Williams jumps in

Not everyone is down on the Internet. Looking to increase IP traffic on its 33,000-mile fiber-optic distribution network, Tulsa, Okla.-based Williams Communications will invest $20 million in cash and $10 million in services to purchase a 49% stake in iBeam Broadcasting Corp.

The investment will help Williams target the enterprise and corporate-communications marketplace, where iBeam has made significant inroads as a facilitator of virtual board meetings and the dissemination of company information. The agreement gives iBeam access to Williams' Vyvx network for fiber-optic and satellite uplink distribution and to a wide range of broadcast clients.

In addition, Williams' assets will enable iBeam to market more telecommunications and broadband media services. Among them are its Activecast interactive Webcasting, ad insertion, syndication, digital-rights management and pay-per-view.

According to iBeam Senior Vice President of Marketing Drew Henry, the streaming-media-services provider has received an additional $10 million in funding from a group of investors, which, for contractual reasons, he declined to identify. The money, he says, will allow iBeam to "continue to take advantage of this rapidly growing streaming market."

Williams and iBeam have worked together since January 2000, when iBeam turned to Williams for satellite and fiber transmission for its streaming-media services. Williams has also served as a reseller of iBeam's services.

The relationship has allowed iBeam to offer a hybrid distribution model that delivers data from its edge servers to remote sites anywhere in the world. Williams used this model for the first end-to-end digital delivery of a major motion picture last November, when it transmitted a digital file of Bounce
from Miramax Studios in Los Angeles to 25 AMC theaters in New York. For that event, Williams provided transmission services, network operations and monitoring.

With Williams now a part owner, iBeam can offer this type of "closed" system with a high degree of control over traffic management and data-transfer rates, Henry says.

"Before this agreement, we were reliant on others," notably content-distribution-network providers Digital Island and Kassenna. Those other services do not, however, provide an end-to-end path the way the Vyvx network does—from a central location through Williams' distribution center in Tulsa to multiple end-users, he adds.

Williams had intended to move into the streaming segment of the market, according to Laura Kenny, president of its Vyvx Broadband Media unit, and this agreement is part of a company strategy to move data in all its forms: "We've held a large market share among broadcasters and cable networks for video distribution, so the next logical step was moving into the Internet."

She believes that the corporate market is poised to do more with the Internet in terms of getting its messages out to employees and shareholders. "We have a lot to gain in this space," she notes.

For iBeam, the investment comes at a time when most Internet-related businesses are struggling to find financing. "We are a growing company that needs funds to maintain operations," Henry says. "For us to be able to announce this new funding is a clear validation of the streaming market and our business model."

In the past 18 months, iBeam has served more than 1 billion audio and video streams, according to the company. Its monthly average data-transfer speed is considerably faster than the average consumer broadband cable modem.

Williams provides transmission services for 80% of all professional-sports broadcasts and 65% of all live news special events (including the Super Bowl for 12 consecutive years), the company notes. It also has fiber-optic connectivity to every major news and broadcast center, more than 600 TV stations, plus production houses and movie studios, and distributes more than 2.75 million radio and TV ads a year.