2009: The Year in Review

Michael Jackson's death in late June attracted so much global attention that 25 June was dubbed by some content delivery and network operators as the day the internet crashed. Given the huge spike in traffic following the announcement that the entertainer had been rushed to the hospital, network operators worked together on the subsequent streamed memorial service, which was held on 7 July and watched by a record-setting number of global viewers.

Closer to home, one of the industry's pioneers, Neal Page, passed away in early July after a prolonged battle with acute myeloid leukemia (AML).

July was also the month in which an internet radio royalties deal was struck for three types of "pureplay" webcasters: subscription-based services and free services, with the latter split into large or small.

"For more than two years," said Tim Westergren, founder of the internet radio station Pandora, "I have been eagerly anticipating the day when I could finally write these words: the royalty crisis is over!"

A small Internet radio webcaster is defined as one with $1.25 million or less in total revenues and would also place a cap on music streamed. All pureplay webcasters would pay an annual minimum fee of $25,000 that can then be applied to their royalties owed. Even with the solidified royalty structure, though, Pandora had to change its business model, as it is still charged a fee for songs that its listeners choose to skip upon hearing the first few seconds of the song.

Also in July, Microsoft launched Silverlight 3. Microsoft claims adoption is growing, with Silverlight 2 available on about 1/3 of internet devices, and the company used Wimbledon Live as an example of Silverlight's scalability, where 6,500 minutes of live streaming and on-demand content were streamed. Over 650,000 streams were served to over 20,000 concurrent viewers.

Google and On2 jointly announced that Google intended to acquire On2, maker of the VP6, VP7 and erstwhile VP8 codecs, as well as embedded H.264 solutions. The reasoning behind the acquisition fueled various speculations as to Google's intent, and the proxy statements have done little to provide clarity on the topic. What has been clearer, however, is that Google's first attempt to purchase of another public company has created significant On2 shareholder dissent over the past few months, leading On2 to suspend its special meeting twice (December 18 and 23) as it searches for a majority of shareholders to approve the merger. Another date has been set for February 18, 2010, and the date of record (for ownership of shares to vote for the merger) has also been shifted.

Both Apple and Microsoft used August as a month to tout their upcoming operating systems (Apple's Snow Leopard (10.6) was launched in September and Microsoft's Windows 7 was launched in October). Both operating systems shared a common streaming theme, with HTTP streaming of adaptive bitrate content (fragmented MPEG-4 "chunks") being integrated into the desktop video players on each platform.

The annual international broadcasters' show in Amsterdam each September, IBC, was the setting for Elemental Technologies to show off their Elemental Server, a GPU-based transcoding engine that the company claims can do the work of multiple CPU-based transcoding boxes. Elemental showed a further refinement at Adobe MAX 2009 in Los Angeles in October and then launched the Elemental Server at NewTeeVee Live in San Francisco in November.

In September, Akamai also launched its Akamai HD network and announced the network will be used to deliver 720p HD Silverlight streams of the 2010 Winter Olympics from Vancouver.

Streaming Media Europe 2009 took place mid-month, with a 32% increase over 2008's attendees, powered by discussions of timely topics such as online video platforms (OVPs) and HD content scalability. Yet community was also a key topic, as Myles MacBean shared in his keynote regarding Disney's portal strategy.

"I think Walt Disney, if he were around today, would be leading in the creation of virtual worlds," said MacBean, Vice President, Disney Online EMEA. "Walt focused on storytelling, innovation and quality, taking special stories and placing them in magical worlds." <>
MacBean dealt with the issues that a content owner of a major media company faces when it moves to a new medium. MacBean used his keynote to address the variety of mediums, the target audience, Disney's strategy and the impact on the value chain. MacBean noted that Disney was highly focused on strengthening the brand and staying on message, talking about how streaming and community building can help drive the overall vision.

As the year wound down, three Streaming Media West keynotes stood out during the mid-November conference in San Jose, California. The first was by Mark Whitten, General Manager of Xbox LIVE, who used his keynote to highlight four key areas of the Xbox LIVE success story: content, community, curation and control. Echoing some of the insight Myles MacBean shared at Streaming Media Europe, Whitten talked about the move from audience to community, and further showcased the ability of the Xbox to play live and on-demand streaming content from satellite provider Sky as well as Netflix and other content distributors.

The second keynote was by Bill Stone, President of FLO TV, a subsidiary of mobile chip maker Qualcomm. FLO markets a personal, portable digital television that uses a sideband delivery on an overlay network, powering subscription-based delivery of premium content. FLO's overlay network, available in 20 cities, is not unlike the digital TV broadcast sideband transmission technology, approved in the same month as the A/153 ATSC standard. Both allow the delivery of multicast video content as well as on-demand files ranging from complex file delivery (video) to simple file delivery (PDF, text, etc.).

Finally, EPiX chief digital officer Emil Rensing of EPiX talked about a licensing model shift. EPiX is owned by Paramount, Lionsgate, and MGM, allowing the studios to rapidly roll out a "TV Everywhere" solution which provides both a cable TV channel of EPiX content as well as online consumption of the same content as part of a monthly bundled subscription package.

"We're not talking about theoretical, we're talking about a product today," said Rensing. "We launched three weeks ago with real customers. We now have a cable TV channel, with an east coast feed and a west coast feed, as well as a video on-demand service."

As a hint toward what's coming at this week's Consumer Electronics Show (CES) in Las Vegas, Boxee started off December's news by unveiling the prototype Boxee box (though not the software to power it) in New York. The Boxee box is part of a series of devices that attempt to provide over-the-top delivery of streaming content from the web to the living room. Coupled with catch-up services, which allow television viewers to catch up on missed shows via online viewing, the move to integrate streaming and consumer devices began in earnest in 2009.

Apple also announced it had purchased Lala.com and its cloud-based music streaming service, opening the door toward an online version of iTunes andiPod touch / iPhone music delivery.

Finally, Amazon announced that its cloud service, which allowed file storage and delivery, would move further into the traditional CDN space by offering Flash streaming. Amazon had pushed storage prices down when its cloud service ramped up in early 2009, and the anticipated effect of Flash streaming on Amazon may continue to lower margins for CDNs as we head into 2010.

This brief overview of 2009 is just a glimpse of what occurred in a fairly eventful year for the streaming industry. As I mentioned at the outset, this overview doesn't include many of the other key events in various industry verticals, so be sure to check out the 2010 Streaming Media Industry Sourcebook for additional insights.

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