"Converging Video and the Internet"
April 1999

On the first day of this month, search engine Yahoo! announced its intention to buy Broadcast.com (a company with losses of $16.4 million last year) because it wanted to expand into the online audio and video business.

Why would the operators of the Internet's most-visited Web site acquire a money-losing Web site for $6.1 billion? Convergence is the answer. Despite the fact that much of the Internet's audio and video potential is hampered by technology—slow modems and lack of bandwidth, Yahoo!, as well as many others in the digital world, realize that once these hurdles are surmounted with greater diffusion of high-speed modems and fiber optic cable, the Internet will expand even more than it already has. As one industry analyst explained, "Yahoo recognizes that the Net today is a prototype of what it will become in the future. (Once modem and bandwidth limits are overcome) the Net will become the dominant form of electronic media, and full multimedia will become an integral part of the Net."

Examples of digital- or Internet-based convergence abound. Web radio, HDTV, and cable-delivered telephone and data services are only a few emerging technologies with which most of us are familiar. There are other examples, however, that are worth noting. They promise to change the face, not only of the Internet, but of all telecommunications.

Push Technology
Push Technology—software that permits the automatic delivery or downloading of Internet data to even sleeping computers—was supposed to have revolutionized the Internet in the mid-1990s. The idea was that once users "taught" their computers what they were interested in, those computers would continuously scan the Internet and automatically deliver data to users' machines. The reason it never fulfilled its promise should be obvious—modern computers are extremely smart and efficient, and the amount of downloaded data quickly overwhelms computers and even networks, despite their size and capacity.

But it is computers' intelligence and efficiency that are resurrecting push. The idea of push has always resonated well with Internet users, especially businesses. But the efficiency inherent in having computers search for pertinent information (rather than having paid employees constantly requesting and browsing for it) simply had to be better harnessed. Two of the more successful new, narrowly-focused push technologies now available are Marimba and BackWeb. Although they are examples of push, their creators prefer to see them as technology that automates delivery of the important stuff so companies can make sure that the right people see it at the right time.

Wireless Internet
Another emerging Internet technology building on the promise of efficiency is wireless Internet—the delivery of high-speed Internet data to users through the air. Foreseeing the convergence of voice and audio, text, and video data downloaded to users' cellular phones and laptop as well as desk-top computers, advocates of wireless Internet use unoccupied radio and television channels, microwave relays, satellites, and cellular phone channels to deliver the Internet. The advantage of wireless access goes beyond the existence of a fully mobile Internet; specifically, it is speed. Bandwidth limitations that currently impede access for many users to sophisticated Internet audio and video material are largely overcome with wireless (Internet data need not ride on crowded wires; they travel over the air.)

To put the speed of wireless Internet into perspective, the fastest common form of Internet connection is called T1, and it operates at 1.5 megabits per second. But wireless Internet delivers data such as Web pages at 7.5 megabits per second, 250 times faster than the fastest telephone modem.

Embedded Systems
The NCR Corporation has introduced a combination microwave oven/TV/computer with Internet access. This is an example of an embedded system—a computer system that adds intelligence to other technologies. It is technologically simple to write into (embed) Internet protocols (common communication rules) into almost any technology. Internet protocols are already being embedded into what can be called "information appliances," such devices as wristwatches, hand-held information managers like Palm Pilot, and music synthesizers. This allows them to be attached to the Internet and, among other things, receive information or instructions from distant users. Now, as NCR's multi-functional microwave demonstrates, the Internet is being converged with an even wider array of technologies—home and office thermostats (permitting users to warm and cool spaces before they arrive), soda machines that send buyer and inventory information to a distributor, gas pumps that offer frequent flier miles—automatically credited to your account—with a fill-up. As University of Pennsylvania telecommunications professor Dave Farber argues, Internet protocols are the lingua franca of emerging technologies because the Internet "is the standard. . .You can connect anything and you know it'll work."

MP3
MP3 (for MPEG-1, Layer 3) is compression software which shrinks audio files to less than a tenth of their original size. This open source (free to down-load) software permits users to download recorded music, and it is available at sites such as http://www.MP3.com and http://www.MP3.box.sk.

So popular has MP3 become, that after "sex," it Is the most frequently searched-for term on the Web. The controversy surrounding this convergence of digital and recording technologies is captured by the New York Times' Jon Pareles. He wrote, "For utopians, MP3 is a way to liberate music from the clutches of gatekeepers and profiteers, and perhaps to return music to its intangible essence.

But the recording business sees MP3 as a Pandora's box of copyright destruction, unleashing anarchy and piracy while robbing musicians of royalties and record labels of capital. "In effect, both sides are correct. There's bound to be serious legal scuffling between people who own copyrights and people who believe in the hacker credo that information wants to be free. "Yet recorded music is considerably more than a corporate revenue source, and the implications of digital distribution go far beyond the particulars of software and gadgets and royalty collection. For listeners, music has never been about its physical form, but about what's in the grooves or magnetic particles or digital bits; it's the information, not the plastic. Digital distribution can turn that sentiment into a reality. And that shift could alter the way music is made, released, sold, stored, and valued" (November 15, 1998, p. 1, Section 2).

The problem for recording companies is that they sell music "in its physical form," while MP3 permits its distribution in a non-physical form. First conceived of as a means of allowing independent bands and musicians to post their music online where it might attract a following,

MP3 became a headache for the recording industry when music from the name artists they controlled began appearing on MP3 sites. Not only could users listen to their downloaded music from their hard drives, but they could make their own CDs from MP3 files and play those discs where ever and when ever they wished.

Matters were made even worse for the recording companies when manufacturers such as Diamond Multimedia introduced portable MP3 players, further freeing the music from users' computers. The Recording Industry Association of America (RIAA), representing all of the United States' major labels, has responded to the MP3 threat with a technological solution. At the end of 1998, the RIAA announced the formation of the Secure Music Digital Initiative—code named The Madison Project—in conjunction with IBM.

The RIAA's hope is that a new digital audio standard can be developed that will permit "legal" users to download complete albums (including lyrics and artwork) in under 10 minutes. Users can then transfer the audio to CDs or listen on their computers. Other file compression systems have been released by several companies—Microsoft's Media Technologies 4.0 and AT&T"s a2b, for example.

Many observers, however, feel that not only is the recording industry too late in entering the online music field, but that the growing number of competing, incompatible compression technologies will only serve to further cement MP3's position as the standard of choice for audio-seeking Internet users. Internet Video Yahoo!'s purchase of Broadcast.com was predicated on its conviction that video will be a major part of the Internet's future, even though slow modem speeds and insufficient bandwidth are currently limiting users' access to online video.

But there are numerous companies vying to enter the online video trade. Their efforts fall into three non-distinct categories, delivering the Internet via home television sets, delivering television channels to homes via the Internet, and delivering video to homes via the Internet.

The Internet on Television
The most aggressive advocate for accessing the Internet on home television screen's is Microsoft's WebTV. WebTV is betting that the convergence of television and the Internet will be sufficiently attractive to viewers/users that they will pay $300 for a set-top receiving box and $20 a month for the service itself.

WebTV turns a television set into a computer screen, permitting access to the Internet as is done on users' computers. As such, it provides not only access to the Web, but several sites of its own, including one for children and another serving up local weather, news, and event information.

But WebTV also offers several features that allow the Internet to enhance television viewing itself. For example, it provides a program listing feature that takes viewers from a renewable (rather than a scrolling) screen schedule directly to a show with a simple click or, using the same feature, program a VCR with a simple click of the mouse or instruct the technology to alert viewers that a favorite program is about to start, even automatically changing the channel to that show. WebTV's unique convergence of the Net and tube is in what it calls its "TV Crossover Links."

When watching a particular program, a small icon will appear on the screen and, with a click of the remote, viewers are immediately linked to an Internet site providing background or other information relating to that show. The original program remains on the screen in a picture-in-picture format. At the start of 1999, there were 250,000 subscribers to the service. Some observers feel that WebTV will not become much more popular than that because, even though innovators may converge technologies, they cannot force users to converge use and viewing habits. The computer and Internet, they argue, are task-oriented technologies which users are most comfortable using "up close and personal." But television is primarily a broad-based entertainment and information medium that viewers are most comfortable watching from several feet away.

Receiving Television Via the Internet Broadcast.com has been the pioneer in delivering over-the-air television channels to viewers' computers via the Internet. Other companies, most notably RealNetwork, have also begun this service. Their primary audience is people who want to watch television, for example local traffic news or a business news report, at work.

But because most viewers will not typically sit still in front of their computers long enough to watch a full-length television program, both these companies and scores of others have moved to the video (rather than television show) on the Internet business.

Video on the Internet
Video compression software similar to audio's MP3 makes possible the downloading of high-quality moving images from the Internet. Digital Entertainment Network (DEN), for example, produces original six-minute-long programs followed by 15 minutes of related interactive content. It sells advertising on these shows, calculating that it can earn a profit with as few as 50,000 aggregate, rather than all-at-once, viewers.

Despite critics' conviction that personal computer users will not sit still for even short "television" programs, several other producers and distributors of original online content have entered the market using the DEN model, notably Pseudo Programs, Broadcast.com, and CNN Interactive. Video over the Net's most successful application to date, however, is its power to allow users to search for and download video clips from a variety of sources. Real Broadcast Network, for example, links users to video clip providers such as CNN.com and ABCNews.com.

As a sign of its acceptance, Real Broadcast Network points to December 16, 1998, the day U.S. warplanes bombed Iraq as the House of Representatives voted on the impeachment of President Clinton. While the broadcast and cable networks were limited to presenting split-screen coverage of these momentous events, the online network delivered one million video clips on both from a variety of sources to users. This success, as well as that of its summer, 1998 Netcast of a live birth (1.4 million viewers/users) and Broadcast.com's 1999 presentation of a 15-minute Victoria's Secret fashion show (1.5 million) have convinced some analysts that the true future of converged Internet/television technology is in the presentation of special events. Real Broadcast Network's general manager Mark Hall says, "Event programming is the Number 1 thing. Doing it on the Internet provides a unique benefit that you just wouldn't get on TV." That unique benefit includes not only exclusivity, but interactivity.

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