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Streaming Media
The Moving Picture: Evolve or Die
Posted Oct 1, 2002 Print Version     Page 1of 1
  
 
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After working in technology for over 18 years, I'd like to think that I understand the sub-currents that flow in the marketplace, the doctrines that dictate which companies will succeed, which will fail, and perhaps most importantly, why. Of course, then I remember that I dismissed the Internet as a techie fad, check my vastly deflated tech stock portfolio, and question whether I know anything at all.

That said, one of the more intriguing doctrines I've seen goes as follows: Whenever a technology becomes mainstream, it means the death knell for most of the early market pioneers. It's not the "WalMart destroys the downtown shopping zone district" syndrome as much as the reality that once a function becomes crucial to sufficient numbers of users, it shows up as standard hardware or as a feature of the operating system. Sadly, the early pioneers, who truly drove the product to mainstream status, seldom share the riches.

For example, CD-ROM and DVD-ROM drives, once sold only as upgrade kits, are now standard fare. Windows has basic CD-R functionality, and all audio jukebox products can burn audio CDs. Apple has long included networking in their Macintosh operating system, and both Microsoft and Apple include media players with their operating systems.

AOL has added browser functionality to its product offerings, as Microsoft did with Internet Explorer. Spell-checkers and thesauri, once standalone products, are now components of word processors. Basic but useful video editing and DVD burning capabilities come standard on any Apple computer with a FireWire port, as does Jukebox functionality.

In each case, once the OS behemoths welcomed the technology into the fold, it inevitably signaled the decline of standalone companies offering similar functionality, whether powerhouses like Novell or Netscape, or smaller companies like Mosaic. Especially in high-profile markets like streaming media, Microsoft and Apple will continue to develop their respective player and jukebox offerings until it becomes increasingly hard for third-party companies to charge for their products.

Interestingly, the same natural phenomenon occurs in the computer trade press, where I earn my monthly mortgage payments. Until 1995, to reach high volume computer buyers, you advertised in magazines like BYTE (rest in peace), PC Computing (six feet under), Windows Sources (bought the farm) or Windows Magazine (pushing up daisies with the rest). Now you advertise in Sports Illustrated, BusinessWeek, Playboy, and Cosmopolitan, who cover technology only tangentially, if at all.

In all these instances, whether computer company or magazine, the ultimate demise wasn't caused by bad management or product failures. Rather, the market they were serving got sucked up into the mainstream, and they had nowhere to go.

So, you ask, what prompted these musings, and why are they here in EMedia? Actually, it was a T-shirt I received from RealNetworks, celebrating its latest Helix Server.

Sherlock Holmes once drew a police inspector's attention to the "curious incident of the dog in the night-time." What was curious? The dog didn't bark, pointing to its owner as the perpetrator.

What was the curious thing about the T-shirt? No Real logo of any kind, or even a mention of the company name, which is startling for a brand-driven company like Real. A PR contact attempted to explain it away as part of their multiformat support, but I'm not buying.

Methinks that Real long ago recognized that Internet streaming is becoming too mainstream to survive as a separate business. On one side, there's Apple and Microsoft giving away server and player, on the other, the specter of MPEG-4, now a noisy tempest in a teapot, but very possibly a vibrant standard someday.

So Real has been aggressively promoting their fee-based GoldPass service that's essentially an Internet-based cable TV channel. Real started with Major League Baseball, and then added the NBA and media on CNN and other outlets that you can't access without GoldPass. Next up is college football, with the ever-popular Notre Dame a recent signee. Real reported 750,000 subscribers with their last quarterly numbers, and subscription revenue that was growing almost as fast as their combined software and advertising revenues were dropping.

To me as a transplanted fair-weather Braves fan (is there any other kind of Braves fan?), Real's product offering is getting pretty compelling, especially since the Braves have enjoyed lots of good weather. Pulling it all together, of course, is my lovely DSL. Video at 300Kbps is getting startlingly close to truly watchable. Won't be long before DSL and RealNetworks will be in my living room as an alternative to my "57 Channels and Nothin' On" cable company.

The big question, of course, remains: Do we care about Real's strategic change? Will they fire their software engineers, buy Armani, and move their headquarters to Hollywood? Perhaps it's a consideration for those buying server-based products, but the short-term advantages of Helix, like multiformat and multiple OS support, are still very compelling for many producers. Besides, I would expect Real's software products to be around for a long while, if only to support their network efforts.

For me, the true importance is the message I see shining from a beacon from Real's Seattle-based headquarters. "Evolve, or die," it says in big, bold letters. And for me, who surfs technology waves for a living, it's a message I can't hear often enough. After all, though my stock portfolio tells me that my foresight isn't 20/20, it's better to look forward, predict, and take action than to do nothing, and later end up wondering, "Who moved my cheese?"

Print Version   Page 1of 1
  
 


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