There was tremendous interest from the content providers. Unfortunately, there was not tremendous interest from advertisers or viewers.
Back in September 1999 I was hired by a client to take a look at the concept of video streaming and the promise it held for television and radio news. A year and a half later, the project drags on like a bad cold, having been rewritten and revised multiple times as companies surge, merge and purge. If someone starting a similar study today came to me for advice, the best tip I could offer would be to make sure his or her pencil has a big eraser on it.
I began researching the issue at a convention where the exhibit floor was teeming with vendors eager to take a television or radio station's content and put it online for free. Each vendor earnestly and enthusiastically touted streaming media's potential in general and their company's plans to cash in on it in particular. The pitches were similar: Putting your news content online would be a great way to extend your brand into a new medium, expanding your audience and introducing bountiful new revenue streams.
By December 1999, out of the myriad search engines and aggregate sites, I had identified four companies to profile. Each had a distinctly different way it was going to handle streaming media and how it was going to monetize it. The four companies were FasTV, Zatso, BroadcastAmerica.com and Broadcast.com, which had just been sold to Yahoo for $5 billion.
Conceptually, all the companies had exciting ideas. Each planned to take an on-air product and make it available, either in whole or in part, via the Internet. In some cases the product was streamed live. In some cases the on-air product was archived for playback on demand in its entirety. In some cases the on-air product was repackaged for customized on-demand playback. In all cases, these companies felt there would be great and growing demand for any of these products, and they were willing to take the risk to give away the technology and manpower in exchange for the chance to make money with it.
The greatest risk for a television or radio station was to do nothing. Getting involved meant very little effort other than handing over content. The services would do all or most of the work to get the product online and would even sell or help sell it to advertisers.
There was tremendous interest from the content providers. Broadcast.com and BroadcastAmerica.com boasted streams from hundreds of stations. Unfortunately, there was not tremendous interest from advertisers or viewers. FasTV went down first, in July 2000. Zatso ceased operations last October. BroadcastAmerica.com declared bankruptcy in December. And while Broadcast.com still exists, Yahoo has relegated it to white-elephant status, seeming not to know what to do with it.
The past year's mayhem sends two clear messages. First, audiences have thus far been slow to embrace video in the online world. Second, investors are much less likely to wait patiently for advertisers to warm up to the concept.
The slow deployment of broadband hasn't helped matters. For instance, I live four miles outside the city limits of Austin, TX, one of the most wired high-tech cities in the world. But neither my telco nor my cable company has yet to provide high-speed service to my neighborhood.
Even the availability of broadband doesn't guarantee an audience. While online video is intriguing for a while, it's not very compelling. It's not fun to sit there looking at a monitor with a two-inch by two-inch streaming video on it.
Advertisers are content playing a waiting game. Because there isn't a mass audience, you're not going to get the attention of branding-type companies like Coca-Cola that would spend a half million dollars just to get their name out. So you're left trying to compete for advertising with other sites that are just as screwed as you are.
Although I'm a lot less naïve than I was a year and a half ago when I began looking at the issue, I still think that one day streaming media will play a strategically valuable role for broadcasters. Until that day arrives, however, you simply can't kick back and ignore it. This is the perfect time for you to be doing your homework. Here are a few things you can do:
Keep an eye on what others are doing with their streaming: Make notes on who's doing it, how they're doing it and where they're doing it. Good places to start are supersites like CNN.com and MSNBC.com. Both use plenty of video and often creatively package it. And don't limit yourself to television sites. Newspaper and radio sites are drooling at the chance to add video to their traditional content. Take a look at a major site like washingtonpost.com and a small-market radio site like wsjm.com in Benton Harbor, MI. Both destinations frequently put video content front and center and are anxiously awaiting the opportunity to do more.
Check status of broadband deployment in your area: Have either the telephone company or the cable providers saturated your community with high-speed connectivity? If not, do they have a timetable for doing so?
Know your local demographics: Even if broadband is widely available, are the locals likely to use it?
Determine what you would stream: Streaming, like multicasting, becomes a benefit to you only if you have something to offer. Do you simply want to simulcast or rerun your on-air product? Will you repackage material you've already aired? Will you create something new expressly for the stream?
Get your contracts in order: Under your current contracts do you even have the right to stream your content? What can you use and what's off limits? Make sure you fully understand how streaming might impact your current contracts with content services, freelancers and stringers, talent and even advertisers.
Weigh the expense of doing it against the return: The Internet is tough to sell in the best of times and requires a new and different mindset on the part of your sales staff. In the absence of vendors who will stream your signal for free, you get stuck with the costs for encoding, servers and bandwidth, plus any dedicated personnel. Will it be worth the investment?
Keep an eye on developments in technology: This ties into broadband penetration, as well as improvements in player platforms and developments in mobile technology. There's a real possibility that streaming video may ultimately be a more viable product on a PDA than a PC.
And again, the most important advice of all is keep that eraser handy.
Steve Sullivan, co-founder of the Advanced Interactive Media Group, LLC, frequently writes about media trends and technology for various publications. He can be reached at sullicom@aol.com.
