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| Web broadcasting's troubled reception |
July 1, 2001 |
By Abbe Edelson
Streaming media, the technology that transmits live video and audio over the Internet, was supposed to democratize communications: ordinary people would become independent broadcasters and tell their stories to the world. Well, that hasn't happened so far. Although numerous Web sites showcase the work of independent animators, multimedia artists and indie filmmakers, few streaming media enterprises or Internet broadcasting companies are showing original content or, for that matter, turning a profit.
The past year saw several Internet broadcasters launch in Canada, including CTVnews.com, ROBTV, U8TV.com, BlackholeTV.com, TVradio.com and WorkdayTV.com. The first three, backed by the deep pockets of traditional broadcasters seeking to extend their brands online, are thriving. But WorkdayTV.com is history, BlackholeTV.com says it is getting ready for a re-launch and TVradio.com was no longer broadcasting at press time and its parent company is shifting its core business towards the Customer Relationship Management space.
They were ambitious efforts to launch innovative streaming media companies with aggressive business plans. So what went wrong with these pioneers?
Workday was living in a fantasy world
WorkdayTV.com was one of the first wireless television stations to broadcast live over the Internet. Launched in April 2000, it was housed in a van that roamed the streets of downtown Toronto. The little mobile Internet TV station hoped to capture a daytime business audience tuning into financial market news on their desktops and to compete with established brands such as Bloomberg.
Founded by financial-planning guru Garth Turner, WorkdayTV had a number of partners, including William Stratas, head of its technical operations. In retrospect, Stratas says, "Workday was living in a fantasy world of unlimited opportunity, unlimited scope and unlimited confidence." After a few months, however, the novelty of the wireless truck waned. Staff complained of the summer heat, and eventually the entire operation was relocated to a Bay Street studio.
WorkdayTV sold airtime on the Web just as traditional broadcasters sell airtime on television. The roster of sponsors was impressive, and included TD Waterhouse, Bank of Montreal, Altamira Mutual Funds and Yorkton Securities. As a busi- ness model for Internet advertising, WorkdayTV was considered cutting edge because it sold blocks of time over the Web. "We were courageous enough to avoid the tyranny of the click and the banner ad," says Stratas.
Yet WorkdayTV's simultaneous audience capacity was only 5,000, a limitation inherent in streaming media. (When too many users access a program at the same time, the result is interruptions in transmission due to Net congestion.) Bill Sweetman, vice-president of Interactivity for Delvinia Ltd., a new media consultancy, questions the viability of the WorkdayTV plan. "The business models don't work based on the volume of eyeballs and convincing advertisers they are worth paying for. They couldn't have had enough eyeballs," he says. While Turner, WorkdayTV's president and CEO, maintains that the Internet station was profitable, he admits: "We were relying 100 per cent on people who make their money in the stockmarket. We're not part of the dot-com carnage, but maybe part of the Nasdaq carnage."
Although Workday's programming could be viewed via ordinary dial-up modem, streaming technology works best with high-speed Internet access. "We were about two years ahead of the curve," says Turner. "We're waiting for the penetration of high-speed Internet access to catch up, so the audience will be big enough to compete with traditional media." Turner says WorkdayTV may be back within the next couple of years when market conditions improve.
Obstacles ahead
Stratas believes that Internet broadcasting won't take off until the streaming industry matures and develops a unified media player. "There is a whole battle between Microsoft and RealNetworks and Apple," he says. "That's the dirty little secret of streaming media." Users click away from various Web sites where their players aren't compatible. "And they never come back." He's optimistic, however, that within two years, Internet broadcasting will take off again, once these compatibility problems are ironed out.
Brahm Eiley, president of Convergence Consulting Group Ltd., agrees that WorkdayTV may have been a little premature. By the end of 2000, he says, only 25 per cent of households online had high-speed Internet access. By the end of 2003, he predicts that half of all households online in Canada will have high-speed access. But will that really prove decisive?
Delvinia's Sweetman, for one, doesn't think so. There's no evidence, he says, that higher penetration of high-speed access will make folks use their computers for passive viewing. "The most popular use of high-speed Internet access is still e-mail, file-swapping and file-downloading."
Strategy shift
Virtual Broadcast Corp. (VBC) is still up and running, but its affiliate TVradio.com was not online at press time. In July 1999, TVradio.com had three specialty networks and 12 hours of original programming. Only six months later, the company had developed 50 hours of original product specifically for the Internet, with 22 specialty networks (covering subjects such as astrology, business, comedy and technology) aggregated on its master portal Web site, TVradio.com. The business model was based on selling banner ads that matched the content the audience was viewing and providing e-commerce opportunities that related to the programs.
Former CEO Chris Meraw says TVradio.com developed a unique interfacethat uses embedded frame technology. "It allowed people to avoid pop-up windows so they can watch a video, chat and send an e-mail on the same page simultaneously." Meraw says TVradio.com attracted viewers from 30 to 40 different countries every day-and high-speed Internet users spent an average of 22 minutes on the site.
But in June 2000, as dot-coms became dot-comatose, TVradio.com was also in trouble. "We found it hard to continue to raise capital to fund our burn rate, even though we never projected that we would be cash-flow positive by the fifth month," recalls Meraw.
In 2000 TVradio.com's staff was reduced to 14 from 25 and its production department of three was reduced to one full-time producer. While VBC had maintained the specialty network presence on the Web, little original content was added since June.
"When content becomes king again, and the market for advertising comes back, TVradio.com will be spun out as a stand-alone business for specialty television," Meraw predicted before his departure. He expected the market to pick up in 12 to 18 months.
Last summer, VBC rewrote its business plan, shifting its focus away from original programming. Its new mission was to assist corporations to convert Web sites to Web stations that stream live content, and by early 2001 the company had increased its staff to 17 and was promising to convert a corporate Web site to a streaming video and audio Web station in four to six weeks.
By June 2001 VBC further defined its new direction, with the site proclaiming that the company will create and deliver browser-based software solutions that employ streaming Customer Relationship Management functionality.
Innovative enterprises such as WorkdayTV.com and TVradio.com have pushed the envelope on the use of new technology. And if Turner is proved correct about the implications of high-speed Internet, both WorkdayTV and TVradio.com, as well as many other independent Internet broadcasters, may start to thrive by 2003. Until then, do not adjust your sets.
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