Outsourcing Makes Streaming Media Affordable | Article

stream mediaOpportunities for competitive advantage and increased market share can come at any time, but these days usually come with technological enablements. Success, though, still depends on performance. The use of streaming media over the Internet to improve many enterprise activities falls into this scenario.

Streaming has grown dramatically in the last two years. According to AccuStream iMedia Research, 5.6 billion streams were served during the first half of 2004, 18.2 percent of which were news and information videos. Now there are more than one billion streams served per month with some form of advertising.

Rich media’s popularity continues to grow because of its ability to deliver a better message. It’s far more effective, for instance, to view an action video of a new car over the Internet–like a television commercial–than to see just a one-dimensional photograph. Streaming also reaches audiences that have turned from television, radio, and print media to go online for their information.

Performing with and without Excellence

So why aren’t all organizations using streaming media to get their messages and branding out more effectively?

“It’s cost-prohibitive for all but large businesses to do their own streaming because of the infrastructure needed in order to support the number of viewers watching a stream,” cautions Aldon Jarrett, Founder of 7th Day Media VSD LLC, a provider of video storage and delivery services based in Mount Dora, Florida.

The experience that Life-Changing Christian Center (LCCC) in Mount Dora, Florida, encountered a year ago is typical of many organizations deciding to put video on their Web sites. “We wanted to network with other locations,” states Sean Gabhard, LCCC’s Technical Director.

According to Gabhard, in 2004, only around 2,000 churches were using networking technology. In 2005, it went up to around 10,000 churches and is clearly the direction churches are going now. “A church can have a good speaker at one location and broadcast that service or class to other locations. It’s more cost-effective. You might have 10 churches getting the same message at the same time by streaming and only paying one speaker. And it keeps the churches more connected on a lot of things.”

LCCC had a T1 connection and started streaming from an in-house server. But viewers called during the broadcasts to report that they couldn’t watch the videos. Sometimes the videos played upside down or backwards, and sometimes viewers got kicked off the connection. LCCC had not been aware that a T1 connection would only allow three or four simultaneous viewers.

“We like to do things with excellence, and it wasn’t working out that way,” recalls Gabhard. “So we had to go back to the drawing board and try to figure out what would actually work.”

They switched to a Web host company and an offsite server. This solution worked for only two to three months; as it turned out the host’s infrastructure could only serve a maximum of 80-100 simultaneous viewers before running out of bandwidth. The LCCC audience quickly grew beyond that capacity.

“Bandwidth is very pricey,” Gabhard states. Through researching alternatives, they found 7th Day Media VSD. “They have a pipeline that can support thousands of simultaneous users at one time, as their servers are connected to an E-3 network backbone. Since we turned our streaming over to this company, we’ve had no problems. And we’re now paying less for 2,000 simultaneous viewers than what we paid the other company for just 100.” In addition, all the videos are archived for viewing at users’ convenience.

What about a Co-located Solution?

Though growing by leaps and bounds, streaming media is still an emerging market. “Everybody is interested in it, and Webmasters are trying to figure out how to add videos to their sites, but the cost is a huge factor,” states Jarrett of 7th Day Media VSD.

Caching servers–for origination and for distribution–along with enough bandwidth to handle the traffic volume and someone with the technical ability to maintain the process are all necessary for quality streaming. “If you wanted to, you could buy your own account with a network vendor with the capacity for the audience you need, spending usually around $2,000 to set it up and $1,500 per month,” explains Jarrett. “But that’s a big chunk for even a medium-size company, as far as advertising is concerned–and that’s essentially what video streaming is.”

Because the cost factor is driving organizations to look to third parties for help, more suppliers are popping up in the marketplace. In this burgeoning competitive arena, some companies are selling services around a media server co-located at a facility, offered at rock-bottom prices. The problems begin when a customer’s audience grows too large or when more customers join the facility and there is too much content on the server, reducing everyone’s delivery quality. These problems are non-existent with 7th Day Media VSD’s outsourced solution.

A Level Playing Field for Any Size Business

In today’s e-commerce world, streaming media on a Web site can level the playing field for small businesses, allowing them to compete with larger businesses. By outsourcing to 7th Day Media VSD, companies can reduce their streaming costs by two-thirds because of outsourcing’s benefits of economies of scale. It’s also more cost-effective than direct mail campaigns. 7th Day Media VSD can deliver five minutes of video for less than the cost of one postage stamp.

Asked for his advice for companies considering streaming, Gabhard at LCCC warns: “First, look at the options and look at the kind of equipment to encode videos. About 90 percent of people now have Windows Media Player (even Mac users). Second, if you choose to use a third-party supplier, determine if they really can supply the needs for the audience you anticipate. In many cases, these companies will be just giving you a straw to suck in a watermelon. They are trying to cut costs and just get by…they’re not selling a real service.”

Lessons from Outsourcing Journal:

  • Rich media’s popularity continues to grow because of its ability to deliver a better message, but this is only possible with the necessary infrastructure to ensure quality performance for a huge audience of simultaneous users.
  • Because of outsourcing’s benefits of economies of scale, the infrastructure needed to support the number of viewers who are watching a stream is now affordable to even small and medium-sized businesses.
  • Though growing by leaps and bounds, streaming media is still an emerging market; outsourcing is always an effective way to reduce risks in such scenarios.


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