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Streaming video attempts new heights

by sue marek
May/June 2001

Like a tightrope walker trying to maintain her balance on a thin wire, mobile video is walking a fine line between being an overhyped tech toy and a compelling application.

Wireless heavy-hitters are flocking to the technology, forming partnerships and instigating trials. But while high-wire acts without nets generate a chorus of "oohs" and "ahs" they can as quickly disappoint by hitting the ground - hard.

At the vortex of the mobile video frenzy is PacketVideo Corp., a San Diego startup with a standards-based MPEG4 video compression technology, the PVPlatform, which delivers video over wireless at data rates of 14.4 kilobits per second and higher.

Although PacketVideo isn’t the only player in this field, it has received quite a bit of attention from some high-profile technology companies. Early investors include Qualcomm, Siemens, Sony Corp., AOL Time Warner, Texas Instruments Inc. and Intel Corp. In addition, after withdrawing its planned initial public offering last year because of poor market conditions, the company in March managed to finagle $100 million more in funding from prominent venture capital firms such as GE Equity, BFD First Global Partners and Softbank Technology Group, as well as vendor contributions from Kyocera, Motorola, Sun Microsystems and others.

In this tough financial climate, PacketVideo’s financing fete is considerable. "We’ve done an excellent job of developing the technology," says Jim Brailean, PacketVideo’s cofounder, president and chief technology officer. "And people are giving us that recognition."

PacketVideo plans to make money by licensing its software to device manufacturers and its server technology to carriers. In addition, the company recently received a patent for software that maximizes battery life. "Wireless is such a tough environment because of the limitations of the device," Brailean says. "You can’t have an application that quickly drains battery power."

In February, PacketVideo released its second-generation platform, the PVPlatform 2.0, which makes multimedia viable over 2.5G networks. This is a critical advantage for the company, according to Brailean, because it means carriers won’t have to wait until they deploy their 3G networks to offer video.

The company is conducting several technology tests using different network standards and speeds. In Finland, PacketVideo initiated its first paid user trial with Sonera Mspace in which consumers can access various types of content including movie clips, news, and travel and sports information. According to Brailean, the trial was only available to a limited number of users, but attracted so much interest that Sonera had to turn customers away.

But is the overwhelming consumer response to Sonera’s trial indicative of the rest of the world? Analysts are torn on this issue. According to a Qualcomm, Lucent and Microsoft-commissioned study from International Data Corp., next to accessing e-mail with attachments, consumers want mobile multimedia services. In addition, IDC found that 31 percent of those surveyed said that they had more than 30 minutes of time per day to take advantage of these services.

Some analysts, however, question the viability of video over wireless, especially when streaming video over landline technology has yet to take off. David Rader, a senior analyst at Jupiter Media Metrix who authored a report on streaming video technology, found that enterprises are more likely to use streaming video than consumers, and initially look at wireline applications. "Wireless could connect enterprises for the type of applications that employers want, but not many companies are considering wireless to be part of the solution right now," he says.

But Rader’s findings aren’t surprising to PacketVideo’s Brailean, who expects the enterprise market to be an early adopter of mobile video, similar to the way businesses recognized the value of wireless long before consumers. "When this first rolls out, the device will be more expensive and focused on the enterprise and the enterprise user."

So the balancing act continues as carriers search for applications with broad appeal to justify their costly infrastructure investments.