• by Adam Bernard , May 2, 2001

From advertising to entertainment, streaming media is currently being used and experimented with in quite a lot of ways. A recent study conducted by Market Decisions Corp. showed that one in four companies defined as "large enterprise businesses in the United States" are currently using streaming media in their organizations in some way. The study also showed that streaming usage has doubled in the past 18 months.

Statistics like that are bound to make streaming media companies optimistic. "I think streaming on the web is growing, and getting stronger and stronger," said Blair Lyon, President of TMXinteractive, a rich-media email company.

But it's important not to overestimate that strength. Jay Stevens, Director of Marketing for Radical Communication, points out, "I think it's really just beginning. People are beginning to adopt rich media." Stevens said Radical Communication, whose flagship RadicalMail allows for streaming audio, video and animation, is seeing a significant increase in the level of activity quarter to quarter.

John Vincent, CEO of EyeWonder, feels that most of the technology and ad industry's current involvement with streaming is more exploratory than business-oriented. He says that 25% of the demand is actually placing business, while 75% is "aggressively trying to understand how to leverage the technology."

So what's the best use of streaming right now? Opinions vary.

Scott Bennett, Senior VP of Sales and Marketing for IT Network, says, "I don't know if there is a killer application. It's a matter of hitting a bunch of singles." Bennett does admit, however, that 80% of the content requests his company receives are in the entertainment sector.

Radical Communication's Stevens agrees, saying, "The best use depends on the audience, and the application. People are still trying to figure out what works, just like in the early days of television, when people would read from paper like radio announcers. It took a while to see what worked."

TMXinteractive's Lyon notes, "The future will need more improvement in the hardware area, bandwidth, and be more in a leisure type format. It needs to hit a critical mass, a combination of culture, hardware, bandwidth, and learning how people act."

Stevens expects the entertainment side of things to really get big in a few years, but says that will probably be in 2003-2004, when the technology gets better.

So what role does advertising play in all of this?

Streaming media ads have been shown to deliver five times the click-through rate of a traditional static banner ad, according to a recent Measurecast/Yankee Group study. Further, 65% of agencies that have tried steaming media report that they will recommend it to their clients in the next 12 months.

Vincent openly says that advertising will be the best use for streaming in 2001-2002, and Stevens feels that email will migrate to HTML, making it easier to use targeted streaming ads. Stevens' company, Radical Communication, has just entered into a partnership with DoubleClick to deliver rich media and interactive email.

Bennett, though, despite saying advertising is where the money will be in the future, sees a potential problem arising, saying, "I see consumers paying a premium to be ad-free."

Products like AdSubtract filter out ads, and some websites are offering their members subscription services that allow access to an ad-free version of the site. Recently, Salon.com came out with an ad-free service, for a charge, and other sites are considering the option. 1Wrestling.com recently posted a letter to readers apologizing for the number of ads, and asking if a paid service for an ad-free site would be something the readers would go for. How much of a threat this young concept actually is will be revealed over time.

If streaming is to become advertising's killer app, the door to success will almost certainly hinge on how intrusive these ads are. Vincent feels mute-ability is a concept that should be incorporated into every streaming ad, saying "you can mute your TV, so you should allow a consumer to mute your ad." He realizes this is a disadvantage, but something that ads need to have.

That being said, is streaming advertising really going to work? It's a wait-and-see game as of now.

- Adam Bernard may be reached at Adambernard@mediapost.com