U.S. Bancorp Piper Jaffray Projects Streaming Media As The Next Macro-Growth Driver on the Internet

Business Wire, Oct 10, 2000

Business Editors

MINNEAPOLIS--(BUSINESS WIRE)--Oct. 10, 2000

- Streaming Media Provides `Edge of the Seat' Content -

U.S. Bancorp Piper Jaffray Senior Technology Research Analyst Gene Munster delivered projections for the digital infrastructure sector in an in-depth industry research report on the future of streaming media. Streaming media is the multimedia content, such as audio, video, text or animation, which is streamed from the Internet, a broadcast network or a local server. It is a method of transmitting multimedia files so that playback occurs upon the arrival of the first data packets.

"We believe that streaming media is the next macro-growth driver on the Internet," Munster said. "We expect significant growth drivers in the streaming media sector including the availability of broadband, simplified ease of use, the availability of content and the convergence of the TV and the PC. We believe the Internet of tomorrow (two to five years from now) will resemble the television of today in terms of audio and video quality, while enabling users to control the media viewing experience."

In his report, Munster discusses the shift in the distribution of content from a static, analog channel to a more dynamic and robust digital channel. The shift has led to the creation of many new digital distribution channels, including digital television, cable, satellite and the Internet. It took just four years for the Internet to reach 10 million households, while it took the telephone 38 years. Munster projects that Internet penetration into households will grow at an annual rate of 20-25 percent for the next several years. In 1999, the total web streaming spending was $9.7 billion and in 2004, Munster predicts it will be $21.6 billion.

In his report, Munster lays out six main growth drivers for streaming media:

1. Demand For Interactivity. The new generation of media users

wants to enhance the traditional one-way viewing experience

with interactive capabilities such as those found on the

Internet. Munster expects that streaming media technologies

will enable the delivery of enhanced and interactive content

that new media users demand.

2. More Effective Advertising. Streaming media enables an

advertiser to place targeted ads within a media experience

that is one click away from commerce. "We believe that

consumers will be more likely to transact commerce due to the

improved convenience and timing of being one click away," said

Munster.

3. Business-To-Business Broadcasting. Munster believes that the

largest near-term driver for streaming media is

business-to-business broadcasting. This includes events such

as earnings calls, annual meetings, sales and training

seminars, product launches, trade shows, industry seminars,

telemedicine and distance learning.

4. Improved Content Distribution. Digital content is simply

binary digits that are stored on a server or other storage

device. Streaming media would enable content owners to

electronically distribute this digital content at a much lower

cost compared with traditional distribution methods.

5. Availability of Content. Streaming media would enable these

content owners to repurpose content into a form that could be

streamed over the Internet in order to generate incremental

revenue from that content.

6. Innovative Applications. Munster believes that an important

driver for the adoption of streaming media will be the

introduction of innovative and exciting applications, which

will improve the way people interact with commerce, content

and advertising.

While many private companies are emerging in the sector, Munster believes that Akamai (AKAM - 40) Pinnacle Systems (PCLE - 11 - (a)(c) will be the key beneficiary of these trends.

U.S. Bancorp Piper Jaffray, a subsidiary of Minneapolis-based U.S. Bancorp, provides a full range of investment products and services to businesses, institutions and individuals. The company's investment banking business has grown exponentially in the last several years by focusing on the needs of growth companies in the health care, technology, financial institutions, consumer and industrial growth sectors. U.S. Bancorp Piper Jaffray has a national reputation for its expertise in fundamental research and equity and debt financing. U.S. Bancorp offers a comprehensive range of financial solutions through U.S. Bank, First American Asset Management, U.S. Bancorp Libra Investments and U.S. Bancorp Piper Jaffray. Securities products and services offered through U.S. Bancorp Piper Jaffray, Inc., member SIPC and NYSE, Inc., a subsidiary of U.S. Bancorp.

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