Telecommunications Reports International, Inc.
INTERACTIVE SERVICES REPORT with Multimedia Daily
The Exclusive Weekly Report on Interactive Content, Services and Markets
November 28, 1997
by Marvin V. Greene, Contributing Editor
Remember video-based, news-on-demand, one of the hallmark applications that once was to be a key component in the effort to deliver interactive television services?
MediaOne, the broadband services unit of Denver-based US West Media Group, believes its new Streamcast video streaming application can replicate the best qualities of news-on-demand on the World Wide Web. MediaOne, using multimedia streaming technology developed by various providers, recently launched its service on New England Cable News, an affiliated company that operates a 24-hour cable news service serving 2.1 million homes.
Kip Compton, MediaOne's director of Internet systems and services, said he is negotiating with several other content companies for the Streamcast service, but declined to specify when it would be launched on those sites.
Streamcast allows viewers to see encoded news clips on their personal computers and will be optimized for the television platform as Internet-enabled television sets and Internet set-top boxes are more widely circulated. Compton said that while Streamcast can be used with bandwidth-constrained dial-up access services from Internet service providers (ISPs), MediaOne sees it as a parallel initiative to enhance its deployment of broadband modems.
Interactive media observers say MediaOne's approach is sound. "It probably isn't chicken or egg. It's probably both. They're going to build on both sides," noted Len Muscarella, managing director of Interactive Media Associates, a consultancy in Parsippany, NJ. "They don't just want to be a broadband access provider. They want to also have content that optimizes broadband delivery. I think it's a way to get almost vertically integrated."
Streamcast converts analog video to a digitized format. Users can note and enter headlines on a Web site, and the server breaks up the broadband video into segments for searching and viewing. Captured files are composed automatically using standard commercial codecs, such as VDOne Corp.'s VDOLine application or Microsoft Corp.'s NetShow. "It just makes more sense to deliver [video clips] through the PC [personal computer] because, in a lot of ways, the software, the plug-ins, can use the intelligence of the PC," Muscarella added.
Compton said a video-based news-on-demand approach on the Internet offers some favorable economics -- which doomed, at least for now, that application and others, such as movies-on-demand, on full-blown interactive television systems companies experimented with then abandoned a few years ago. While video-quality will make it difficult to match frame-rates associated with interactive television, Compton said video-based news on the Internet makes sense financially, for instance, because the servers are "off-the-shelf" and competitively priced. But the "capabilities are quite similar" as having true on-demand technology is adapted to Internet applications. "With interactive television a few years ago, you were looking at new technologies that were expensive to develop," Compton said.
How any video-based Internet application will play in the consumer arena remains a question. Already, many streaming video pioneers, such as VDOnet and Real Networks, formerly Progressive Networks, are shifting their strategies to directly target corporate enterprise networks where the demand for video services for sales and marketing, training and communications is burgeoning and where users are more tolerant of choppy images.
MediaOne's approach -- while the company agrees that Internet video is a niche application presently in consumer markets at least until broadband Internet access is more widely available -- is that video works best on the Web in short bursts of clips rather than in long-form content such as movies. Two years ago, some companies had advocated viewing full-length movies on the Web, but those efforts largely were abandoned.
"The Streamcast technology lends itself to any type of content that can be broken up into small segments," Compton said. "Obviously, news clips make a lot of sense -- music videos -- anything that can be made into smaller clips." The New England Cable News site (http://www.necnews.com) does not yet accept advertising, but Compton said that possibility exists. Usage patterns show the site, which has had the Streamcast capability since September, is drawing users who don't want to wait for newscasts to come on television to see news video and users who are at work who want to keep up with breaking news but don't have access to television sets, he said.
"The interest in the site is very much drive by people's direct desires to see the news," Compton said.
Scott Woelfel, vice president and editor in chief of CNN Interactive in Atlanta, which uses streaming video on its Web site, said on-demand news video can be a key application for the Web. "It's something that's renewable, of broad interest and usually broad awareness, and something that basically seems worthwhile when you go to all the trouble to deal with video on the Web. We use it as another facet of telling a story," Woelfel said.
CNN Interactive uses video in conjunction with text on its Web site, but Woelfel said the site is moving toward a sort of video-only application, in which the text would be supportive. He expects CNN's site to have that capability in January 1998. "The text part would be minimized and you would, in effect, sort of be using the Web as a tuner to jump through these various video channels," Woelfel added.
Some observers differ on how effective they believe video will be on the Internet since mass consumer usage of the Internet still is not fully developed. The question is whether the Internet is going to have 80 percent to 90 percent "penetration to the home," said John Hall, an interactive media consultant in Glen Ridge, NJ. "Are 90 percent of the people going to be using the Internet or going to be using a computer? I haven't seen a reason for, except maybe electronic mail, why the average person is going to use the Internet."
John Hall (201) 680-4449; Len Muscarella (973) 539-5255; Scott Woelfel (404) 827-1956; Kip Compton (303) 754-5443.
