| BUSINESSWEEK ONLINE : NOVEMBER 1, 1999 ISSUE | ||||||||
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| NEWS: ANALYSIS & COMMENTARY
Shortcutting the Online Traffic Jam iBeam's satellite system can stream video straight to ISPs Let's face it: Webcasts have so far been a bit of a bust. Last February, millions of Net users jammed an online Victoria's Secret fashion show that had been advertised during the Super Bowl. Only 40% of them got through--and those who did couldn't get a clear shot of the cyberflesh. The Oct. 9 NetAid rock concert fared better because organizers provided 10 times more video-streaming capacity from their servers. But even so, most of the 2.4 million Web surfers who logged on had to settle for stuttery sound and jerky, card-size images that made your typical dumb old TV seem pretty smart. Soon, the logjam could free up and the Net start living up to its promise as a medium for sound and video. New systems such as the iBeam Broadcasting network, a satellite service launched on Oct. 13, bypass Net bottlenecks and, potentially, will allow millions of surfers to view the same material simultaneously. A rival scheme announced on Oct. 18 by SkyStream Corp. will send Net data from the U.S. to Australia, hitching a ride with digital satellite-TV traffic. ''There's huge pent-up demand for streaming media over the Net,'' says analyst Gerry Kaufhold of researcher Cahners In-Stat Group. ''These guys are at the forefront of making it possible.'' Why does that matter? These days, the biggest driver of traffic growth isn't static Web pages or even graphics but richer forms of media that gobble up huge amounts of network capacity. These include MP3 audio and RealVideo. With satellite Webcasts, producers of such media finally have a reliable way to deliver programming to millions of customers. Says Mika Salmi, president of online movie distributor AtomFilm: ''It brings a whole new element to the Internet.'' Satellite Webcasting could be a big business. Researcher Frost & Sullivan predicts that zipping Net data by satellite will grow from a $200 million business this year to more than $3 billion by 2004. iBeam's rivals include SkyCache, which sends conventional Net data over satellites, and SoftNet Systems, the No. 3 U.S. cable Net service provider, which launched a venture on Oct. 12 with Pacific Century CyberWorks of Hong Kong to deliver Net service by satellite to 53 Asian countries. All these firms are trying to solve the same problem. ''The Internet is a pretty hostile environment for streaming media,'' says iBeam CEO Peter B. Desnoes, a 30-year veteran of the broadcast industry. He has already raised $68 million from Microsoft, Intel, Covad Communications, and top-tier venture firms to get iBeam off the ground. He figures the company will need $250 million to finish the job. Investors are sold on one big advantage of satellites: their ability to bounce a signal from one source to many destinations. Neither iBeam nor SkyStream sends signals directly to businesses and homes, the way Hughes's DirecPC does. Rather, they transmit to local Net service providers, which relay the data to subscribers. The point is to push content as close as possible to users, eliminating the jam when millions of people try to hit a Web site simultaneously. That model has already gotten the attention of broadcasters and producers. iBeam has signed up the British Broadcasting Corp., Bloomberg, Entertainment Blvd., and Launch Media, which will pay the company to carry their content. On Nov. 18, Warner Bros. Online will use iBeam to Webcast an interactive version of the Drew Carey Show concurrently with the TV program. So far, so good. But there is still another bottleneck for streaming content: the poky ''last mile'' links into homes and businesses. Webcasts can be viewed without high-speed cable or Digital Subscriber Line connections, but at slower modem speeds the video is clearly inferior. Desnoes can't force cable and phone companies to upgrade their systems faster, but the promise of sexy new content could put them into hyperdrive. By Andy Reinhardt in Sunnyvale, Calif. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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