The Picture Is Bright for Video on Web
When Progressive Networks Chief Executive Rob Glaser mounts the stage in New York today to show off the company’s new RealVideo software for watching video over the World Wide Web, he hopes to spark the same kind of transformation on the Internet that his company did two years ago with its RealAudio software for sound and music.
“The Internet audio market took off because [Real Audio] works and there was great content,” says Glaser. “Our goal is to start that same process with video.”
Industry executives and analysts say Progressive, based here, is in a good position to shake up a market that’s already crowded with incompatible video systems, and possibly even establish a standard.
“Progressive Networks will crystallize the market,” says Jeff Day, executive producer of sports at ESPNet-SportsZone. “We want to deliver quality information and entertainment, but we can only do it if our customers have the [software]. Progressive will be able to create the excitement.”
But with competitors already offering similar-quality products, and with many technical obstacles standing in the way of quality video transmission over the Internet, it’s far from clear that Progressive can succeed in making video anywhere near as ubiquitous as audio.
Indeed, getting video to work well over the World Wide Web has been the Holy Grail of the cyber community ever since television and cable companies tabled their ambitious plans for offering interactive TV several years ago.
To be sent over the Net, video has to be converted to digital signals and then compressed into packets that can be sent through the often narrow, labyrinthine pathways of the Web. To avoid the lengthy wait required to get the video into a computer file, the packets must then be reconverted instantly by the user’s computer into a moving image.
With today’s top PC modems, computers and video software, you get, at best, a fuzzy, jerky picture. At worst, the picture freezes or the system crashes. While audio on the Net is already approaching radio quality after just two years on the market, most experts say it will be years before consumers will see anything on the Net that approaches TV quality.
And the heavy requirements of carrying video data to millions of users could quickly clog up an Internet infrastructure that is already dangerously bogged down.
“Today’s Internet is not set up” for video, says Christopher Walton, product manager for Netscape, which eventually plans to offer its own video software. “When it comes to the usefulness of the technology, we have a ways to go.”
Still, analysts expect a huge market to develop over the next two decades as new technology such as cable modems and satellites create fatter “pipes” that can readily accommodate high-quality video.
Many companies regard even the near-term market for low-quality video over the Net to be promising.
“Over the next six months we’re going to see the market explode,” says Shannon Perdue, product manager for Netshow, a Microsoft technology for viewing video on the Net. She sees promising applications for corporate training, videoconferencing, advertising and newscasting, where video quality is less important.
Current video technology is particularly attractive for corporate computer networks, which have far more capacity than the phone lines and modems that home users must rely on. When the next generation of 56-kilobit-per-second modems come into broad use toward the end of this year, many expect a new range of consumer applications--such as film previews--to emerge.
“At 28.8 [kbps], providing video is tough for everybody,” says Sharon Wong, director of product management at Vxtreme, a Palo Alto-based video software company backed by networking giant Cisco Systems. “At 56 kilobits per second, it’s great.”
Vxtreme’s Web Theatre Live software is being used in a Stanford University networking course so that Silicon Valley executives can follow the lectures. The software also allows shots of overhead slides and views of the blackboard to be sent alongside the video.
Another major player is VDOnet, which has financial backing from Microsoft and US West Interactive and claims to be the current leader in Internet video with 4.8 million users. A number of broadcasters, including CBS and PBS, use the company’s technology to deliver newscasts over the Web.
US West plans to use VDO’s server software to offer video over the high-speed Internet services it will introduce through its network of cable franchises. John O’Farrell, president of interactive services at US West, said the company was attracted by the ability of VDO’s software to not only view video clips, but also to be used for two-way videoconferencing.
Arroyo Grande, Calif.-based Xing Technology was one of the pioneers in putting video on the Net, but analysts say its StreamWorks software has fallen behind as a result of poor packaging and marketing.
Xing could be the first victim in what many regard as an inevitable consolidation in an industry beset by incompatible software systems.
Few doubt that Progressive will emerge as a major player. First there is the question of pricing: Progressive is announcing today that its entry-level server, used to send streams of video, will sell for just $295. That compares with $495 for VDO’s lowest-quality server and $2,000 for Vxtreme’s cheapest product. (In all cases, the consumer “viewer” software is free.)
More important, Progressive has a strong brand name and a proven ability to market its products. Microsoft, although it is an investor in VDO, is expected to announce today that it will bundle Progressive’s RealVideo product with its Internet Explorer browser.
Progressive has also persuaded 50 media companies, including Time Warner, MCA, Columbia Records and Hotwired, to develop content for the new software.
Progressive’s Glaser says the key to making video a success is “getting bright and creative minds working on this.” That’s what he’ll be up to when he gets on the stage in New York today with film director Spike Lee to show a film short Lee produced to be viewed over the Net exclusively on Progressive software.
Even competitors acknowledge that Progressive has the power to shake up the market.
“Frankly, I don’t lose sleep over Xing or Vxtreme,” says Randy Haldeman, director of marketing at VDOnet. I do lose sleep over Progressive. They have an awesome marketing machine. There is going to be a real war.”
