Confidential

Challenges of Internet Streaming

Sloan Media Tech

February 8, 2001

Confidential

Outline

• Hype• Players• Applications • Business models for delivering those apps• Service providers• Technical challenges to implementing

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Market Trends

Streaming Industry Topic Area

Useful Statistics Source

Streaming Media Market Size

$2.5 Billion by 2004 $21 Billion by 2008

Internet Research Group

Streaming Usage 11% of Sites today 89% of sites by 2003

Jupiter Communications June 2000

Broadband Usage 5M U.S. Homes now (10%) 28M U.S. Homes

(2005)

Jupiter Communications September 2000

Most Popular Format End Users - 68% Real Content – 63% Real

Jupiter Communications October 2000

Most Popular Streaming content

1. Music Downloads

2. Music Listening

3. Special Events

4. Movies / Television

Red Herring November 2000

“What consumers think about digital delivery of

entertainment”

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End UsersIn the home, at work,

at school

Content Delivery Networks

(CDNs)

Akamai, Digital Island, iBeam

Backbone Networks

AT&T, Enron, Williams

Broadband ISPs

Cable MSOs, DSL

Narrowband ISPs

Consumer Disney,

News Corp., Time Warner,

Viacom

Lycos, Yahoo!

E-CommerceProviders

Enterprises

Advertisers?

Corp. Networks

Players

Applications Service Providers

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Applications

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Consumer Applications

• Religion– Short format web video

– Trailer for Titanic (but not Titanic itself)

– Desktop, not set-top

• Leveraging existing content for existing businesses– Music and music videos

– News and sports

– TV / movie related properties

– Very few, very large mass content producers

• Growing e-commerce– Mini product infomercials / demos

• Maybe streaming advertisements?

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Enterprise Applications

• Sales channel training– Product announcement to all Ford dealerships worldwide

• Management communications– Explain latest and greatest reorg

• Investor communications

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Consumer Business Models

• Consumer applications leverage existing products• Media Companies

– Survivor web site– Drives eyeballs to TV show (clear value)– Brings TV advertisers to the web– Maintains CBS brand loyalty (diffuse value)– Not a premium service / no sub charge

• E-commerce companies– Sell existing products (CDs, author interviews at Amazon)– Clear value

• Challenges: must be mass media– Cheap– High quality presentation– Broad reach

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Enterprise Business Models

• Enterprise applications reduce cost of business• Challenges (same as consumer):

– Cheap

– High quality presentation

– Broad reach

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Service Providers

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Service Provider Business Models

• Sell access to the network• Move content between networks• Provide a home for content on the network

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Broadband Service Providers

• How do I differentiate my product?– Earthlink, AOL, Verizon, ATT, RCN all sell access

• How do I drive penetration?– Speed gets me 5% of houses passed

– Always on / no second phone line gets another 5%

– Then what?

– Wall street is expecting 25% penetration

• How do I maximize revenue / bandwidth?– More HBO? More cable modem content?

• How do I implement this? Buy off-the-shelf?

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Content Delivery Networks (CDNs)

• Accelerate content delivery• Maintain presence across wide geographic areas• Build over-lay networks on top of other networks• Have many content provider relationships• Don’t own parts of the network

– At the mercy of those that do

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Service Provider Predictions

• Major access providers become CDNs– Ability to channel eyeballs toward content

– Own the last-mile real estate

• Traditional CDNs become content aggregators– Provide global reach to content providers

– Maintain last-mile presence in 2nd tier markets

– Become technology providers to facilities based networks

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Technology

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The problem with delivering video…

Not enough predictable bandwidth end-to-end (not latency!)

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The solution…

Bypass as much of the network as possible

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Which raises a host of new questions

• Content lives in lots of different places• How to direct a user to the right place?• How to afford all the replication devices?• How did I fit all the equipment in?• How do I manage it all?• How do I move all the content to the edges?

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Solution: Content Aware Networking

• The technology required to make the network aware of the content it is delivering

• Not just about moving packets• Understanding usage patterns• Reacting, predicting• Companies building product in this space:

– Cisco, Nortel, Lucent, Inktomi, Network Appliances, Cacheflow, EMC, Avid, and of course Vividon

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Q and A