Streaming media comes of age

15 May 2006

Demand for streaming media is on the rise, according to a recent report from Insight Research. The research firm notes that during the past two years, the streaming media industry - representing technology that transfers rich digital media across a network without requiring local data storage - has evolved from the introductory phase to the proven model stage.

At this point, the report notes that the technology works well, consumers are very interested in it and the main emphasis has changed to developing applications and communication tools that will 'restructure the entertainment experience for consumers and increase information productivity for businesses.'

The Insight report states that streaming video and music distributed across the Internet to a mobile device will generate more than $27 billion in 'network-derived and content-derived content' into the US market within the next five years. The streaming market is expected to grow at a compound annual rate of nearly 32% through 2011, thanks to demand for on-demand audio, on-demand video and accompanying advertising revenue.

However, Robert Rosenberg, Insight's president, says these growth forecasts are conservative and could be dramatically underestimated if IPTV quickly gains favor and/or 3G gains momentum in the US market.

The challenge for wireless carriers, of course, is to capitalize on this robust opportunity. So far in the US market, much of the action in mobile streaming media has revolved around sports. In many cases, carriers have partnered with major sports organizations such as Major League Baseball, the National Basketball Association and the National Football League to provide subscription access to updated sports scores, video and audio highlights and actual game broadcasts. (MLB pioneered professional baseball telecasts using streaming media over the Internet and has now transitioned delivery of streaming media to the handset.)

The real question is, will streaming media be able to move beyond its current stage and offer truly valuable personalized content over mobile phones that more that just sports or music nuts will be willing to pay to receive‾ Does the enterprise truly have a need for it‾ And will the business model that ultimately emerges be paid content or ad-supported content‾

We might not have that long to wait for an answer. Insight notes that broadband residential subscriptions in the US are expected to reach 75% of US homes by 2011. Broadband users are most likely to demand streaming content. As they get used to the technology on their computers, they'll seek the convenience on mobile devices. They already know streaming media works well, but how much they'll be willing to pay; whether the content they desire will be available; and how the mobile carriers will derive their revenue stream are all issues that have yet to be fully resolved.

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