Like the multitude of new buds blooming in the Spring, the world of online video continues to grow at a surprisingly rapid pace while sprouting marvelous new branches.

As I spent a day in May at the RealNetworks Conference in San Francisco, I found rich examples that underscored the accelerating intensity of the video Web market's growth as well as some of its innovative trends. As a result, this conference set the stage for this month's Video Web column.

The conference itself was a demonstration of the rapid growth of the streaming video market (see the stats below.) RealNetworks also emphasized the emergence of new forms of digital distribution with its impressive new RealJukebox software. At the same time, I was pleasantly surprised to discover a webcaster called Liveonthenet.com that has a neat and profitable online video business. And, on the production side, I was amazed to witness a flipping of the production process where -- believe it or not -- web animation ended up being a critical component of a broadcast TV commercial.

These stories "and more" make up this month's column.

MARKET MARVELS
The vibrancy of the RealNetworks conference itself was a story. Not only was it a colorful blend of broadcasters and webcasters, producers and programmers, designers and digerati; but at 3,700 attendees, it was roughly triple last year's size (approximately 1,300). This was quite a strong showing for what has previously been considered a fairly narrow niche technical conference.

The reason, of course, is that streaming media as pioneered by RealNetworks (among others) is starting to come into its own. The acknowledged streaming leader, RealNetworks, claims 60 million registered users. More interestingly, according to RealNetworks CEO, Rob Glaser, researcher Media Metrix says that there are about 45 million current users of RealNetworks software with about 1/3 of that number or 15 million people who have used RealNetworks software in the last reported month (April, 1999). Another stat that I found even more significant (especially when you consider that audio traditionally foreshadows video on the Internet, the way radio foreshadowed TV) is that RealNetworks claims that there are more than 1,750 live radio stations who broadcast over the Internet using RealAudio.

And to give you another perspective on how fast this kind of excitement can spread, RealNetworks has claimed that its new RealJukebox music program which was announced just days before the conference received one million downloads during its first ten days of availability. Despite the fact that this was still a "beta release" of RealJukebox, RealNetworks said that this new software introduction, which used both site downloads as well as RealPlayer G2's AutoUpdate feature, was "faster than any new software product in history." (Although what's a little misleading in those numbers is that RealJukebox's system requirements include a 200mhz PC. Thus, presumably many of these downloads, especially those using the AutoUpdate feature, will be onto systems that are not up to RealJukebox's requirements.)

DIGITAL DISTRIBUTION
Not only does online audio have an advantage over online video because it is not as bandwidth intensive, but now with the RealJukebox product, online audio also leverages the fact that music's predominant distribution platform is also digital (i.e. the CD vs. analog TV or tape). As an inspiration for video producers who are moving gradually toward a world of digital distribution, RealJukebox was impressive because it really puts new power into the consumer's hands.

Basically, RealJukebox enables a PC jockey to bring together the most popular forms of digital music - CD cuts, MP3 clips (see "Downloading Lives!" in the April, 1999 Videography) and selections compressed with RealNetwork's own RealPlayer format - within one wired desktop application. The result is that you can use your PC as a "jukebox" to create digital playlists. You can then either play your sequenced music straight out of your PC, or output them to a digital "walkman" type device. And RealNetworks even previewed a new digital player called the Lyra which is being built by RCA/Thompson (a consumer electronics rather than a computer peripheral manufacturer) specifically for integration with RealJukebox. The RCA Lyra is expected to be released in the third quarter of this year and uses a small CompactFlash memory card to transfer music via a computer's PCMCIA slot.

There is more to RealJukebox than I have space to detail here, but you can find much more information at http://www.real.com/products/realjukebox/index.html. For us video folk, this next generation digital media application underscores the fact that desktop computers (as well as other electronic "appliances") can be expected to develop much more interesting digital video delivery capabilities in the very near future. RealNetworks claimed that RealJukebox makes the PC "the best way to listen to music;" and given the control that it delivers over an individual's library of hundreds if not thousands of music selections, their hype was impressively close to reality.

NEW PROFITS
Perhaps the most interesting individual web site success story that I heard at the RealNetworks conference was the presentation by Huntsville, Alabama-based Liveonthenet.com/Cornerpost.com. This unique and profitable business incorporates two web sites and a proprietary banner advertising engine.

Essentially, Liveonthenet.com is a live events site that produces and aggregates high-profile events such as big name music concerts and NASCAR races. However, in a clever piece of e-commerce innovation, the same company runs a subscription site for small businesses called Cornerpost.com. According to President and Executive Producer Tim Erwin, some 20,000 small businesses pay $29 each month for a membership that includes 300 to 700 web banner ads on Liveonthenet.com webcast pages as well as listings within the Cornerpost community.

According to Erwin, the real closer is that the proprietary banner display engine called "Focused Eyes" targets the banners geographically which enables what Erwin called "local affiliate advertising in EVERY market." The connection is that in order to enjoy the event webcasts on Liveonthenet.com, viewers need to get a free "ticket" which requires them to give their demographic and geographic information. The result is that, for example, web banner ads for a local car dealer in Detroit only appear on the screen of viewers who are within that geographic area.

The bottom line result of this computer-enhanced, web-based business is that Erwin says that his company did $8 million in revenue last year and produced the almost unthinkable for a web business (drum roll, please): a profit of $1.5 million.

ONLINE PRODUCTION GOES BROADCAST
The other case history that I heard at the RealNetworks Conference that I found unique was a production story. As my regular readers know, I like powerful, but low cost animation and production tools. But one hardly would consider a web tool like Macromedia Flash appropriate for broadcast production work. Think again.

This story stars and was graphically illustrated by the online consumer electronics retailer called 800.com. Initially, their commercials (see illustration) were created as streaming media and were placed within RealNetworks programming like the Daily Briefing, Comedy Central, and Film.com, very much in the same way that TV spots are placed inside TV programs.

These spots were created using Macromedia Flash (which writes RealFlash files for streaming). Because, as I've pointed out before, Flash uses vector graphics which can be animated in a far more colorful and impactful way at low bandwidths than video or even GIF animations. This is because the data in Flash's vector graphics describe only the outlines of solid color objects rather than pixel intensive bitmaps. The result is that the file sizes of each frame are a small fraction of fully rendered bitmaps and scaling the size of a graphic neither adds to the file size nor does it decrease in resolution the way a bitmap does.

It turns out that with the right kind of graphic style (one that makes use of solid colored vector graphics, Flash's flexibility can be applied to higher resolution production as well. According to the 800.com production team which included director of creative services Doug Alexander, writer Mike Vaughn and animator Ewan Croft, Flash gave them, "The kind of freedom that you get on a high-end production system" at a small fraction of the cost -- as long as you used vector graphics.

Because they are a web company, this approach maximized the impact of their colorful digital assets, and graphics originally designed in Adobe Illustrator for their web site ended up in their broadcast commercial. This production path was made possible by the fact that Flash will export a 724x486, 30 fps digital movie. In this case, the animated spot was originally exported as an AVI file, converted to QuickTime in Adobe Premiere, and then transferred to Digital Beta video tape. For the broadcast spots, the post-production included an audio layback in a Digital Beta edit suite.

MORE TO COME
As you can see, it's a wild web world that seems to keep getting better. Hey, rapid growth, digital distribution, profits, and low cost production tools. What more could you want? That's why I always say, if you know what's good for you - and I mean especially you, video producers - you'd better stay tuned to the video Web.