Streaming video company hopes to set the wireless multimedia on fire

Streaming media is one of those Dick-Tracy things people usually dismiss as hogwash. But an Israeli streaming-video company may be changing the industry’s tune.

Earlier this summer, Emblaze Systems demonstrated its MPEG-4 chip - the A2 - on a commercially deployed 1XRTT network in Korea by streaming video wirelessly between Seoul, South Korea, and a small town about an hour away. Emblaze (www.emblazesystems.com) conducted the demonstration with partners Samsung (www.samsung.com) and its South Korean carrier partner, which Emblaze declined to name.

The Samsung SPH X-2000 video cell phone incorporates Emblaze’s A2 video ASIC chip, which provides a level of clarity and quality transmission that is directly relative to the abilities of the carrier network it operates on -- whether that be 2G, 2.5G or 3G.

It’s currently compatible with existing CDMA systems at speeds of 9.6kb/s, 64kb/s and cdma2000 1X networks running at speeds approaching 144kb/s. The phone sports a 1-by-1 inch color screen (176-by-144 pixels).

Users first view a start-up screen filled with animated characters and text, after which a menu allows them to choose from news, entertainment, sports and nine other categories.

Ziv Eliraz, Emblaze vice president of business development, said the chip adds a small amount to the total handset manufacturing cost. Other components in the new handsets increase the total cost much more. For example, color LCD screens add between $50 and $100 while a black-and-white screen cost much less than that.

When talking with major carriers, Eliraz says the most common question they ask him is, “Is there a killer app?” His answer is: Access to information.

“There’s no business model for anything on the Web today - text or streaming media,” he said. “Content companies’ reluctance is holding the business model back. Now we’re in the early adopter phase.”

In Japan, color handsets are everywhere. And they’re cheap - about $150, according to Eliraz. But Emblaze sees the United States differently. The United States is a conservative yet competitive market where mass-market adoption is harder to achieve, but more profitable than anywhere else.

The Emblaze system works through a process that starts with encoding content, pushing it through a server and outputting that content via an MPEG-4-enabled device. The encode function is the domain of content providers, while servers run on the carrier’s network.

Although Eliraz said standards alone are not holding the industry back, debate over streaming technology is heating up. In related news, Adi Plaut, a systems interoperability specialist at Emblaze, was elected to chair the newly formed Packet Switched Streaming Activity Group of the International Multimedia Telecommunications Consortium (www.imtc.org). Plaut was elected by the IMTC board of directors, including representatives from Avaya (www.avaya.com), British Telecom (www.bt.com), Cisco (www.cisco.com), Forgent (www.forgent.com), France Telecom (www.francetelecom.com), Intel (www.intel.com), IBM (www.ibm.com), KPN Telecom (www.kpntelecom.com), Microsoft (www.microsoft.com), Siemens AG (www.siemens.com), Nokia (www.nokia.com), PictureTel (www.picturetel.com), Polycom (www.polycom.com), Telverse (www.telverse.com) and WorldCom (www.worldcom.com). PSSAG was formed by IMTC to promote and define interoperability testing for the 3GPP’s (www.3gpp.org) technical specification 26.234 (transparent end-to-end packet-switched streaming service, release 4).

And if standards discussions weren’t enough to deal with, Emblaze has its fair share of competition in the nascent industry. Companies such as ActiveSky (www.activesky.com) and PacketVideo (www.packetvideo.com) also market wireless multimedia technology solutions. A large area of divergence is in technology approach. While Emblaze strongly supports its chip-based approach -- citing the low processing power of current handsets -- some other companies provide software-only solutions for encoding and decoding multimedia content for wireless transmission.

Eliraz proudly discusses his company’s profitable status -- $30 million in current year revenue, with a projection for $60 million next year. The company employs nearly 400 and has a worldwide sales force of 60, which has tagged every major wireless carrier in the world as a possible Emblaze customer.

Ambitious? Yes. But Eliraz feels confident ($400 million in the bank helps) about the future of Emblaze within the $60 billion worldwide (projected) streaming video market.

By setting up relationships with top content providers in nearly every category (Associated Press (www.ap.org), Bloomberg (www.bloomberg.com), Playboy (www.playboy.com), ESPN (www.espn.com) and the like), continuing to work with leading technology partners (Oracle (www.oracle.com), Nokia, Ericsson (www.ericsson.com), Microsoft, Symbian (www.symbian.com), ARM (www.arm.com), Samsung, Energis (www.energis.com), Lucent (www.lucent.com) and Tornado Development (www.tornadodevelopment.com)) and by adding carrier customers to its current list (Demon (www.demon.net), Singtel (www.singtel.com), Libertel (www.libertel-vodafone.nl), One2One (www.one2one.com), France Telecom, Smartone (www.smartone.com.hk) and Sonofon (www.sonofon.dk)), Eliraz just might have a point. A North American wireless carrier customer may be announced by Emblaze later this year. Eliraz would not comment further on that possibility.

In addition to agreements with carriers, handset vendors, infrastructure providers and others, Emblaze has a unique relationship with Microsoft to support its Windows Media technology. “We support MPEG-4 and Win Media because we don’t want to bet on just one horse,” Eliraz said. He also said Emblaze takes a long-term view of market development for streaming media, adding that any significant interest in the technology will not come until 2006.

“Today, it’s up to us to make it happen. Eventually component costs will drop, bandwidth will increase and the services will decrease in price. But big barriers today are technology decisions and application decisions.”