Windows Media Still Rules Video Streaming

Despite the hype around YouTube and other Flash-based sites, a new report from Research and Markets still puts Windows Media way ahead in the video streaming market.

A new market research report from Ireland’s Research and Markets finds that Microsoft’s Window Media remains the dominant format for streaming video on the Internet, based on distribution volume and contracts. The report, “CDN Growth and Market Share Shifts: 2002&mndash;2006” finds that Windows Media accounted for 50.8 percent of video streams served during 2006, with Flash coming in at 21.9 percent. AOL Media Player cornered 11 percent of the market, Real got 9.3 percent, and Apple barely got on the radar with roughly 2 percent of video streams using its QuickTime format.

The continued dominance of Windows Media is somewhat surprising, given all the industry hype over sites like YouTube which push high volumes of video using the Flash format. And, indeed, Flash’s share of the streaming video market grew in 2006, jumping from 11.2 percent of the market in 2005 to 21.9 percent in 2006. And Flash does account for a whopping 97 percent share of the User-Generated Video segment of the market.

Research and Markets finds that the streaming video market was worth an estimated $600 million in 2006, including direct bandwidth accounts which don’t go through a distribution specialist like Akamai, Limelight, and VitalStream. Moreover, Research and Markets finds that the majority of user-generated video sites buy their bandwidth using 95th percentile pricing models, rather than paying for bandwidth on a per-gigabyte basis. The 95th percentile model basically involves sampling a site’s bandwidth utilization over a certain period—say, a month—then discarding the top 5 percent of readings as “peak” traffic: the net result is that a site which has “bursty” rather than steady traffic—like, say, a site which gets swarmed for a day because of a hot video clip‐can pay substantially less than a site billed on a per-gigabyte basis.