its inherent video quality compromises, Internet video broadcasters
known as "webcasters" are developing new distribution
models that are leading the way into what they expect to become
a financially viable medium. In the meantime, according to Mark
Cuban, president of AudioNet, the Internet's largest broadcaster,
"Not one web site has succeeded financially with original multimedia
content." Of course, that's not stopping thousands of web sites
from trying, including many of AudioNet's customers.
the same time, the Internet itself is emerging as a significant
advertising medium. As a result of a recent study conducted by Coopers
& Lybrand, the Internet Advertising
Bureau has announced that 1997 Internet advertising reached
a record $907 million with fourth quarter revenue increasing 48%
over the previous quarter. The IAB emphasized that Net advertising
is growing faster than any other medium and is on track to surpass
outdoor advertising which was estimated at 1.4 billion in 1997.
another reference, Yahoo!, whose recent stock run-up was said to
be testimony to the fact that investors are taking the Internet
more seriously claimed web traffic of 95 million "hits"
per day during March, 1998 (up from 65 million in December, 1997)
and an "audience" of 12 million registered users.
which calls itself "The Broadcast Network on the Internet,"
claims to deliver more live and on-demand multimedia broadcasts
than any other company in the world. Among its thousands of programs,
both live and on-demand, are continuous broadcasts of over 260 radio
and television stations and networks. This is more than one third
of the 650 radio and TV stations that RealNetworks
lists in its Timecast
1998 goal is to deliver over 100 live broadcast TV stations over
the Internet. Presumably, this programming will complement AudioNet's
recent licensing of 35,000 hours of video content including sports
networks and "greatest hits" and "greatest moments"
type video programs that, to this point, have been more commonly
distributed to the home video market.
says that AudioNet's success will come through the sheer quantity,
not necessarily the quality, of what it offers. In Internet-speak,
this is called "content aggregation" or the bringing together
a large variety of content linked to one web site. Cuban says, "Money
is made on the net through aggregation. It's not a hit driven medium."
He goes on to explain that with the millions of web sites to choose
from, "the cost of generating demand is enormous." And
then he reminds us that even major players like AOL and MSN have
backed off from their commitments to produce original content.
the streaming audio and video software company which makes RealPlayer
5, the technology used by AudioNet and most other webcasters, is
also using "content aggregation" as part of its own efforts
to grow the online broadcasting business. Calling its strategy a
"developer aggregation model," it has linked its popular
browser plug-in player directly to its Daily
Briefing web site which offers 70 programs which are updated
on a daily basis including reports from ABCNews, Fox News, National
Public Radio (NPR) and Internet-only broadcaster CNET Radio.
Herrmann, RealNetworks Managing Producer, Media Publishing emphasizes
that these daily programs give users "a reason to sign on."
Herrmann believes that Internet broadcasting as a new medium is
"just starting to get interesting" from a commercial point
of view, but may reach "critical mass" within the year.
Meanwhile, in addition to its online media streaming server software
sales and aggregation strategy, RealNetworks is also focusing on
its Real Broadcasting Network (RBN), a high-bandwidth hosting collaboration
on the Internet, originally produced programs are caught in a commercially
unproven middle ground that is somewhere between cable TV programming
and local access. Josh Harris, President, Pseudo
Programs, Inc. calls this "micro-casting" which is
the next level of highly targeting programming that's more finely
targeted that cable's "narrowcast" networks. Located in
New York City's Silicon Alley between Broadway and Houston Street,
Pseudo's "network" offers an unlikely, eclectic mix of
programs that include edgy music, sci-fi and high-tech interviews,
poetry and even wrestling. These original Internet-only programs
are produced with DV-format video equipment and also include a custom
online chat environment. Harris claims that his programs have "good
production values which can compete with other major entertainment
believes that by focusing on niche programming like his "Go!
Poetry" program, for example, he can "own" small
but valuable franchises. He says he believes in building "small
castles with high walls" and is proud to be building small
but loyal audiences. For example, he says, "We're number one
in the market for on-demand video poetry programming."
says, "TV networks count their audiences in millions. Cable
networks count theirs in the hundreds of thousands. We count ours
in tens of thousands." Underscoring the value of aggregation,
he says, "We can be profitable at tens of thousands times 500
shows on 30 channels."
now, Pseudo is also pioneering a new Internet distribution paradigm
by partnering with "audience aggregators" like search
engines and even RealNetworks. Pseudo recently announced a non-exclusive
deal whereby the search engine Lycos
is offering its Infinity Factory sci-fi program, and Pseudo has
also placed its "88 HipHop" and "Street Sounds"
programs in the RealNetworks Daily Briefing.
Cuban says that to be successful on the Net, audio and video programs
will require server and bandwidth infrastructures in order to grow
to financially viable levels. He claims without the support of a
service like his or the Real Broadcasting Network, "They will
hit a ceiling on bandwidth."
line, Cuban says that "It's the aggregate impact that should
worry broadcasters." He says that to the big networks, cable
doesn't mean much if you just look at individual networks like Court
TV or MSNBC by themselves. "But if you look at the aggregate
sum of all cable networks, they represent significant competition."
the moment, the webcaster's share of available advertising dollars
is still extremely small. However, with thousands of web sites offering
audio and video content, in aggregate, the online slice of the media
pie is certain to continue to grow.