GridNetworks Speeds Streaming

A Seattle startup founded by RealNetworks alums launched today, promising to halve the cost of distributing movies online. The company, GridNetworks, is hoping to sign up content distributors and set-top boxes, and already has a few customers using its distributed network, a command-and-control form of P2P that clusters all the bits well enough to do streaming.

GridNetworks requires download of its (Window-only, for now) player. In our tests high-quality video streamed quite fast, without jerks or annoying pauses for buffering. The company says it can deliver a 1.2GB movie at a cost of 25 to 50 cents, and it will handle packaging, pricing, geographic distribution, release windows, and all the messy stuff involved with selling movies.

We met up with GridNetworks co-founder and VP of sales and marketing Bo Wandell at Digital Hollywood last week. He and CEO Jeff Payne had previously collaborated on Spry’s “Internet-In-A-Box” way back in 1995. Payne was recently at network appliance maker Bivio Networks. For the new company, the two have raised $500,000 in angel funding and have built a team of 15 employees — nothing on the scale of competitor Kontiki, which was bought for $62 million by VeriSign after raising $46.5 million and signing customers such as Sky, AOL, and the BBC. GridNetworks’ first deployed customer is online video store ReelTime Rentals, which launched in September. It is also in trials with some web-based television channels for gaming and healthy living.

We think instant gratification for online movie-watchers is a big opportunity. The P2P sector has been quiet recently, but hopefully companies like GridNetworks and the highly anticipated the Venice Project can bring the energy back.