsoft's "Windows Media" platform to a TV set.

"The digital-media revolution offers tremendous
opportunities for industry innovation, creates new business models and dramatically
improves the computing and entertainment experience," Gates said.

But if getting Web-based media to the TV via a
next-generation set-top box is the business model of potential interest to cable
operators, Gates and other executives on hand at Streaming Media West had other products
to show that pointed to business models that could be far less cable-friendly.

Their basic message: With the ability to deliver
full-screen, 30-frame-per-second video streams tightly meshed with interactive
advertising, electronic commerce and other components at 500 kbps or less, Web-content
producers can now look at the expanding base of DSL customers, as well as high-speed
cable-modem customers, as target audiences for every type of programming imaginable.

"I think we're at a point of inflection where
broadband is ready to become a mass-market phenomenon," observed Leo Spiegel,
president and CEO of Sandpiper Networks Inc. "In another 12 to 18 months or so, the
availability of DSL and cable [data services] will be a de facto reality in most major
regions of the country."

The combination of more aggressive deployments of
high-speed-data services and the lowering of the bandwidth threshold for
entertainment-value product on the Internet-protocol infrastructure is augmented by
systems like Sandpiper's that circumvent Internet bottlenecks by distributing broadband
content to the network edges.

"We're creating a content-delivery network with
intelligent computing at the edges that can support all types of content, whether it's
HTML [HyperText Markup Language], streaming on-demand, live performances or something
else," Spiegel said.

In the case of Waterford, Conn.-based, the
business model includes a means of delivering Web-based movies on-demand to the TV from a
PC that's connected to DSL or a cable modem without requiring the use of a set-top box of
any kind.

Instead, the vendor has developed a small box that connects
to the PC via a wireless link and plugs into the audio and video inputs at the back of
most recent TV sets, thereby supporting translation of the IP Webcast signals to NTSC
(National Television Systems Committee) signals.

"We're still working on [retail] distribution
channels, but we anticipate that the module will cost about $100," MeTV CEO Jeffrey
Pescatello said. This includes a wireless transmitter operating in the unlicensed
5.4-gigahertz band that plugs into the PC and pipes the digital-video signal to the TV.

"We're charging for movies on-demand at about the same
price level you would pay at the video store -- $3 to $4 per viewing," Pescatello
said. "We're delivering comparable quality at much greater convenience, so those
prices make sense, although eventually, we hope to move to a monthly subscription

To succeed at these price points requires consistent
delivery of quality film presentations at low-end DSL bit rates, which means MeTV has to
deliver what it was demonstrating in San Jose to everyone who buys a movie, Pescatello
noted. "This isn't just a tech demo -- It's a demonstration of an up-and-running
business," he said, noting that MeTV now has 1,500 full-length feature films under
license, one-half of which are ready or close to ready for Web distribution.

To achieve reliable distribution at such low bit rates,
MeTV is using the services of Seattle-based, which compresses and formats
content for suppliers like MeTV and also acts as an aggregator of backbone-distribution
networks to facilitate high-quality delivery to network-edge points.

The company has licensed several compression,
file-formatting and streaming systems from leading suppliers, most recently the newly
enhanced Windows Media platform from Microsoft. The firm's backbone-distribution partners
include iBEAM Broadcasting Corp., Intervu Inc., Enron Communications Inc. and Digital
Island Inc., which is merging with Sandpiper.

"It doesn't matter who your ISP [Internet-service
provider] or cable operator is; when you go to our Web site, the system automatically
finds the best backbone-distribution network for delivering a movie to your service
provider's POP [point of presence]," Pescatello said.

While the company has been offering its service since
midyear, it is still in prelaunch phase, with plans to begin a limited launch with
advertising campaigns in New York and Los Angeles next month and across the rest of the
country by June.

The truly significant aspect of what MeTV was showing was
that it tapped an infrastructure -- as represented in the ASP (application-service
provider) model followed by -- that is now available to everyone in the
content-supply business.

"We're able to significantly lower the barriers to
entry for companies that want to provide streaming and digital-media solutions without
investing in the required technology and services," noted Martin Tobias, CEO and
founder of

Several suppliers of the tools used in delivering audio and
video over the Web demonstrated in San Jose that they had managed through a variety of
techniques in the client/server mode to achieve what looked like VHS-quality full-screen
video running somewhere between 300 kbps and 400 kbps, depending on the vendor.

Techniques like variable-bit-rate encoding, forward error
correction and film-to-video bit-saving (telecine) processes -- which have been features
of bandwidth conservation in the digital-TV domain -- have now been optimized for use in
various proprietary Web-streaming systems, often in conjunction with a few seconds of
buffering to allow time for some of the complex processing.

Equally important, some suppliers are now offering
compression and streaming tool kits that include new means by which e-commerce and
advertising capabilities are easily built into a file program, supporting highly
interactive, media-rich experiences with hooks for dynamic ad insertion and a wide array
of account-management functions.

Microsoft, for example, was handing out a CD labeled
"Jumpstart" that contains a tool kit based on Windows Media, giving anyone with
NT-server-computing capabilities the means of putting revenue-generating broadband media
up on the Web.

"Authoring tools and rights management are built right
into the platform," said David Britton, lead product manager at Microsoft's
streaming-media division. "The content supplier can even set the exact level of
protection for a particular element -- for example, tying it to one person's usage and
preventing any copying."

Microsoft now has more than 80 companies participating as
partners in the Jumpstart initiative, which seeks to combine all of the elements needed to
deliver broadband content end-to-end in today's Web environment, from the basic software
tools to the backbone and local-access distribution facilities. "It's getting to be
practical to deliver broadband content," Britton said.

Microsoft's plunge into the streaming and related
infrastructure components surrounding media distribution on the Web has put new pressure
on RealNetworks Inc. as the dominating technology force in streamed media.

"Microsoft is definitely the competitor we're most
concerned about," acknowledged Paul Thelsa, group product manager at RNI. But
Microsoft has a long way to go if it is to match the quality and scope of RNI's enabling
technologies, Thelsa asserted.

"If you look at the still captures from 300-kbps
streams based on Windows Media versus those from ours at the same speed, you can see a big
difference in terms of picture clarity," he said, noting that RNI's new server
software offers a 50 percent improvement in video-streaming performance over the previous

Innovations introduced with version 7 of the RNI server
software, which are enhancements of the firm's "G2" system, include
"two-pass profile encoding" and variable-bit-rate encoding, which work together
to analyze the moment-by-moment bit-stream requirements of an audio/video segment in order
to maximize bandwidth efficiency.

"We also have forward error-correcting codes, which is
something new for us," Thelsa said. "Basically, all of these things allow us to
deliver MPEG-1 quality at one-half the former data rate."

The latest products from RNI also include improved means of
supporting e-commerce and advertising, Thelsa noted. Web sites using an ad-management
solution in conjunction with the new advertising extension for the "RealServer
7.0" can count impressions, count click-throughs, target, schedule and manage sales
for ads shown in the "RealPlayer" client, he said.

"We've also done a deal with DoubleClick [Inc.] that
allows customers using the 'Real Broadcast Network' to operate what amounts to syndicated
shows with advertising support over the Web," Thelsa said.

This means media companies that want to gain new revenues
from existing product by inserting Web ads in place of the ads that run in the original TV
or radio broadcast segments can do so without having to develop and manage in-house
ad-serving and tracking systems, he added.

"It will be a big boon to broadband content if
providers can find a way to make new money off existing material," Thelsa noted.

While RNI demonstrated 300-kbps video streaming that
appeared to outperform some of its major competitors, it was not alone in showing
VHS-level quality at that data rate.

New York-based, for example, was on hand with a
300-kbps demo that delivered full-motion, full-screen video at stunning quality to the PC
without any support from the various backbone providers that were buttressing the MeTV

The company will soon be offering such content over the
Web. "We're putting broadband content together through our own site to help
evangelize what can be done with this technology," said Dan Miller, CEO of, a
longtime supplier of multimedia-compression and other tools that was formerly known as The
Duck Corp.

"The people who are in the media-production business
at the studios and broadcast networks don't care about the bleeding edge of
technology," Miller added. "They want to see working commercial products."