I Stream, You Stream

3G networks will bring many next-generation services, including streaming media. Smart providers are preparing now.

It's Friday night and you're not sure what movie you want to see, so you turn on your wireless phone and watch trailers of five movies opening today.

Technologically, this scenario is a bit premature. Today's wireless networks are too slow to support anything but the most basic media, and phone screens are too small and unsophisticated to deliver full-color, full-motion video. But 3G networks will usher in streaming multimedia.

"We've been through the mobile-phone phase, and we're now into mobile data," said Robert Tercek, PacketVideo president of programming. "The next logical step is mobile multimedia."

A few providers, including AT&T Wireless and Sprint PCS, are thinking about these next-generation services today. They're partnering now to offer them and market themselves as viable vehicles for streaming media.

"We're too far away to know exactly what that would look like, but we think that the convergence of the communications device with the entertainment device is on the way to happening," said Rod Nelson, AT&T Wireless senior vice president & CTO.

Streaming Soon to a Phone Near You
3G could debut in Japan and Europe as early as next year. Nokia and AT&T Wireless, meanwhile, will jointly develop and test enhancements to the all-IP EDGE network that will enable simultaneous delivery of voice and data, as well as real-time streaming media and video-conferencing. They'll be working under the 3G Partnership Program Release 2000 International Standards to bring simultaneous transmission of voice over IP, Web browsing and e-mail by 1Q01.

AT&T Wireless and Nokia also will develop a new line of streaming-media-ready phones. AT&T Wireless will begin upgrading its network late next year to a next-generation technology that will allow Web surfing with full-color graphics and listening to MP3s. The new technology will send voice via IP, so users can surf while they talk.

"The intention is to get advanced understanding of what the end-user experience will be like," said Mike Robinson, Nokia vice president of business development.

Nokia also plans to install RealNetworks' streaming-media software in Internet-capable smart phones by 2001.

More than 35 media and online companies are participating in PacketVideo's trials of full-motion video via wireless. PacketVideo's scaleable, air-interface-independent MPEG-4 technology works with rates as low as 14.4kb/s.

Providers are doing their own trials. Sprint PCS has completed a multimedia trial and a few focus groups, said Doug Pritt, vice president of business development. Streaming media is one of the top four or five things on business development's plate, Pritt said, but they have to determine how it works and the right market timing.

"We have no idea yet how much it will cost to tap this market, don't know how to charge for it, don't know what it will cost us to provide it, don't know who the partners might be," Pritt said.

"I don't think anyone in the industry really has it sorted out," said AT&T Wireless' Nelson. "A lot of us believe that the market is heading in that direction and are putting the foundations in place, but we haven't got the whole business model worked out yet."

Answering those questions might help providers price multimedia services. Tercek said that providers can use a cable-TV model and offer basic, premium, pay-per-view, video-on-demand, subscription, advertising-supported or transaction-based price plans. Wireless multimedia won't adopt the Web's all-you-can-eat model. Because wireless bandwidth is relatively scarce, and multimedia applications can tax even fast connections, providers must charge extra for these features without knowing whether consumers will be willing to pay.

"We're talking about taking (data) out of text-based or still graphics into sound and moving image," Nelson said. "What will be the reaction to that sort of revolution? It's hard to predict."

"People like cool things, but are they willing to pay for it, and can you make money at it?" Pritt asked. "Are they willing to pay to have 144kb/s vs. 14.4kb/s? Multimedia will be the same."

Tercek said media and online-content companies are ready to sign up. Companies working with PacketVideo to explore the streaming of their content over wireless include Columbia Records; E! Entertainment Television; Foxsports.com; GO.com, which includes ABCNews.com and Disney Online; Traffic411.com; Universal Pictures; VideoGreetings.com; Warner Brothers and weather.com.

"Any company active on the Internet understands that their destiny is wireless," Tercek said. "They really want to be positioned for the next wave of streaming media, which is going to be on wireless devices."

Not As Easy As It Streams
But first, there are hurdles including speed, bandwidth and screen size. U.S. providers "have to upgrade their infrastructure," Tercek said. "In Japan, you can stream 64kb/s today. Korean (providers) intend to upgrade to 144kb/s this year. That's 10 times faster than what you can get in the United States right now."

Sprint PCS' Pritt said that challenges include understanding how streaming media affects the network and how to manage it. For providers to make a compelling offer, manufacturers must give them phones with larger, color screens, Pritt said. Pricing will be a challenge, too.

"Carriers have to look at how (to) package this in such a way to create value for (them) and create the kind of revenue that will support the network," said Nokia's Robinson.

Tercek said that predictions that 40% of Internet access will be via wireless are "totally logical. When you consider that the phone is mobile and totally personal, it's with you all the time, suddenly it's better than the Web."

For now, it's a wait-and-stream game: Providers can't roll out streaming media until after they make the necessary network upgrades.

"This definitely relies on full-3G capabilities," Nelson said. "We have to move beyond 2.5G as an industry to do this. Technology for 3G is so spectrum-efficient; that's what lets us give 20kb/s to 30kb/s per user in a stream and still be able to charge a reasonable price for it."

Until 3G arrives, Nelson said that AT&T Wireless and others will continue to experiment. He predicts that some early forms of streaming media may hit the market sooner, "but the highly evolved forms that are really reliable, work well for the customer and are economic" won't arrive until 2003.

Sprint PCS' streaming-media offerings will coincide with the full-scale deployment of its 3G network in 2002.

"Fourteen-four kb/s isn't real compelling when you look at something at five or six frames a second," Pritt said. "But when you get 56kb/s, it becomes a pretty compelling offer."

Nelson said streaming media will help the industry immensely.

"It will add to the adoption of wireless by opening up a whole other reason for having the phone and keeping it with you," he said. "The competitive advantage will probably come back to the basics of content relationships, the ease of buying the service and the value of the application that you provide across the media."