AOL Time Warner declined to comment on the technology, code-named Ultravox. But one source familiar with the technology said it aims to create supercharged network routers capable of moving large media files far more efficiently than is possible with current Internet technology.
"Ultravox is a combo of (file) formats and switching hardware that supports them," this source said. "It allows for 10,000 users to be supported out of a cheap switch, versus 1,000 users on an expensive Sun (Microsystems) box or 100 users on a (Microsoft Windows) NT box."
Ultravox is just one strand in a widespread effort to bring badly needed improvements to Internet video and audio. Despite years of tinkering, streaming costs remain too high for many would-be providers while quality is still too low to create a mass audience for commerical, Internet-powered entertainment services conceived by media giants such as AOL Time Warner.
For now, AOL Time Warner has relied on technology from RealNetworks to push such offerings within its proprietary America Online service. But the Ultravox project suggests the company may be positioning itself to become more self-sufficient on the multimedia front.
A RealNetworks representative declined to comment on Ultravox, which was first reported in Fortune magazine.
The concept and development of Ultravox was originated by a pool of engineers who develop media and streaming technologies for AOL. This pool includes members from Nullsoft, which created the popular Winamp media player and was acquired by AOL in 1999.
Though integrated into AOL operationally, the Nullsoft team has been on the cutting edge of the online giant's software development efforts. The Nullsoft alumni have been preaching a new media software dubbed "Wasabi," which can run on various operating systems including Windows and Linux. The latest version of Winamp, which is still in beta, is built on Wasabi.
Ultravox aims to tackle problems of scale that have burdened streaming media with high delivery costs and uncertain quality, according to one source familiar with the technology.
AOL is not alone on this front. Companies such as SockEye Networks, InterNap and Edgestream offer intelligent routing services that attempt to alleviate data congestion problems that can frequently degrade the quality of live streaming broadcasts over the Net.
Both Microsoft and RealNetworks have also recently announced improvements in their technology aimed at addressing such shortcomings, which may lead to delays known as "buffering." RealNetworks in March launched its TrueStream product, claiming less latency in its video and audio delivery. In December, Microsoft announced its own solution, dubbed Corona, which it says will arrive in the market by the year's end.
By contrast, Ultravox apparently has a deeper relationship with the plumbing of the Net.
Ultravox involves "moving streaming software onto the (router) switch...like a Cisco or Extreme Networks device," according to a source familiar with the technology. It "fundamentally changes the layout of the infrastructure required to do radio or video over the Net," the source said.
While still in its early stages, the project raises new questions about AOL Time Warner's longtime partnership with RealNetworks. The companies have collaborated closely for years as allies against the encroachments of Microsoft, and both companies say their relationship remains strong.
Still, the long-term future of the partnership is unclear as RealNetworks relies increasingly on content subscriptions to prop up flagging technology sales--a strategy that pits it against the core of AOL's online business.
It's unclear whether Ultravox could be developed into products that might replace RealNetworks technology. But RealNetworks, which has been hit with a number of setbacks in recent weeks, could little afford to lose AOL as a partner.
The company on Wednesday warned that it would miss its earnings for the second quarter because of disappointing results from its software licensing business. That announcement came after a report earlier this month from Web researcher Nielsen/NetRatings that vaulted Microsoft for the first time to the number one spot in streaming media market share at work.
RealNetworks' subscription service, by contrast, has been a bright spot, having signed up some 700,000 subscribers since its launch in late 2000. Originally called Goldpass and later renamed RealOne Superpass, the service offers a wide range of audio and video content featuring exclusive programming such as Major League Baseball Webcasts.
News.com's Stefanie Olsen and Evan Hansen contributed to this report.