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Disputes, entertainment spark jump in streaming media

The presidential election controversy, music videos and the reality TV show "Survivor" helped boost streaming media on the Internet 215 percent last year, according to a report.

    The presidential election controversy, music videos and the reality TV show "Survivor" helped boost streaming media on the Internet 215 percent last year, according to an industry report.

    The 275-page report, conducted by DB&P/Webcast Track, a research company that focuses on digital entertainment, also included an analysis of high-speed connections necessary to pipe large video and audio files through the Internet. Other information in the report touched on a discussion of cable TV channels, broadcast networks and affiliates with online extensions.

    "Big events spurred a lot of the streaming by big news brands that had an audience flow from on air to online," said Paul Palumbo, lead author of the report, which showed growth in 2000 at more than 900 million streams.

    Most of the streaming content was produced by major news organizations with online components, such as CNN and MSNBC, particularly during the postelection disputes. Video clips of important events such as court decisions surrounding the recount effort in Florida and candidate speeches drew unprecedented, high viewer traffic.

    In addition, the World Wide Wrestling Federation and Launch.com, a music video Web site, each accounted for about 7 million streams of video a month.

    But news that more TV-like material crisscrossed the Web last year was tempered by gloomy reports of streaming media companies struggling to turn profits with the increased traffic.

    A few companies, such as Digital Entertainment Network, Pop.com and Psuedo.com, were forced to close shop. Others turned to layoffs as cost-cutting measures. Just Tuesday, Seattle-based Loudeye trimmed its staff by about 18 percent, or 50 people, which will result in an annual savings of roughly $3 million a year.

    Streaming itself faces steep hurdles, as most consumers don't have the high-speed Internet connections necessary to access high-quality video and audio files.

    "The notion of the PC used for entertainment--aside from games--is a long way off," said Larry Gerbrandt, senior analyst at Paul Kagan Associates in Carmel, Calif. "For one, most video will be watched while at work, which you're not supposed to do. And, if at home, a person would rather watch the television."

    Still, the area is growing. Cyber Dialogue, a customer relations company based in New York, predicts there will be about 67 million streaming media users by 2004.

    Palumbo noted that most of the streaming media companies that failed last year either didn't use a lot of streaming--Psuedo published about 300,000 Internet video clips a month--or, as in the case of Pop.com, didn't stream at all.

    "There are a lot of successes out there," he said. "But does that mean that (companies that are doing a lot of streaming) are making a pile of money? No. Like any other entertainment enterprise, it takes years to make it a profitable business."