STREAMING video on WALL street? – Company Business and Marketing

STREAMING video on WALL street? – Company Business and Marketing – Column

Jeff Sauer

a couple years ago at an industry trade show, I met a business acquaintance who had recently changed jobs and joined Data Direct Networks, a hard drive array integrator formally known as MegaDrive.

When I’d first heard that MegaDrive was changing its name, I was rather taken aback. I’m a marketing person myself and am fascinated by clever public strategies. This one seemed anything but. From my standpoint, the company was throwing away a well-known moniker that effectively communicated the company’s business, and was replacing it with the apparent antithesis of marketing savvy.

After filling in the spaces since our last meeting, I asked my friend about the questionable name change, feeling confident that, as an experienced industry guy, he’d understand my befuddlement.

He did, begrudging the new name himself. But, he was also able to answer the question quite convincingly. Noting the owners’ consideration toward possibly taking the company public, the name change was an obvious valuation play. At the time, Seagate and Quantum were reporting poor earnings and Micropolis had declared bankruptcy; therefore, Wall Street was taking a rather dim view of hard drive companies. Networking, on the other hand, was hot.

Last fall, following months of fortune-making Internet IPOs and technology stock euphoria, I thought I’d caught a whiff of similar Wall Street antics when two non-linear video editing powerhouses independently announced they were becoming streaming media companies. Media 100 and Avid Technologies, both non-linear editing pioneers, had lately been giving stockholders reason for concern and were in need of a Wall Street makeover.

For Media 100, who jumped first into the streaming media game, it has worked like a charm. Their stock is up more than threefold over its pre-streaming days. But more than just talking the Wall Street talk, Media 100 has put the company money where its PR mouth is, and acquiring companies and technologies that will help move it quickly in a streaming direction.

First, while it didn’t announce its streaming transformation until the fall, the process began earlier last year with its acquisition of Terran Interactive. Terran, maker of Media Cleaner Pro, is a long-time leader in compression tools for low bandwidth distribution, going back to the early days of CD-ROMs and now specializing in streaming media. Media 100 has also acquired Wired Inc., the makers of MPEG-2 encoding and decoding hardware, and Digital Origin, an editing software company focused on DV technology. Both were purchased in the span of a couple months.

What Media 100, a hardware specialist, has yet to do is introduce any new board solutions that will improve or assist streaming media creation. So far, it has outlined a strategy for using its existing hardware, bundled with Terran’s Media Cleaner Pro and other industry hardware and software products, to provide a one-stop solution for creating streaming media. Unfortunately, Media 100’s M-JPEG hardware is relatively expensive compared to the tools ultimately necessary in a digital acquisition, digital distribution world. And, its “i” bundles are currently nothing that a moderately sophisticated industry user couldn’t put together themselves. On the other hand, Media 100 is positioning itself to advance streaming media tool offerings and, alas, new hardware designs don’t happen as fast as Wall Street smells potential.

Avid, on the other hand, has done less to support its claim of streaming media savvy. Their streaming initiative flagship, the Avid Xpress DV editing system, is a product announced last April to meet the editing needs of corporate users shooting in DV. By simply adding an export option to recompress finished programs for low data-rate distribution, Avid believes it has the workings of a streaming media solution.

And you know what? It might be right. While Wall Street hasn’t re-embraced Avid yet, what streaming media content producers really need is a broadening of the medium. With Web video still in its infancy, and picture quality poorly reminiscent of the early days of desktop video a decade ago, there have been only targeted attempts to expand the technology. In something of a chicken-and-egg problem, Web sites have been hesitant to include streaming video if no one has the bandwidth to view it; and, users won’t except the extra hassle or cost to view streaming video if there’s very limited content to see.

With two major companies like Avid and Media 100 raising the visibility of streaming media, the result will hopefully be a greater commitment to streaming video from the rest of the industry and more demand for it. Neither company may ultimately drive streaming media tools. Yet, just by raising the perception that streaming media is an important content type, they will drive the industry tools and infrastructure that will make streaming media happen more quickly.

After all, content creators figuring what looks good on the Web will ultimately drive the medium. They just need a little corporate incentive to get the rest of the world and the Web to take streaming video more seriously. When that happens, both Media 100 and Avid will be visionaries and Wall Street darlings.

Data Direct Networks may have had something, too. It turns out that storage area networks need hard drive space to store all that corporate and financial data. Maybe Networking is not as hip as a “MegaDrive,” but it’s still in business while most of its one-time competition faded away a long time ago.

Jeff Sauer (, columnist for THE MOVING PICTURE, is the Director of the DTVGroup, a research and test lab that regularly reviews tools and technology. He is an industry consultant, an independent producer, and a Contributing Editor to NewMedia Magazine, Video Systems Magazine, Presentations Magazine, and AV Avenue.

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