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Futurewatch 2007: The Blurring Line Between Entertainment and Enterprise Streaming

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Sometimes the only thing you need to "predict" the future is a unique vantage point that, more often than not, derives from unique access to information. Using the insight we’ve gained from working for, with, and beside hundreds of our customers—many of whom have been at the forefront of some of the world’s most advanced streaming implementations—we hope to provide you with a unique view of things to come. It’s their experiences—some predictable, but many entirely surprising—that I’ve tried to summarize in this article to offer a preview of how your organizational communications may evolve, and an idea of what to anticipate in the creation, delivery, and consumption of rich media communications in the next 12–18 months. Before we dive in, however, I’d like to start with a broader look at the macro forces at work in our industry and how they’ll continue to shape our landscape in the years to come.

Following the Money Trail
Although the dust has yet to settle on 2006 as I write this, the year will undoubtedly be remembered as a pivotal one for streaming media. In 2006, the "tomorrow" we had been evangelizing about for years finally arrived and—for the first time in recent memory—solutions across the streaming spectrum were enthusiastically adopted in their respective markets.

This enthusiasm for streaming media’s coming of age was perhaps best evidenced in the private equity and public markets. DivX, a developer of streaming codecs, had a successful public offering in February and since then has seen its shares climb by nearly 70%. We also witnessed dozens of private equity financings in the industry, including the notable investment of $130 million by Goldman Sachs in Limelight Networks. The excitement was paralleled on the mergers and acquisitions front, with Google’s acquisition of YouTube, Comcast’s acquisition of ThePlatform, VeriSign’s acquisition of Kontiki, and the acquisitions of both VitalStream and NineSystems.

Whatever your interest in finance, the impact of these events should be widely appreciated and broadly beneficial to our industry. If you consider that about 25 cents out of every dollar raised will go into research and development, then these investments should start a broad chain reaction that will enrich many facets of the streaming ecosystem. Increased R&D will lead to better products, which generate increased publicity, which attracts more talent, which facilitates even greater knowledge transfer, which further accelerates product development, and so on.

The industry also received strong endorsements from technology heavyweights that have historically paid only cursory attention to streaming. Cisco made headlines by declaring an aggressive commitment to streaming, buttressed by CEO John Chambers’ declaration that the revenue opportunity demanded attention even by Cisco’s lofty revenue standards. In the span of a week, Cisco announced the release of appliances optimized for streaming, as well as a system for managing the distribution of streaming content. Similarly, IBM initiated an aggressive digital media program and has worked diligently to align itself with the leaders in the streaming industry. When players of this size recalibrate their digital media strategies, it is evidence of both the maturation of the technology and its rising prominence as a key driver for application and infrastructure investment.

A New Generation of "Decision Makers"
Consumers—whether for entertainment, for work, for information, or for education—now fully expect to create, publish, locate, view, download, and replay content with ease whenever they choose on a variety of devices. Evidence of their increased appetite for digital media is everywhere, from the popularity of YouTube, Google video search, and the Apple iPod to the avalanche of available online consumer-generated and professionally produced content. This broad shift in expectations has crossed the entertainment line and now also applies to consumers of corporate, agency, and educational content.

In the coming year, the impact of consumer-generated video will be felt in a variety of ways. As content creators evolve from experimenters to experts, we will see hobbyists making demands formerly reserved for professionals. The masses will lean on Microsoft, RealNetworks, Adobe (vis-à-vis Flash), and Apple to provide the ability to create higher-quality video without specialized encoding expertise. They will also put pressure on digital video software suppliers to produce greatly enhanced editing solutions for encoded video. Similar demand will grow for one-touch publishing and hosting, as well as basic media management, such as the ability to track viewers and assign expiration rights and viewer privileges.

Although the democratization of content creation will create a new generation of "experts," professional content creators will continue to play an essential role in the streaming industry. While we anticipate that the demand for professional content creation services will remain strong, we feel that new opportunities will also emerge for the provision of strategic services, such as "best practices" consulting, solution design, solution management and administration, as well as large-event production services.

In addition to dramatically impacting content creation, these same newly empowered content generators also represent an enormous and rapidly growing body of content consumers. They will increasingly demand better content quality, better content delivery, and improved content search—whether via metadata, speech-to-text, or other emerging methods. They will want search results grouped into categories that can be quickly judged relevant or disregarded or, alternatively, they will want results tailored to their own identity (e.g., student, professional, home user, etc.). They will want to categorize, tag, vote for, and otherwise weigh in on and collaboratively produce content. The dynamic, information-intensive nature of streaming video should foster an alliance between search and content management that other industries were unable to achieve. Otherwise, 2007 will go down as the year that users spent an unprecedented amount of wasted time trudging through irrelevant content.

And while we may have little influence on the substance of music and movies, our technology is literally shaping the future of those industries. Technology and services companies have proven—whether through download services, subscription services such as RealNetworks’ Rhapsody, or ad-sponsored websites like CNN—that online media is the unavoidable brave new world of entertainment. The liberation of content distribution will continue to pose new opportunities and risks for a variety of industries. The news in 2007 will revolve around which telecommunications, cable and wireless companies, content delivery networks, and traditional broadcasters are able to exploit these evolving opportunities and which ones miss the boat.

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