Streaming Media Battle Heating Up
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The browser wars may be history, but the battle over the streaming media market is just warming up.
Microsoft will strike first on March 18 by bundling the Windows Media Player into the final release of Internet Explorer version 5. And when the company ships the next service release of Windows 98 this quarter, the player will be there too.
According to product manager Gary Schare, Microsoft expects to see Windows Media player usage soar in coming months, with 50 million players in use by June, up from its current 25 million. By its own estimates, Microsoft has built Windows Media's share to 30 percent in the eight months since the final version of the player was launched last summer.
Jay Wampold, Real Networks PR manager, shrugged off Microsoft's claims of momentum and distribution advantages.
"There's this attitude that Microsoft will inevitably catch up to us, but they've been in this market for three years and have not gained any share."
Wampold said Real has more than 53 million unique, registered users, whereas Microsoft can only point to raw downloads. And he claims more people actually download Real players every day than purchase copies of Windows 98 -- 178,000 per day to be exact. And then there's the ride Real gets on the back of every new copy of America Online's access software and Netscape Navigator.
"Sure, they are a big company and we take them seriously, but I think we have made a lot of the right moves and have learned from companies that didn't make the right moves," he said.
One move by Microsoft that's still in doubt is the company's decision to make its streaming media a one-platform solution. Microsoft said the tight integration between the player, the NetShow server, and Windows NT gives Windows Media advantages in performance and scalability. The company commissioned an independent lab to test this claim, but before its PR machine could make hay last month with the results, Real struck first with lab results of its own touting the advantages of the G2 platform.
Microsoft's bundling of the NetShow server with Windows NT last year was also expected by analysts to give it a market share lift. But nine months later there's been no major lift. Analyst Jae Kim of market research firm Paul Kagan and Associates said the tactic may actually have backfired.
"Instead of trying to propagate the server itself to companies that may want to use it and take advantage of Microsoft's support, they decided to bundle it with NT. That puts companies that don't want to switch to NT in a conundrum, so they'll opt to go with Real since it supports a variety of different platforms."
Kim said his firm's study of 1,400 online radio stations found Real's technology is place at 80 percent, versus 10 percent for Microsoft and 10 percent for all the others. Kim also estimates that 95 percent of the streaming content on the Web is encoded in Real media format.
Yet Kim said you'd be foolish to count Microsoft out.
"It's not Microsoft's first entry in the market that you need to watch out for. It's the second and third attempts. That's when they step back, assess what happened, and that's when they come back to market and things change," he said.
Indeed, while Real is widely seen to be a generation ahead with its G2 system and support for SMIL, or the synchronized multimedia integration language, Windows Media could get a big boost going forward from a technology called HTML+Time.
HTML+Time is being touted as an extension to SMIL. But Tim Kennedy, editor of Internet.com's StreamingMedia World, said HTML+Time could be a SMIL killer.
"If they roll out a really compelling use of streaming multimedia within the browser environment, Real will really have to scramble to match it, and that could change the market overnight," Kennedy said.
Kennedy said Microsoft is keeping mum about its HTML+Time development plans, but support for the technology could be added to IE5 as soon as this summer.
This summer may also see the arrival of Apple's QuickTime version 4, which will for the first time support streaming. Kennedy said it could be the dark horse of the marketplace.
Since there seems little chance that Real will capture a 100 percent share of the market for streaming media, Kennedy said most developers have resigned themselves to supporting at least two flavors for the foreseeable future.
"Developers are growing tired of leaning one way or another. And the big ones that have a lot of content are just going to provide options," he said.
Don't look for any major interoperability between the two platforms anytime soon. Since they squabbled last July during the Senate Judiciary Committee hearings on digital competition, Real's and Microsoft's relations have been downright icy. Microsoft subsequently divested its stake in Real Networks. And while Microsoft licensed version 4 of Real's technology back when they were practicing co-opetition, Schare said it won't happen again.
"We did an agreement, paid them a large chunk of money, and they quickly raced off in a totally different direction. So we've had that experience and it wasn't a very pleasant one. At this point we have no interest in licensing any more code from them," Share said.
Wampold said Microsoft is of course free to draw its own technology road map for Windows Media. But he said Microsoft runs the risk of being a lone cowboy on the streaming media frontier.
An audio version of this article is available here.