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

Business Wire, Oct 6, 2000

Business Editors & Technology Writers

MINNEAPOLIS--(BUSINESS WIRE)--Oct. 6, 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 million and in 2004, Munster predicts it will be $21.6 million.

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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