• by Nate Elliott , December 20, 2004

AS WE RETURN OUR ATTENTION to the leaders in streaming media advertising, we'll take a look at a site that doesn't actually offer streaming video.

ESPN Motion uses pre-caching, rather than streaming, to deliver video to users. The difference is one of both technology and picture quality. Streaming video typically requires that a user have a standard video player, such as Windows Media Player or RealPlayer, installed on his machine.

Because the vast majority of Internet users have this software already installed, almost anyone can watch streaming video. But since streaming video downloads to a computer at the same time it's playing, the video size and picture quality are limited by the speed of the user's Internet connection.

Pre-caching solves this problem by not displaying the video until it's been fully downloaded. Using this technique, sites can offer users video at any size and picture quality. One of the earliest examples of pre-cached video was BMW Films, which allowed users to view full-screen, DVD-quality videos all the way back in 2001. By comparison, most streaming video at that time covered less than 10 percent of a computer screen and offered video quality that was inferior to even broadcast television.

While it solves the picture quality problem, pre-caching creates a different problem; a user needs to come and ask for the video well in advance of viewing it, and typically must download and install special software as well. To set up ESPN Motion, a user must install a plug-in that then downloads new video content to his computer as it becomes available. The user can watch the video clips at ESPN.com in a standard-sized online video window, or expand the window to approximately four times its original size without any noticeable drop in picture quality.

Unfortunately, most Internet users are confused by software installations and afraid of viruses, and therefore won't install pre-caching software. The trade-off for significantly improved picture quality, then, becomes significantly reduced audience size.

ESPN certainly suffers from this problem. While the ESPN.com site draws nearly 15 million users each month, ESPN Motion delivers less than 30 million video clips each month to only 1.5 million users. The largest streaming video site, Launch Music on Yahoo!, delivers over 250 million video clips each month to around 12 million users - making it 10 times larger than Motion.

But once you get past the relatively small audience size, there's a lot to recommend. First, of course, is the picture quality. Many advertisers still worry about the picture quality of online video ads. With ESPN Motion, however, those advertisers know that their ads will be shown in the best picture quality, and at the largest screen size, available on any major Web site. Motion also offers advertisers the staples of all ESPN properties: high-quality content, and a coveted, hard-to-reach demographic. These advantages have helped ESPN Motion attract a variety of top advertisers, including Sony, Paramount, Lexus, and American Express.

The biggest problem for Motion will always be audience size. As advertiser demand increases quickly, and consumer adoption increases more slowly, ESPN will need to generate more ad impressions. The ad ratio, currently set at one ad per video clip, can't be increased. The only way to generate more impressions will be to attract more users to the video service. In the face of advertiser pressure, it will take courage for ESPN to not revert to the larger audience, but lower quality, of streaming video.