While the use of streaming video for entertainment and other consumer applications has been sluggish and profits elusive, Jupiter predicts that companies will refine the technology internally before delivering it to partners or clients.

Product launches and marketing applications will account for the bulk of streaming video spending over the next several years, Jupiter says.

Big Meeting

Jupiter reports that 90 percent of companies using streaming video technology are doing so to reach large numbers of employees simultaneously. Internal communications , ranging from executive addresses and sales training to meetings with other companies, are key for companies looking to enhance efficiency.

"Early adopters of streaming technology are using it for critical internal communications -- especially training staff on new sales programs, products and services -- because they understand the tremendous productivity gains," said Jupiter senior analyst David Rader.

"Company-wide streaming video distribution not only means reduced travel costs but faster and more consistent rollouts of new programs and products," Rader added.

Reaching Out

The Jupiter study -- Streaming Video Adoption in the Enterprise Market -- reveals that at $80 million in 2001, most corporate spending on streaming video is currently for internal announcements. However, by 2005, the bulk of the outlay for streaming video will be for product launches and marketing applications.

Jupiter analysts say that more complex external uses of streaming video applications will begin increasing after companies overcome the technological hurdles, and, more importantly, see evidence of a return on their investment in internal streaming.

"People are really kind of experimenting with it right now," Jupiter research director Marc Harrison told NewsFactor Network. "It's really not as critical if quality is dubious for internal communications. You absolutely need high quality to go externally."

Added Rader: "Early adopters who have already been using streaming technologies to communicate internally are now considering their options for delivering secure streaming to partners and distributors."

On-Demand On the Rise

Jupiter also predicts that live and on-demand streaming video will account for the bulk of corporate spending, and will reach $1.9 billion -- or 65 percent of all streaming video spending -- in four years.

"Jupiter analysts believe that on-demand streaming content ties into the core value propositions of streaming: repeatability, consistency of message, and pervasive and dynamic access," Jupiter said in a statement. "The rapid growth of training applications fuels the growth of on-demand streaming as a growing number of enterprises need to reach employees at various locations.

Streaming in Public

Jupiter also predicts some changes in the use of streaming video over the next 18 months. The percentage of companies that use streaming technology to deliver executive addresses, for instance, is expected to drop from 48 percent to 16 percent. Jupiter predicts streaming earnings announcements will also decline.

External use of streaming video, in contrast, will more than triple from its current 13 percent to 45 percent in a year-and-a-half, according to Jupiter. Product launches, B2B collaboration and customer training are other areas where Jupiter sees increased use of streaming.