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This is the first installment in a series of “What Is…?” articles, designed to offer definitions, history, and context around significant terms and issues in the online video industry.
Contents
Executive Summary
Streaming media usage has grown exponentially over the past few years, both for entertainment purposes and as a vehicle for organizations to market, sell, and support their products and services, as well as for internal communications and training. For many such organizations, streaming video has transitioned from a “nice to have” curiosity to a mission critical technology.
At the same time, streaming media technologies have transitioned dramatically since the early years, as has the challenge of reaching the full range of target viewers. Fortunately, new third-party alternatives for distributing streaming media have emerged as well, and may offer the best option for many organizations.
As streaming media grows in importance, organizations that distribute streaming media must continually monitor and evaluate market trends to ensure that they choose the technologies that deliver the highest quality streams possible to the most relevant segments of their target viewers.
Streaming Media Technology Components
Streaming technologies like Adobe Flash, Apple QuickTime, and Microsoft Windows Media and Silverlight all include certain common components in their solutions. These include a player to play the media on the viewer’s computer or mobile device, a defined file format or formats that the player will play, and often a server component that offers features like digital rights management and live streaming.
All streaming technologies use compression to shrink the size of the audio and video files so they can be retrieved and played by remote viewers in real time. Common video compression technologies, also called codecs, include H.264, MPEG-4, VP6 and VP8, Windows Media Video (WMV), and MPEG-1/2, while common audio codecs include AAC (Advanced Audio Coding), Vorbis, Windows Media Audio (WMA), and MP3.
Note that codecs are typically—but not always—independent of the streaming technology that implements them. For example, the H.264/AAC combination was first adapted by Apple QuickTime, then Adobe Flash, then Microsoft Silverlight and finally on certain browsers for playback via the HTML5 video tag. In contrast, Microsoft’s Windows Media Video and Audio technologies are exclusively used by Microsoft’s Windows Media and Silverlight technologies.
The History of Streaming Media
This history of streaming can be viewed in three separate time lines, one relating to streaming technologies, the next to connection speed and the target device, and the final relating to the growth of third party streaming service providers. Let’s look at each in turn.
Streaming Technology
Real Networks pioneered the streaming audio and video markets, broadcasting the first audio event over the Internet – a baseball game between the Yankees and Seattle Mariners — in 1995, launching the first streaming video technology in 1997. According to some accounts, by 2000, more than 85% of streaming content on the Internet in Real format.
Despite this success, problems arose because Real’s primary business model depended upon the sale of servers, and Microsoft and Apple were giving those products away. As servers from Microsoft and Apple became more capable, Real’s sales inevitably eroded. Or perhaps it was Microsoft’s anti-competitive activities, for which Microsoft paid Real $761 million in a legal settlement in 2005.
In addition, consumers started balking at the intrusiveness of the free Real Player, which installed multiple background processes, made itself the default player for all multimedia content and continuously nagged the user to upgrade. A player that once had been absolutely essential was now being uninstalled in droves, and not installed on newer computers.
The Microsoft Era
Microsoft dominated the computer landscape, giving the Windows Media Player a dominant share of available desktops and notebooks, and from the early 2000 to around 2007, Windows Media was the most widely used format on the Internet and in most company intranets. However, Windows Media Player had a non-customizable interface and depended upon a third party plug-in to play on the Mac, which was just starting to begin its resurgence.
During this same period, web site design was transitioning from HTML to Flash, which offered much greater interactivity and design flexibility. Though Flash had a video component, the initial codecs offered poor video quality and sketchy audio/video synchronization. That changed when Macromedia licensed the On2 VP6 codec in 2005.
The Flash Era
Via VP6, Macromedia (and then Adobe, who acquired Macromedia in 2005), could match Microsoft’s video quality in a brandable player that could be integrated with the rest of a Flash-based site, and was truly cross platform and near ubiquitous. This proved irresistible to most broadcast and entertainment sites, where Microsoft’s share in these markets dropped to single digits by 2010. Microsoft released a Flash competitor called Silverlight in 2007 to stem the tide, but the player never achieved the penetration necessary to convince Flash users to adopt it.
Then, in April 2010, Apple shipped the iPad, which didn’t support Adobe Flash, focusing lots of attention on HTML5, the technology that Apple uses for video playback on its iOS devices. Briefly, rather than using a plug-in based player like Flash, Windows Media or Silverlight, HTML5 uses a player that’s native to the browser to play back the video file.
The Rise of HTML5 Video
HTML5 is the latest specification of HTML (hypertext markup language), the language used to create websites. The specification is currently under review by the World Wide Web Consortium (W3C) and Web Hypertext Application Technology Working Group (WHATWG), and is set to be finalized in 2014. In early 2011, the W3C and WHATWG announced that the specification would be henceforth known simply as HTML; for the sake of clarity, however, we’ll continue to refer to it here as HTML5.
For HTML5 video to function, the user must have an HTML5-compatible browser, and that browser must support the codec used to compress the file. By the start of 2011, only about half of the installed base of browsers was HTML5 compatible. Though that will change with the release of Internet Explorer 9, HTML5 won’t achieve the 96% penetration enjoyed by Flash for many years to come.
In addition, codec support within those browsers was split. Mozilla Firefox, Google Chrome, and the Opera browser supporting Google’s WebM, but not H.264. Apple Safari (and all iOS devices) is compatible only with H.264. Internet Explorer 9 will ship with an H.264 player, but not a WebM player, though it will play WebM files if the codec is otherwise installed on the user’s computer. While not an absolute show-stopper, this split means that organizations seeking to be fully HTML5 compatible must support at least two codecs.
In addition, HTML5 doesn’t yet offer features like adaptive streaming, digital rights management, live broadcasting, and many others that are proven components of Flash, Silverlight, Windows Media, and QuickTime. Advanced features like peer-to-peer delivery and multicasting, launched by Adobe with Flash Media Server 4, are not yet on the HTML5 drawing board.
In the short term, HTML5 is most appropriately viewed as a solution for iOS and perhaps other mobile devices, but not as a replacement for Flash or Silverlight for general-purpose computers. However, web sites can certainly implement HTML5 today with fallback to Flash if the viewer connects with a non-HTML5-compatible browser, and any site that extensively uses Flash or Silverlight should at least be thinking about how to integrate HTML5 support into their future plans.
Connection Speed and Target Device
Back in 1997 when streaming video launched, the target market included desktop and notebook users connecting via modem. Today, the range of target players is much more diverse, including low-power mobile devices, set-top boxes, and powerful computers connecting via DSL or cable, and many of which are connected to HDTV monitors. To reach these devices, streaming producers must customize streams for delivery via 3G (or slower) networks as well as 50Mbps broadband.
The disparity in playback power and connection speed has spawned technologies like adaptive streaming, where a single video is encoded into multiple data rates and sizes, spanning the target viewer community. A stream appropriate for playback device and connection speed is transmitted and adaptively adjusted to changing connection conditions and available CPU.
Often these target devices support different streaming technologies, as with iOS devices with HTML5 and computers with Flash. To support the expanding range of viewers, many web sites support multiple streaming technologies, with many producing adaptive Flash streams for computer playback and H.264 streams for iOS devices.
From DIY to OVP
In the early days of the streaming media market, the mantra for virtually all companies who distributed streaming media was “do it yourself” (DIY). That is, companies encoded their videos, created their player, hosted their streams, and maintained the streaming server that distributed the streams. This was possible because there was one de facto technology, however it evolved over time, and a relatively homogeneous target user.
As you’ve read, however, the streaming media market has become much more complicated, with competing technologies like HTML5 and Flash, and a much more diverse universe of connection speeds and playback platforms. The ability to harvest effective marketing data from streaming media consumers has also increased exponentially. This complexity has increased both the CAPEX and personnel cost of effectively delivering streaming video.
As a result, many organizations are turning to online video platform (OVP) providers like Brightcove, Sorenson, and Ooyala to serve as turnkey streaming providers. Operationally, you upload your videos to the OVP, which encodes them into the formats necessary to serve to your target viewers. The OVP provides customizable players for a range of target platforms, including Flash, HTML5, iOS, and others, and embed codes for integrating the player into your web site. The OVP hosts the necessary servers for delivering the streaming media to the consumer and also provides media management and analytics packages.
Interestingly, a number of companies also use user-generated content (UGC) sites like YouTube and Vimeo for a subset of these services. For example, many of the videos presented on IBM’s website are hosted by YouTube. This approach has multiple benefits, including decreased CAPEX and personnel costs associated with hosting the video. In addition, since YouTube is developing their player for millions of streaming producers, they can quickly incorporate new technologies. For example, after the launch of the Apple iPad, YouTube was one of the first services to support it, allowing IBM to deliver videos to the new device simply by updating their embed code.
IBM’s videos are also exposed to the YouTube viewing community, with impressive results. For example, as of early March 2011, on the IBM Smarter Planet YouTube channel, IBM had accumulated more than 3,757 subscribers and more than 2 million video views. The most popular video, “IBM and the Jeopardy Challenge,” had been viewed 613,849 times. While these numbers pale next to the raw exposure of TV advertising, these are all opt-in viewers who chose to watch the videos, and the cost of the YouTube channel is a tiny fraction of television advertising.
Streaming Media Market Landscape
The streaming media market is influenced by a range of companies in varying segments, each with their own power to adopt or reject different technologies. Obviously, some companies participate in multiple segments and exert influence in each.
Streaming Media Technology Providers
The most influential group, of course, are the streaming technology providers themselves, who choose which technologies and services to integrate into their platforms. These include Apple, which provides QuickTime as well as the HTML5-based technology to reach iOS devices, Adobe with Flash, and Microsoft with Windows Media and Silverlight. While not a company per se, the W3C helps set standards for HTML5, including the supported audio and video codecs.
Streaming Media Playback Platforms
Just because a streaming technology provider makes a technology available doesn’t mean that the various playback platforms have to support it. This became obvious with Apple’s decision not to support Flash on the iOS platform, or WebM in its Safari browser. Accordingly, the owners of the various playback platforms also control which technologies get implemented.
In the early days of streaming, the most relevant playback platforms were Windows and Macintosh computers. While Apple and Microsoft still hold tremendous leverage, computer platforms tend to be more open than mobile devices, which comprise the fastest growing segment of streaming media viewers. Because Apple owns both a very popular platform (iDevices) and operating system (iOS), it retains absolute power to control standards adapted by Apple devices. Blackberry also controls the hardware and software used by their devices, though it’s playing catch-up to Apple and other vendors in the video capable mobile market.
Other mobile influencers tend to be split between hardware vendors—like LG, Samsung, Motorola, Nokia, and HTC—and mobile operating system providers like Google (Android) and Microsoft (Windows Phone 7). In particular, Google and Microsoft have to create a mobile platform deemed as marketable by the hardware vendors that select it. This leads to interesting juxtapositions, like Google promoting WebM and HTML5 in its Chrome browser and on YouTube, while integrating Flash into its Android operating system.
Browser vendors like Microsoft (Internet Explorer), Mozilla (Firefox), Google (Chrome), Apple (Safari), and Opera (the Opera Browser) also influence which technologies are adapted. During the early days of the HTML5 debate, it was Mozilla’s steadfast refusal to integrate an H.264 player into its browser that spawned the need for a high-quality alternative, a need that was ultimately satisfied by WebM. Now, Apple’s intransigence and Microsoft’s curious half-in/half-out positioning are preventing WebM from becoming the unified HTML5 standard.
Though far down the food chain in terms of volume and influence, set-top box providers like Roku, Boxee, Apple and Syabas will increasingly affect technology decision-making as their use expands.
Streaming Media Delivery Providers
Delivery providers like OVPs and UGC sites also influence streaming technology adoption. For example, though Microsoft introduced Silverlight in 2007, it wasn’t supported by any OVP until 2010, stunting its adoption. In contrast, OVPs like Brightcove and Kaltura and UGC sites like YouTube and Vimeo were among the first to support the iPad and HTML5, accelerating their adoption.
While there are dozens of providers in both markets, the key OVPs include Brightcove, Kaltura, Ooyala, Sorenson Media, Powerstream, and ClickStreamTV, while the most notable UGC providers are YouTube, Vimeo, Viddler, Metacafe, and DailyMotion.
It takes big pipes to deliver HD-sized streaming video, which is why most high-volume streaming publishers and OVPs use content delivery networks (CDNs) like Akamai, Limelight, and Level 3 to distribute their videos. Though they exist largely behind the scenes, CDNs have a significant impact on technology adaption.
For example, high-volume Flash streaming wouldn’t be possible unless CDNs installed Flash Media servers to support the traffic. Many CDNs quickly adapted the technology that enables adaptive streaming to Apple iOS devices, helping to make that entire channel viable for streaming producers. Absent that support, the complexion of iOS devices as a potential market would have been completely different.
Like OVPs, there are multiple CDNs, large and small. In addition to the three listed above, notables include Global Crossing, Amazon Cloudfront, Bitgravity, Microsoft Windows Azure, and Edgecast Networks.
Why It Matters to You
If streaming media is mission critical to your organization, you need to make technology decisions that allow you to most affordably reach the largest relevant groups of target viewers with the highest quality streams. As of early 2011, streaming media producers need to be asking themselves some critical questions, like:
- Do we need to start delivering video via HTML5, and if so, when?
- What’s the best strategy for reaching mobile devices?
- Should we consider an online video provider?
Carefully monitoring the trends and influencers discussed above will help answer these questions.
