Teaming for Voice and Video

Streaming-media companies want you.

Web integrators and application service providers have another vendor constituency beating a path to their doors: streaming-media companies. Indeed, Akamai Technologies, Digital Island, iBeam Broadcasting and Intel Corp. are among the players in streaming media that have established partner programs.

These companies provide the back-end infrastructure for delivering streaming audio and video content, which includes everything from concerts to corporate briefings.

The delivery specialists hope that integrators, technology consultants and other allies will bring them business. And, even during this slowing economy, streaming media appears to be a hot technology play. Industry executives expect as many as 75 percent of all Web sites will feature streaming media by the end of 2001. That level of interest will propel the streaming-media services market to $2.5 billion in 2004, according to Steve Islava, a bullish senior analyst with Jupiter Research.

Skeptical? Consider the uses for financial markets. Due to tighter federal regulations, publicly held companies must maintain an even playing field for top money managers and individual investors. When a company has financial news to disclose, it must be made widely available to all interested parties. As a result, hundreds of companies now use streaming-media systems to announce quarterly results, management changes or strategic news over the Web.

Dont Go It Alone Partnering could help tap that potential. Today, many customers are interested in streaming media, but some are a bit put off by the number of components necessary to make the technology actually work.

"Were not doing a good job of marketing what we are trying to deliver," says Steven Chester, CEO of Digital Planet, referring to the streaming-media space in general. Digital Planet is an iXL spin-off that consults on branding, develops marketing strategies and produces Web events for customers.

Chester contends that companies in streaming media tend to provide "a little piece" of the puzzle, a situation that frustrates customers and slows purchasing activity. "There needs to be a very clear message of how do you integrate this stuff," he adds.

Complicated System The stuff of streaming media includes the content-delivery backbone, digital media production facilities, encoding specialists who convert video into digital formats, Web development shops and marketing strategy firms. With a list that long, its no wonder why some customers dont know how to get started.

One way to make this all work together is by acquisition—to roll up all the parts of a streaming-media solution. Another way is by partnering.

Teaming Media Thats the tack a number of streaming-media players are taking. IBeam, for example, runs a Channel Partner Program that lets integrators resell its streaming-media hosting, delivery and applications services.

Vaughn Rachal, VP of enterprise sales and channels at iBeam, says he expects partners to generate a healthy 20 percent of the companys business in 2001. But thats just the beginning. In 2003, he projects that the majority of iBeams revenue will come through partners. Rachal says partners provide "more sales capacity and more production capacity," as well as access to customer relationships. Most importantly, partners provide customer relationships that would otherwise take iBeam years to develop on its own.

At Akamai, 15 percent of the companys $27.2 million in third-quarter revenue came through indirect channels. At first glance, thats not an overwhelming figure. But take a look, and youll find healthy growth from Q2, when partners generated only 11 percent of Akamais revenue. The content-delivery service providers allies include and Totality Corp. (formerly MimEcom).

Partners give the delivery networks additional production capability, vertical-market specialization and marketing reach. Whats in it for the allies? Cost-effective access to content delivery is one benefit that vendors are promoting.

MacGregor Agan, director of marketing for Intels seven-month-old Internet Media Services unit, calls his companys delivery network "an excellent platform for working business relationships with solution providers."

Agans job is to convince allies and customers that they are better off outsourcing delivery to Intel than developing their own infrastructure for streaming media distribution. Intel, he says, has invested $200 million in building its capability.

Partners buying into Intels message thus far include Digital Planet, Excalibur Technologies Corp., Loudeye Technologies Inc.,, Media 100 and PlaceWare. Agan says Web developers have found it burdensome to buy, configure and manage their own streaming-media servers. Companies that hand off their hosting and distribution needs "can concentrate on what they do best," he contends.

Two Alliance Options In streaming media, partner programs, for the most part, fall into two categories: referral and reseller. With referral programs, vendors reward partners that steer customers in their direction for content-delivery services. The rewards may include a mix of financial, marketing and technical perks. Digital Islands strategic referral program, for example, offers product discounts, market development funds and engineering support. Participants in this program include, iXL, Lante, Viant and Xpedior.

Some programs let partners embed a vendors content-delivery service within their own offerings. Intels Solution Provider Program fits the pattern of vendors who let content creators take advantage of their streaming-media distribution infrastructure.

"What we provide is a service platform, and we give them a price list and they repackage our services inside of theirs," says Intels Agan. He adds that Intels partnering program will focus on "best of breed" providers, noting that Intel will be looking at application capabilities and geographic coverage, among other factors, in evaluating potential partners.

Do Your Homework Potential partners, however, should watch their step. Industry executives say some of the content-delivery networks are edging into production, which could change the alliance landscape. Hedging ones bets with multiple delivery networks might be the way to go., a streaming-media integrator, recently joined Intels solutions provider program, but has its own distribution capabilities "as well as relationships with a number of other back-end companies," according to a company spokeswoman.

But, on the other hand, companies that partner with many networks run the risk of spreading themselves too thin. Digital Planets Chester says the number of delivery specialists seeking allies is such that partners cant service them all equally well.

Either way, profits can be elusive. Digital Island, for one, enjoys strong revenue growth, but quarterly financial losses are mounting and the companys stock has fallen more than 95 percent from its 52-week high. Moreover, some partners appear to be dropping the ball. Sources say MarchFirst, for one, is too distracted with its own financial problems to pitch Digital Islands wares.

A laser-like focus and moderation in streaming media would seem to be the best course.