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Delays and interruptions in the delivery of content mean the loss of viewers, which can deeply hurt the financial performance of media companies.

But Streamroot believes that its video-delivery systems can eliminate these problems and improve streaming quality while reducing delivery costs by 55% to 85%. The five-year-old company enables peer-to-peer networks of user devices, mixing them with existing content delivery systems (CDNs) to stream content from the quickest available sources.

“Streamroot’s peer-to-peer delivery solution intelligently multi-sources content from both the CDN and a mesh network of devices playing the same content at the same time,” Streamroot co-founder and CEO Pierre-Louis Theron told Karma Network. “Instead of burdening the system, each additional viewer makes it stronger, relieving networks and server congestion.”

User experience and affordability have become more critical than ever — trends that are only likely to intensify. Technology conglomerate Cisco predicted that IP video traffic would quadruple from 2017 to 2022. Streamroot maintains that current infrastructure will struggle to meet this demand while ensuring a quality experience.

“People are less tolerant of re-buffering, of poor video quality,” Erica Beavers, head of Streamroot’s marketing, said at the 2016 Streaming Media Conference.

A 2018 study by research firm Conviva found that a 0.2% percent increase in re-buffering ratio — the amount of time for re-buffering relative to the duration of a video — reduces the time that someone watches a video by eight minutes. Moreover, additional increases can reduce viewer engagement by more than 50% percent. Conviva is a research and consulting firm that tracks streaming trends.

More established CDNs rely on central servers that Streamroot says are less efficient and more costly to operate. The largest CDNs may spend millions monthly on these servers, whether demand for content is high or not. The servers are needed to ensure CDNs can meet times of peak viewing.

“The CDN market is extremely crowded but also stuck in a paradigm: It is extremely expensive. The ecosystem is extremely inefficient,” said Clement Cazalot, managing director of the Boston office for the venture capital firm Techstars and an early Streamroot investor, told Karma Network.

Cazalot believes that Streamroot’s decentralized system offers the best combination of quality and low cost. “You don’t need a master of ceremony,” Cazalot said. ‘The beauty is that when you’re engaged, the video playing is passing information to other video players. You become a node.”

Peer-to-peer networks have been associated with the illegal file-sharing applications that have plagued the content delivery space. Streamroot was forced to demonstrate the usefulness of its products for legitimate purposes. “The evangelization was a challenge, getting the first customer to trust you,” Theron said.

More recently, the company has had to demonstrate the advantages of its peer-to-peer model over older systems. “When technology is breaking up something, it’s a big deal,” he said.

Streamroot appears to be overcoming the skepticism. Clients include Paris-based Canal+; public broadcaster France TV; sports media giant Eurosport; and Daily Motion, a unit of media conglomerate Vivendi and one of the world’s largest video hosting platforms. Streamroot revenues grew fourfold in 2018 and are on pace to triple this year, though the company wouldn’t disclose exact numbers.

The company has focused largely on European markets, particularly France, where Streamroot originated and maintains a Paris office. It now calls New York its headquarters as it seeks opportunities in the media-rich U.S. market.

Funding
Streamroot has raised about $6 million in investment capital, including seed capital rounds. In its most recent financing in September 2017, it received $3.2 million from four venture capital firms, Techstars Venture Capital Fund, Verizon Ventures, RG/A and Partech Ventures.

Partech invested in Streamroot’s earlier rounds. Verizon Ventures is the investment arm of telecom conglomerate Verizon, which has been looking for promising, young businesses related to its industry.

History
Streamroot is the brainchild of Theron, Axel Demas and Nikolay Rodionov, who met as computer science students at the École Centrale Paris, one of France’s most prestigious engineering schools. The trio became interested in the potential of peer-to-peer systems for streaming and turned a student project into their company.

“The beauty and elegance of the (peer-to-peer) technology has always fascinated the three of us,” Theron told Karma Network in a phone interview. “In terms of networking and deployment, it makes more sense to have decentralized distribution instead of having everyone going to a centralized point to get the content. We always believed the web should be a much more decentralized place.”

The company benefited from NUMA, a leading technology accelerator in France that helped connect it to Cazalot and other investors. Cazalot provided about $70,000 in seed money during Streamroot’s first couple of years before assuming his current job with Techstars. In the $3.2 million funding round, Techstars invested about $1 million.

Technology
Streamroot offers four products, which sometimes overlap.

Its core Streamroot DNA solution creates a mesh network from individual devices and combines these points of contact with established content delivery networks (CDN) to stream major entertainment, sporting and other events, and content of lesser significance. This multi-sourced approach differs from more established CDNs such as Akamai Technologies, MaxCDN, Fastly, Amazon Cloudfront, Cloudflare and KeyCDN, which rely on centralized servers and are more costly because they must maintain their servers. Streamroot DNA can ramp up quickly for World Cup soccer games, Grand Slam Tennis tournaments and other attention-grabbing fare.

DNA Complete combines the peer-to-peer network with a traditional CDN in one package. “It is a good option for those who prefer to have a single point of contact for all video delivery matters,” Theron said.

DNA Enterprise serves corporate video needs, a growing market as large companies seek more efficient ways to connect with employees who may be spread in different locations. Streamroot says that its systems will not require these organizations to spend additionally on hardware.

DNA Compass allows companies to use multiple existing CDNs more efficiently. It operates separately from the peer-to-peer networks. Many broadcasters employ different CDNs to ensure they can provide quality service to a wide population.

DNA Compass draws real-time feedback from viewers’ computers and other devices to determine the CDN that provides the best viewing experience.

Plans
The company is looking to raise additional capital toward the end of this quarter or in the following one. It plans to use the funding “to accelerate, and compare different markets that we’re going to go after,” Theron said.

Streamroot hopes to open its next office in the Asia Pacific Rim area, perhaps in Singapore.

Theron said that the region offers abundant opportunity. Earlier this week, 18.6 million people in India used the Hotstar website to stream the deciding match of India’s biggest cricket tournament. That total set a global record for concurrent streaming views. Hotstar is a unit of The Walt Disney Company.

“We want to be in a position to have people over there (Southeast Asia),” Theron said. “The adoption is because they (the countries) there are starting from scratch. They don’t have any infrastructure.”

James Peter Rubin is a veteran journalist who has written and edited for CapitalWatch, ThirtyK, TheStreet.com, Forbes and the Economist Group, among other media outlets.