Webcasting could upset media apple cart

If Internet penetration rates among Canadian households continue at their current pace, a host of new entrants to the Webcasting or "streaming media" industry could give traditional media outlets a run for their money, says a recent report....

If Internet penetration rates among Canadian households continue at their current pace, a host of new entrants to the Webcasting or "streaming media" industry could give traditional media outlets a run for their money, says a recent report.

"The Webcasters: Streaming Media’s Impact on the Canadian Media, Entertainment and Telecommunications Industries" predicts that by the end of 2002, 38% of Canadian households will access the Internet with either cable or other high-speed connections – creating a sizeable audience for full-motion, full-screen video delivered to the PC.

"Anybody can have their own Web site and anybody can ultimately Webcast," says Brahm Eiley, president of The Convergence Consulting Group, the Toronto-based Internet and high-tech consultancy that prepared the report. "If someone wanted to go up and challenge Citytv and put music videos on the Web, they could. There will be true challengers to the bricks-and-mortar traditional companies."

The hope of the newcomers, according to the study, is to siphon off advertising and e-commerce revenues from previously untouchable categories, including the entertainment industry, which generated $10 billion in revenues in 1999.

There is already evidence, says Eiley, of the impact of streaming video – a method of compressing audio and video data and transmitting it over the Net – on the media and entertainment industries. He points to the AOL Time Warner merger, the $9.2 billion purchase of TVGuide by electronic programming guide provider Gemstar, and Yahoo!’s $5.7-billion acquisition of Broadcast.com.

In Canada, Eiley expects to see a raft of similar mergers and acquisitions. In fact, he says, several strategic partnerships have already been established, most notably BCE’s takeover of CTV.

Webcasting-related revenues in Canada total about $250 million today, says Eiley. In 2002, those revenues are expected to reach $1.6 billion.

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