All Dressed Up With No Place to Go

If you want to reach a million people, you'll have to pay for a million streams. Now that makes sense if you're talking about penny-per-thousand streams, but unfortunately, that's not the case.

Have you noticed that lately, streaming video has taken a back seat in the techno-PR-cacophony that we're subjected to every day? It was barely a year or two ago when it seemed like every digital video editing software company had turned into an Internet company, a streaming company. Not any more. There's a good reason for that. Billions of dollars have been lost because of grandiose schemes for streaming video. What's happened to those grand designs? What should digital video editors do about streaming video? Should we invest in the tools that allow our final products to be streamed, or should we just wait on the sidelines until the streaming video business model makes sense?

At its root, streaming video has a big problem. To understand this, let's take a look at broadcast video. With one transmitter, millions of viewers can receive the one signal that's broadcast. It's a top-down system that benefits from an economy of scale. To broadcast the signal costs the same for one person as it does for a million. So, the more, the merrier. Compare to that the model for streaming video, where transmission is priced per-stream. Suddenly, economies of scale are turned upside-down, where if you want to reach a million people, you'll have to pay for a million streams. Now that makes sense if you're talking about penny-per-thousand streams, but unfortunately, that's not the case. But streaming video was going to serve niche markets, right? Those that weren't covered by the mass media. Right?

Well, yeah, but oftentimes in streaming media, someone comes up with a big idea that would have been great for the mass media, but turns out to be disastrous for streaming. Remember the Victoria's Secret fashion show? It was a disaster, where hardly anyone saw anything streaming. However, mass streaming proponents won't give up. According to T.S. Kelly, director of Internet Media Strategies at Net Ratings, "Streaming consumption is closely linked to huge media events, and events such as the Super Bowl, Olympics and Election 2000 significantly contributed to the increased use of streamed audio and video content." That sounds like a recipe for success, right? Not exactly. The sleepy world of streaming video all of a sudden has a Super Bowl-sized crowd, ready for some full-screen action. Uh-oh. Today's TV viewers are accustomed to smooth, full-screen images, and are quite sensitive to anything that's jerky, grainy, or out of lip-synch. Show a typical streaming video session, and they're going to hate it. So, streamers, be careful what you wish for -- you just might get it, and your viewers will be unsatisfied.

Streaming video was going to be great, as soon as broadband connections were more prevalent. But the broadband service providers are doing a terrible job of bringing high-speed Internet access to users. Oh, there's plenty of bandwidth out there on the Internet backbone. Billions of dollars worth of fiber have been laid in anticipation of the Great Internet Boom, but it's that last mile, from the ISP to you, that's fraught with laughable incompetence. I'm sure you or someone close to you has a horror story about outages, slow speeds, or complete unavailability of high-speed Internet service. Satellites offer no relief, either, with stingy companies like DirecTV acting like speeds "up to 400kbps" are some big whoop-de-doo. That's barely broadband in my book, and we all know what those two weasel words "up to" really mean -- it's PR speak for "in your wildest dreams." Worse, even after a two-year hype-fest about broadband rolling like thunder across this great land of ours, broadband still has only 10% penetration in the US. That's right -- out of 100 million households in the US, less than 10 million have broadband.

On top of that, even with a broadband connection, streaming video is unreliable at best, and downright unwatchable at its worst. This is a pure example of technology getting ahead of itself. With streaming video, the faddish behavior of the past few years has dictated that you're damned if you do and damned if you don't, but at this point, I think you're double-damned if you do and sunk if you're successful. I think anyone who jumps into the streaming media fray right now is either brave, stupid, extremely rich, or some combination of the three. And I'm not alone in that opinion, either. Gartner Analyst Lou Latham predicted that true TV-quality video won't arrive on the Web for three to five years. Even by 2004, Latham sees fewer than half of all households in the United States with broadband connections, and without broadband, well, streaming video turns into a slide show.

But keep in mind, I'm only talking about the near-term. Five years from now will be an entirely different story. According to a study done in March by Jupiter Media Metrix, companies will be spending even more money for streaming video projects in the next four years. Today they're only ponying up about $140 million a year, but Jupiter sees that figure climbing to $2.8 billion by 2005. That's for corporate use, so all you corporate video cutters might want to pay close attention to streaming video, since it looks like lots of companies are looking to start streaming training videos and pep talks from their desk-bound suits in coming years.

Alas, in that same study, Jupiter Media Metrix predicts that consumer-oriented streaming of entertainment content will lag behind. "This study is focused on the enterprise, and there is a whole other market out there called entertainment," said David Rader, senior analyst in Jupiter's custom research and consulting group. "The entertainment market isn't growing right now because they haven't developed successful business models for putting streaming media online." If that's not enough evidence for you, and you still think streaming will be big in the near term, just take a look at the elephant graveyard that is streaming video: CMGI-owned iCast, Time Warner's Entertaindom, Steven Spielberg- and Ron Howard-funded Pop.com, the Digital Entertainment Network, Pseudo Programs and Icebox, all dead. And those were backed by some of the deepest pockets in the industry.

So what's the answer to my question at the beginning of this column -- What should digital video editors do about streaming? Well, unless you're working in the porno industry, nothing. Don't waste your time. Stay on the sidelines. Unless, of course, your boss plunks down a stack of tapes and bellows something about needing to see all this on the Internet tomorrow. Barring that, the smart choice is to stay current with the latest streaming technology, but only to the extent of trial-balloons and experimentation. Then, five years from now, when bandwidth is sufficient and codecs allow super-compression, you'll be ready to dive in -- if there's an audience. In the meantime, ask yourself if there's a better way to narrowcast your content. I say, in the short term, think DVD, not streaming.

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Previous Columns
Apple Polishing at Macworld
DVD: Format Wars!
Steal This Song: Napsterization of Video?
Bargain-Basement PC: Cheapness Pays
Intel Itanium Debuts: When I'm IA-64
Buying an NLE: Know What You're Doing
NAB 2001 Wrap-Up
OS X Released: Jump Into The Aqua, Or Off A Cliff?
Not Expensive Enough? Production House Chic
in-sync: Outta Sync?
Windows XP: She's Too Fat For Me
2001: A Look Ahead
2000: Looking Back
Christmas List 2000
What Are We? Video Editors or Computer Geeks?
What Ever Happened to HDTV?
Apple Stock Heads Toward Bottom of the Barrel
Editing for Content
Looking Ahead: The Age of Spiritual Editing?
SIGGRAPH 2000 Roundup
Fix it in the Mix?
NAB 2000 Wrap-Up
Mac? Just Another Pretty Face
The Digital Video Editing Crystal Ball
Thank-You Note to Santa: Thanks for Bringing These NLEs For Me
What's With This 24p Stuff, Anyway?
Digital Video's Pizza Syndrome
HD Video Editing is Here. Now.
Welcome to Digital Video Editing.com

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