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Connections of Another Kind
by Jon Leland
Originally published in Videography Magazine, March 2000

We live in a wired world, a new media world that's being created by new kinds of connections. But these connections are not only between computers. More importantly, the Internet explosion — and especially the emergence of the video Web — is being created by new kinds of connections between people, between organizations and between a wide variety of different hardware and software technologies.

An Internet axiom called Metcalfe's Law explains that "The power of the network expands exponentially with the number of people on the network." This "power" is the people not the streaming video bits. In other words, there's much more going on with the explosion of the Internet, with and the video web in particular, than you can "get" if you only look at the technologies. Or, as I sometimes say, "It's the communication, stupid."

The truth is that those of us who are working on building the video Web are defining a new medium. A new medium that is being built on morphing building blocks because both the software and hardware components are reconfiguring themselves regularly right along with the capabilities of creative people like us who are making it all happen. (Personally, I've seen my company morph from being a video production company into a web development company.)

But, even beyond my business interest, these changes are fascinating to watch because of the ways that the various components — from network infrastructure companies and broadcasters to streaming server, operating system and hardware companies — all seem to continually find new ways to connect. These new kinds of connections include company mergers and strategic relationships as well as innovations. Some of the above are covered in this month's Video Web column.

SUPER GROWTH
All of these changes are happening within a business environment of unprecedented growth. To update you on the pace of this revolution, according to the UK-based research firm, Netcraft, in April 1997, there were roughly 1 million distinct web sites. As of February, 2000 (in less than three years!) that total has grown more than ten-fold to about 11 million web sites. And the Internet is really still just a baby.

Despite this rate of growth, most enterprises are still trying to figure out how to make the web make sense from a financial point-of-view. This is especially true for companies who are dreaming of streaming video "channels." Thus, the technological innovations must be supported by new kinds of more human and organizational connections that can help build increased viability. As a result, I'm sure that we will continue to see more companies connecting with other companies, new technology interfaces to create bridges between compatible systems, and so forth.

NEXT GENERATION RELATIONSHIPS
Beyond the headline-grabbing Time-Warner/AOL merger, a slew of other new strategic relationships (as well as mergers and acquisitions) are also further redefining the video Web landscape.

For example, many dot-com companies are reinforcing the importance of the marketing reach of traditional broadcast media. This was confirmed by Michael Tchong's Iconocast e-mail newsletter which reported that only two years ago, in the 1998 Super Bowl, there were only 2 Internet advertisers. This year, on the Millennium Super Bowl, almost half of the broadcast advertisers, 17 out of 38, were dot-com companies.

In the corporate arena, teleconferencing leader, Polycom has extended the capabilities of its StreamStation product by integrating it, through a strategic relationship, with SightPath, a company that makes distributed server networks for video on corporate Intranets. The result is a better offering from both companies.

On the home video front, Blockbuster, who calls itself "the global leader in rentable home entertainment," and AtomFilms, a pioneer and certainly one of the leading short-form video web sites have created a new kind of connection. According to their plan, selected, short-form, digital content from AtomFilms will be video streamed on a co-branded section of the Blockbuster.com web site. Essentially, AtomFilms is exchanging some of its online expertise for increased exposure, while Blockbuster is enhancing its online services.

A NEW BREED OF SERVER SERVICES
Amongst the major streaming video software platform vendors, two out of three are also operating system (OS) developers. Microsoft, of course, is the world's dominant operating system company; and Apple develops both its own OS and QuickTime. RealNetworks, the current leader in streaming media software, is passionately OS agnostic (i.e. they intend to support all major operating systems). However, they are currently creating new connections to the rapidly growing Linux OS via a new strategic relationship with corporate Linux leader, Red Hat, Inc.

RealNetworksWhat makes this connection particularly interesting is that it connects RealNetworks and its leadership position with what Red Hat describes as "one of the (world's) largest online communities of open source software users and developers." After all, Red Hat is the world's leading supplier of the Linux OS, and research firm IDC confirms that Linux is the world's fastest growing server software.

Linux has achieved this success because of its freeware distribution model which is supported by a very active community of online software developers. In fact, much of the Internet runs on free, open source software. Many video pros may not know that, according to Netcraft, 55% of all of the world's Web servers run the open source, Apache web server software, and 80% of Internet Service Providers (ISP's) use the open source, Sendmail messaging software.

I spoke with RealNetworks general manager for systems and tools, Ben Rotholtz, about this new relationship. Rotholtz explained that RealNetworks and Red Hat have similar business models, i.e. free, almost ubiquitous distribution, and an "up-sell" revenue model (upgrades from the "basic" version cost "real" dollars).

Rotholtz described the obvious target market for the new RealNetworks/Red Hat bundles to be organizations and webcasters who need installations that are capable of "heavy lifting," i.e. large capacity server systems. For openers, Real servers will now be bundled on the "several hundred thousand" CD-ROM disks that Red Hat distributes. Red Hat Linux is also now being offered on the RealNetworks web site, the first OS to be distributed directly by Real.

Despite Rotholtz's hyperbole of describing RealNetworks as "breath-takingly innovative," I had to agree with him that Real's relationship with Red Hat was "another first to market" accomplishment for RealNetworks. Given Linux's current momentum in the server market, I see this relationship as a positive move in support of the community-powered open source movement. Potentially, that's something that can benefit us all.

Rotholtz's insists that Real remains dedicated to supporting NT and Windows 2000 (which I'm sure is true), but I'm also sure that he, CEO Rob Glaser and the rest of the Real crew are happy to be moving aggressively in a "Microsoft-independent" direction..

SHARING INNOVATION
The bottom line on the power of the open source movement is the strength that comes in numbers when those "numbers" are people whose human connection is based on a relationship of mutual support and the open sharing of information. This is an approach which has worked successfully on the Web on a scale I can't remember seeing anywhere else.

Actually, it is this kind of exchange that got the microcomputer movement moving in the first place, back in the '70's, here in the San Francisco Bay Area. One guy who is sometimes described as a "grandfather" of personal computing and the Internet, the founder of the historic West Coast Computer Faire where Apple debuted, is Jim Warren. As he explained it in a recent New York Times profile, "Much of the hippie and antiwar and utopian movements in the Bay Area, I think, were key contributors to why micro-computing took off in the Bay Area. Why? Because we were willing to share, rather than lock it (information) up under patent."

CUSTOMER POWER
But you don't have to be a utopian or even altruistic to be motivated enough to pay attention to this kind of openness and receptivity. Some experts think that successful e-businesses will come to depend on this kind of human connectivity.

One of the most thought-provoking books I've explored recently on the subject of e-business is Futurize Your Enterprise, Business Strategy in the Age of the E-Customer, by David Siegel who also wrote Creating Killer Web Sites. Taking giant steps beyond "listening to your customers" and even "customer-driven web sites," Siegel envisions "customer-led web sites." By turning businesses into a kind of virtual community, Siegel says that firms can capture entire business sectors.

To put this on simpler terms, I believe that we all need to put people's needs ahead of profits and technologies in order to achieve meaningful success. I've always said that business is based on relationships, and there is no question that the Web is enabling whole new kinds of connections. In fact, as the Internet and the video Web in particular struggle for financial viability with profit-less dot-com companies who need to "ligitimize" their technologies, it is the people-powered web sites that are based on real communities (like the open source movement) that are succeeding. Examples also include Ebay auctions and even Amazon.com's customer reviews. And those sites who bring people together will continue succeed in more ways than just financially.

To me, at least, it's the open source communities and the customer-led web sites who are the "good guys" that I'm rooting for in this rapidly evolving high-tech drama. Those are the companies who are making the connections that count.

Stay tuned.


Jon welcomes feedback and suggestions via e-mail at jon@combridges.com
     
   
 
 
 
   
 
 

 

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