The Golden Age of Streaming

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Comcast’s decision to cap monthy broadband usage at 250GB is being decried as the end of the Internet as we know it. Maybe so, but it can also be seen as the dawn of the Streaming Era. As the Olympics drew to a close with big numbers – 75.5 million streams (NBCOlympics.com), 40 million (BBC), another 130 million from the European Broadcasting Union, and 100 million Chinese viewers – the networks were already moving on by serving the Democratic National Convention in HD. CBS offered an after-convention netcast with Katie Couric, and CNN promoted “full and complete” streaming coverage of all speeches.

The Comcast move seems more focused on the politics of the FCC decision to rule out Comcast’s filtering of P2P traffic. But BitTorrent and other such traffic is all about downloading, not streaming, and the advent of new look-ahead streaming capabilities in Silverlight suggest that streaming can accommodate DVR-like functionality that makes the value proposition of “owning” the data on a local drive much less important.

It used to be that having physical control of entertainment and other software was critical to the user experience. Record and film companies kept accelerating the quality levels of their products to stay ahead of the pirates and the growing ability of consumers to capture and archive content off the radio and television networks. But as broadband became more available as competition between telcos, cable, and satellite increased, sharing of MP3s and DVR time-shifting had an oddly counter-intuitive impact.

First, the Netflix strategy made renting movies a less onerous process, with no late fees and a large catalogue to choose from. When Blockbuster and Hollywood Video adopted similar MVP programs, the cable and satellite companies were forced to counter-attack with on-demand offerings that were even easier to acquire and in fact were spooled from servers rather than downloaded to home machines.

This, of course, is the same shift software has undergone from shrinkwrap to service, from Outlook to Gmail, Office to Google Apps, and from the hard drive to the cloud. In effect, productivity apps are now streamed to and the data from the user. With the data stored redundantly in the cloud, we are more comfortable with a streaming situation than with the former illusion that we “owned” our data locally.

Once the user has undergone this reworking of trust, devices such as the iPhone and the Slingbox have extended the notion of streaming to the car, the hotel room, to a friend’s house, anywhere. Podcasts are still an efficient way to transfer data via iTunes to the iPhone or iPod, but with 3G beginning to make its way into AT&T service areas, soon streaming will rival satellite and terrresterial radio on the go. And the Slingbox methodology of pulling HD from home to a laptop will be adopted by iPhone users for music via bluetooth to car systems.

The shift seems to be from ultimate quality to ultimate utility, to fit the data into the time available to consume it. Streaming content is far more efficient than downloading, since you don’t need to cache all the material you don’t get around to seeing. And the growth of social networks means more and more of us will start taking advantage of streaming devices to establish relationships with friends to “share” information outside of the reach of DRM.

Once the underground streaming economy reaches a critical mass, media companies will reach some form of accommodation. Whether it takes the form of advertising supported models or the emergence of viral talent going “direct” to consumers, the end result will be the Net-based delivery of high value content under user control. Comcast’s cap will be seen not as the start of a decline but rather the flowering of the Golden Age of Streaming.

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