Corporate streaming is poised for growth

In advance of residential broadband access reaching critical mass, Analysys anticipates that the corporate, not the consumer sector, will be the ‘natural’ market for streaming applications. There are compelling reasons of efficiency and cost for businesses to exploit streaming, which will create attractive revenue opportunities for value-added service providers willing to support them.

The level of competition to host Madonna’s live gig at London’s Brixton Academy is testament to the incessant drive to prove the technical viability of broadcasting via streaming in the consumer marketplace. By contrast, media streaming in the corporate environment has largely been ignored by the industry until recently, even though streaming has become a mainstream business tool for many businesses. A significant number of multinational corporations are already avid users of streaming media applications, and some have been using them for over five years.

We estimate that the global take-up of streamed content (video and audio) by corporate workers will rise from its current value of approximately 7 petabytes (7x10 ¹⁵ bytes) per year to a healthy 130 petabytes per year in 2005 – an average annual growth rate approaching 80%.

Regulatory changes in the US, such as ‘Regulation FD’, have led to a significant rise in the use of streaming media by corporate users worldwide, including European-based multinational corporations and investment institutions, many of whom have financial interests in US markets. Regulation FD, which was introduced by the Securities and Exchange Commission last year, stipulates that quoted US companies must ensure that material company information is disclosed to the general public at the same time that it is disclosed to financial market analysts. CCBN, an investor-relations specialist, began offering streaming media conference calls about 18 months ago, and now has over 3,000 customers. CCBN has recently partnered with iBeam in developing a web-based self-publishing presentation tool to help users broadcast presentations online.

The recent economic downturn has focused attention on ‘e-learning’ as a means of reducing training costs. The cost of producing online multimedia content for training is roughly equivalent to running one or two conventional training sessions, and this content can be used repeatedly to train staff worldwide on demand. Some enterprising hi-tech companies, such as Cisco and Hewlett-Packard, have developed ‘virtual classrooms’ from a selection of multimedia presentations (video, audio, text), archived videos of major training events, and streamed versions of off-the-shelf management training videos.

Streaming has also made a significant impact on corporate communications as a powerful and effective way to deliver the corporate message. The ability to stream the chief executive’s address is quickly expanded to include investor and analyst briefings, company news and events, and product launch information. BP is currently considering an interactive corporate streaming video service to deliver corporate news and training material to its international workforce. Streaming has begun to supersede more conventional (live) corporate TV broadcasting as a more cost-effective and flexible alternative, since content can be stored for later ‘on-demand’ viewing.

Revenues in this market will be realised from a number of sources, including content production, encoding, systems integration and content distribution services. For example, Analysys estimates that worldwide content distribution traffic revenues from corporate streaming will rise to around US$400m by 2005.

It has become commonplace for large businesses to develop their own streaming capability in-house, since most already own (or at least rent) high-capacity networks for other communications needs, and have highly competent IT staff to build and maintain the server and software infrastructure required for streaming. External service providers are typically only used for live or highly interactive events where the company’s own communications infrastructure may not cope with the volume of traffic generated, such as major product launches or investor briefings.

There are other opportunities, beyond pure content delivery, to share in the anticipated growth of the corporate streaming market. There is an emerging opportunity for the wider streaming industry, including professional services providers and consultants, content creators and producers, and systems integrators, to support the corporate sector in developing streaming applications. Cisco, for example, has recently announced the launch of its comprehensive video, audio and voice distribution architecture over an IP network for corporate users, while Hewlett-Packard has formed its Media Solutions group, dedicated to helping companies build their own streaming capability from content production through to delivery.

Analysys anticipates that there will be new and lucrative opportunities for content creators, system integrators, and solution providers in developing a market for value-added streaming services. New and smaller corporate users, especially those lacking in-depth IT/communications experience, will need assistance to build streaming into their business effectively and reliably. Even seasoned users of streaming are beginning to express concern about the ability of their existing infrastructure to handle the volume of traffic that streaming entails, and are looking for improved infrastructure solutions. As streaming becomes central to the corporate environment, those players willing to exploit the opportunities will reap significant rewards.

Analysys provides strategic consulting services to the media, telecom and IT industries worldwide (www.analysys.com). Tim Chen and Debra Charnley are consultants within Analysys's convergence group with interests in streaming media, business and interactive TV and new media technologies.