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Streaming media firms look for payday

Streaming media companies are set to face off at a major industry conference in New York City, fueling old rivalries and unveiling new products and services.

Streaming media companies will face off today at a major industry conference in New York City, fueling old rivalries and unveiling new products and services aimed at increasing demand for online audio and video content.

As earlier reported, keynote speakers scheduled to appear at the Streaming Media East conference include RealNetworks chief executive Rob Glaser, Yahoo chief executive Tim Koogle, journalist Sam Donaldson and Michael Robertson, chief executive of MP3.com.

Enthusiasm for streaming is surging as companies such as RealNetworks and Microsoft release new products that are vastly improving the quality of digital audio and video.

No doubt lured by analyst predictions that the market will grow to $2.5 billion by 2004, Intel this month announced plans to launch a streaming services division, for example.

But on the media side, the industry is showing growing impatience for tools to turn content into cash.

"Streaming and Webcasting are not revenue-producing yet," said Tom Kozick, chief strategist at Virgin Jamcast, a music Webcaster.

New product launches and partnerships at this week's conference aim to change that.

Microsoft, for one, said it plans to unveil new partnerships with iBeam and Engage to provide rich-media targeted ads on demand for digital content in its Windows Media format.

Rival RealNetworks has offered a streaming advertising extension for its core products for more than a year. The company declined to comment on upcoming announcements.

Microsoft also said it is releasing a product called Digital Broadcast Manager (DBM), which it says will make it easier to create digital e-commerce "storefronts."

Dave Fester, general manager of marketing for Microsoft's Digital Media Division, said DBM will give digital content sites the ability to provide pay-per-view, pay-per-download and live Webcasts. He said the company will announce several key customers today, including digital music innovator the House of Blues and Nascar.

Swimming with sharks Also today, digital encoding start-up LoudEye plans to unveil a streaming syndication offering, giving digital content providers a way to securely distribute products such as music and news video clips to a wide number of customers.

While major content producers are gravitating toward new business models to capitalize on digital distribution, such as subscription services, many executives at streaming and Webcasting firms said a key piece of the puzzle is still missing.

"It is very difficult to generate revenues," said Bryan Payne, chief executive of Internet radio start-up Spatial Audio Systems. "It's tough to find a lot of companies willing to pay for ad inserts."

That perception was echoed by Richard Frankel, a product manager for Internet advertising giant DoubleClick. Frankel said the technical tools to offer ad streaming have been around for some time, but advertisers have generally been reluctant to pay for a largely unproven medium.

"It's been a small part of our business, but it's growing," he said. "We've had some extremely well-educated clients doing this in the past, such as CNN. But now it's poised to become more mainstream."

Frankel pointed to two main stumbling blocks: the poor quality of streaming on predominant 28.8-kbps dial-up modem connections and a lack of support from advertisers.

He said both of those barriers are dropping, however.

"We are at a transition point," he said. "Advertising agencies are beginning to allocate dollars for streaming. This year, they're so far fairly small allocations. But things will really start to take off in 2001."