Wednesday, April 11, 2001

Spending on Streaming Video Technology will Increase

Jupiter Media Metrix, a global leader in market intelligence, today reports that enterprise spending on streaming video technology will increase from $140 million in 2000 to $2.8 billion in 2005, and will be led initially by companies using the technology for communication with employees. According to a custom Jupiter MarketAccess report released today, 90 percent of companies that have adopted streaming video technology say they use it to make their internal communications efforts more efficient and to reach more employees on a near-simultaneous basis. Jupiter analysts found that the success of streaming video technology for internal communications—including executive addresses, sales training and intracompany meetings—will pave the way for companies to use streaming video technology for external communications, including business-to-business collaboration.

"Early adopters of streaming technology are using it for critical internal communications—especially training staff on new sales programs, products and services—because they understand the tremendous productivity gains," said David Rader, senior analyst in Jupiter's custom research and consulting group. "Company-wide streaming video distribution not only means reduced travel costs but faster and more consistent roll-outs of new programs and products. In the next phase of adoption, companies will be looking for solutions to help them extend this capability out to their partners and customers."

Jupiter's MarketAccess report entitled "Streaming Video Adoption in the Enterprise Market" presents a first-of-its-kind market forecast for streaming video technology in the enterprise sector. Key findings from the research include:

- While enterprises are currently spending the most money on streaming video applications for internal announcements ($80 million in 2001), Jupiter analysts predict that product launches and marketing applications will see the most spending by 2005 ($567 million). Streaming video usage for sales training will also experience sharp growth during that time period. Jupiter analysts believe that more complex external uses of streaming video applications will begin increasing once companies have overcome the technological hurdles, and more important, proven the return on investment for internal streaming.

- Spending level for live and on-demand streaming video is currently about the same, but Jupiter expects that expenditures for on-demand uses will reach $1.9 billion by 2005, representing 65 percent of the overall market. Jupiter analysts believe that on-demand streaming content ties into the core value propositions of streaming: repeatability, consistency of message and pervasive and dynamic access.

The rapid growth of training applications fuels the growth of on-demand streaming as a growing number of enterprises need to reach employees at various locations.

"Entertainment and consumer companies have struggled to find business models that take advantage of streaming technologies. Enterprises don't need to directly monetize their streaming initiatives because they can cost-effectively leverage their broadband infrastructure and justify the investment through better internal communications," Rader said. "Early adopters who have already been using streaming technologies to communicate internally are now considering their options for delivering secure streaming to partners and distributors."