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Williams Communications has big plans for broadband in 2001.
At an investor conference last week, the Tulsa, Okla.-based network operator unveiled plans to extend its traditional television transmission and video business into the high-speed Internet. Armed with a brand-new 33,000-mile fiber backbone, Williams' Broadband Media Services division will start building a business helping cable operators and broadcasters, in particular, create video content end users actually want to pay to see.
"There really isn't video out there people are willing to pay for," says Laura Kenny, president of Broadband Media Services. "Our focus is to bring quality content to the home that people are willing to pay for through subscription or though pay-per-view."
Williams will build its broadband business on the content relationships it has forged through its 12-year-old Vyvx broadcast video transmission service. Vyvx handles about 85 percent of the U.S. sports events transmissions for cable and television networks and about 60 percent to 65 percent of the live television feeds. Its advertising distribution system also serves up commercials to local broadcast stations.
To extend that into the broadband Internet sphere, the company has created a new division dubbed MediaXtranet. Its task will create services helping content owners gather, manage and distribute content.
"Our intent is to play a key role really in each of those three areas," Kenny says.
To gather content, MediaXtranet will use three media edge hubs in New York City, Chicago and Anaheim. Each has large storage servers and encoding facilities to funnel and convert video for Internet delivery.
From there, Williams will manage the content, either storing it at the hubs or moving it across its own 33,000-mile network to edge servers. Then it will be delivered to local networks via Williams points of presence.
The Williams strategy is not to position the company as a direct content provider but rather a business-to business service. For example, instead of creating its own video-on-demand service, Williams will create services to support partner VOD providers.
At a time when Internet content startups are dying left and right, Williams will base its client list on traditional cable and broadcast networks, as well as professional sports leagues with content rights.
"We clearly are focused on how to enable networks to access this technology, and we view them as our anchors," Kenny says. "These are strong companies and have been around for a long time--and they tend to pay their bills."
She added it would look at some new media outfits, "but obviously we'll be very selective as to what companies we sign up."
"Being in this business as long as we have, we know where the black holes are," Kenny adds.
One motive spurring Williams Broadband Media Services into this arena now has to do with the growth projections for high-speed Internet access. "We believe some six million homes are broadband equipped by the end of last year, which will be 11 to 12 million by the end of this year and 35 million by the end of 2005," Kenny says. "Clearly, there is a breakthrough in the technology now."
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