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CES: PerfectStream's new way to stream

January 9, 2010 |  9:57 am

The brass ring for a technology start-up is to create something that disrupts the established way of doing business, displacing incumbents and opening the door for new firms. Of course, it's not enough to merely create such a technology; companies also have to persuade the market to embrace it.

That's the challenge facing PerfectStream, a German start-up backed by Karlheinz Brandenburg of the Fraunhofer Institute for Digital Media Technology. Brandenburg knows a little bit about disrupting markets: He's the co-inventor of the MP3 audio compression format. Audio and video streaming have already proliferated online, but PerfectStream came to the Consumer Electronics Show this week to demonstrate a different way to do it. 

The company upends the status quo in two basic ways. First, it can stream audio and video interactively to just about any device that can play media from the Internet, not just PCs and smart phones. (For example, one of the PerfectStream demos at CES showed video being transmitted to a Polaroid digital photo frame.) That significantly expands the audience for personalized streams and targeted advertising. And second, instead of encoding a song or video multiple times to accommodate faster or slower Internet connections, PerfectStream takes a single master and encodes it on the fly for each user, increasing or decreasing the file size in real time to adapt to connection speeds.

PerfectStream has just started showing its wares in the United States, and yet to announce any customers here. A group of German broadcasters, however, is already using the company's technology to insert location-sensitive ads into webcasts outside of local markets. The technology can also be used to create personalized combinations of streams -- think of CNN with a different ticker across the bottom for different viewers -- or sequences of programs, PerfectStream's Nikolas Samios said. He added that ads can be targeted as narrowly as individual users, if they opt in.

Other potentially disruptive capabilities of the technology include streaming games to nongaming devices and, in the future, delivering high-definition and 3-D video to screens connected to older tuners or PCs (provided that the screens have the requisite number of pixels). I'm sure manufacturers of television sets trying to sell expensive new 3-D TVs will be delighted to see that.

-- Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division. Follow him on Twitter: @jcahealey