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Today's report from the staff of Broadband
Week
• Covad Details A Tough Outlook for Q4 and 2001
• Streaming Media West Report
• Whither Digital Cable?
• Broadband Briefs
Covad Details A Tough Outlook for Q4 and 2001
Struggling data CLEC Covad Communications (www.covad.com) has lifted the lid on its upcoming financial results, and as expected it's not pretty. The company, which already has announced a restructuring to cut costs and turn around its flagship DSL business, says it will take a fourth quarter charge of $20 million to account for the restructuring, while revenue will be between $60 million to $65 million. Fourth quarter 1999 revenue was $30.9 million, and the company had a net loss of 80 cents per share.
Covad also expects its operating cash flow loss in the current quarter to be between $180 million and $190 million, compared with negative EBITDA of $52 million in the year-earlier period.
Next year, the company expects to add up to 190,000 installed lines, for a total of possibly 460,000, as it limits its network buildout and attempts to hold the line on costs. Covad forecasts 2001 cash flow losses of up to $470 million, versus its previous expectations for negative $550 million, and revenue could grow to $390 million. The restructuring also should help slow Covad's cash burn rate to less than $60 million monthly from the current $75 million, enabling its current funding
Streaming Media West Report
Surprise! Microsoft and Real Networks
are talking about enhancements to their streaming media platforms that they say will boost digital media delivery into a true mass medium. Corporate bigwigs today are using the
Streaming Media West 2000 show in San Jose, Calif., to tout the latest and greatest developments, not just by the two leaders in streaming video and sound but also by the raft of companies trying to strike gold in that field either by providing content or delivering it.
On the ground in San Jose, Broadband Week associate editor Karen Brown reports that Microsoft CEO Steve Ballmer led off the show with a keynote announcing availability of Windows Media Audio and Video 8, which the number two streaming platform provider says delivers breakthroughs in compression technology. Ballmer says Windows Media Video 8 enables delivery of "near-DVD quality" video at speeds of 500 kilobits per second, a critical factor in shrinking the amount of bandwidth a content provider needs in order to distribute its product. Also, the new audio player delivers CD-like sound at 48 kbps, Ballmer says, enabling file sizes to be about one-third the size of MP3-formatted music of similar quality.
Bandwidth considerations are huge not only for service providers such as cable operators who must allocate it among hordes of potential channels, but also for mass market users who typically still don't have broadband connections topping
256 kbps.
Not to be outdone, dominant streaming media technology developer Real
Networks took the wraps off its new RealSystemiQ content delivery network architecture. CEO Rob Glaser says a key element is its enabling of peer-to-peer connections among streaming servers, which he says will cut network congestion by eliminating the reliance on origin servers to deliver content to the network edge. That will result in improved sound and picture quality, trim service provider costs and boost reliability over large geographic areas, Glaser promises.
The market stakes for these competitors is huge. Nielsen/NetRatings reports today that streaming media consumption has risen to all-time
highs, jumping 65 percent in November from a year earlier to 35 million Web users in the residential market alone. Some 36 percent of all Web surfers accessed some form of streaming media last month, Nielsen/NetRatings notes.
Whither Digital Cable?
With the growth of broadband delivery platforms to the mass market, cable apparently still will retain the upper hand for a while. That's the conclusion of a couple of new studies that see cable operators continuing to hold the lead over satellite and other terrestrial digital service providers.
Allied Business Intelligence
says that although the first wave of digital set-top box deployments was dominated by direct broadcast satellite providers such as DirecTV and Echostar Communications, the second wave of boxes with "thick client" advanced capabilities could be led by cable. By 2005 cable will account for 40 percent of the worldwide digital set-top installed base, "and should have begun to outsell boxes based on the satellite platform."
Terrestrial digital TV box sales will not likely have a meaningful impact until after 2003, Allied analyst Joshua Wise says, because of delays in broadcast standards in the United States and a lack of programming.
Taking a broad market view, the Yankee Group
says that U.S. digital cable subscribership could grow to 27 million by year-end 2005 from only about 7.7 million this year. Spurring the market will be continued consolidation among cable operators plus new product and service offerings such as video on demand.
Broadband Briefs:
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A group of technology industry players including Cisco, Philips, Apple and Kasenna have launched the Internet Streaming Media Alliance to push for open standards for streaming rich media over Internet Protocol networks.
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Thomson Multimedia subsidiary Singingfish.com today launched a new streaming media search service delivering access to more than six million indexed streams.
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Broadband content solutions developer Incanta unveiled a group of services aimed at enabling broadband service providers to offer subscription and pay per view streaming media.
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Networks developer Zhone Technologies is acquiring Xybridge Technologies, adding Xybridge's softswitch to Zhone's converged access architecture.
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Interactive television infrastructure provider Commerce.tv has raised $23 million in a Series C financing round, to support upcoming cable deployments and development of next-generation services.
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