Streaming, both live and VoD, has perhaps become the most popular way to consume media today. But what is streaming at its core? How does it work? In essence, streaming is the real-time transmission of audio and video content over the internet. Unlike traditional methods of consuming audiovisual content, which involve downloading a file to play through a program, streaming allows viewers to access content instantly. This has therefore changed how we listen to music, consume the news, watch movies and play video games, —Netflix, Spotify, and YouTube are just some examples— making it easier than ever to access entertainment and connect with each other in just a few clicks. 

How does streaming work?

So, how does streaming work on a technical level? In simple terms, streaming involves continuously transmitting data over the internet, allowing viewers to access audio and video content in real time. In order for this data to be transmitted, it is broken down into small packets of data, which are sent across a network from a server to the end user’s device, be that a laptop, television, phone, etc. Once these packets of data reach the intended device, they are decoded and played almost instantly. 

Streaming technology allows for scalable and flexible media playback, automatically adjusting the quality of audio or video depending on the available internet bandwidth, connection, and device being used, to minimize buffering events and provide a smoother, high-quality experience. Although sometimes disruptive, buffering plays an important role in permitting a continuous video stream, given that it involves preloading and storing a portion of a media file in the buffer or temporary memory of a device to prevent interruptions in playback. 

How has streaming transformed the entertainment industry?

Streaming technology has had a profound impact on the entertainment industry by changing how content is produced, distributed and consumed around the world. Perhaps one of the most notable examples of disruption is Spotify. Streaming technology has been central to Spotify’s success, having leveraged a peer-to-peer (P2P) system that allowed songs to be stored across users’ devices, reducing load times and server costs in the early days. Later on, Spotify transitioned to a cloud-based model to ensure seamless, scalable global access. Spotify’s innovation transformed the music industry, reducing the demand for physical CDs, which had an enormous impact on musicians and artists by shifting revenue models from album sales to streaming royalties. 

In terms of video content, the convenience of on-demand viewing through platforms such as Netflix, Amazon Prime and Disney+ has also transformed the entertainment industry. This innovation has led to a decline in cable subscriptions and theater attendance trends, as they offer vast libraries of content that are accessible in high-quality viewing straight from your living room. These same streaming platforms have also become producers of content with great success, exemplified by series such as “Stranger Things” and “The Crown”. The shift to on-demand home viewing has transformed the film industry by reshaping production, revenue and consumption patterns. Driven by subscription-based revenue, streaming platforms now prioritize binge-friendly content, reducing reliance on more traditional box-office sales. According to a 2024 report by IBISWorld, the U.S. movie theater sector has experienced a revenue decline at a CAGR of 6.1% between 2019 and 2024.

How does System73 transform live content streaming?

At System73, we have developed an innovative approach to streaming that leverages advanced AI-driven logistics and peer-to-peer (P2P) technology to enhance live content delivery. Our Edge Intelligence solution, designed and developed for live content streaming, continuously monitors and analyzes the open internet to identify the least congested delivery routes, and ensure optimal bitrate transmission to end-user devices. By orchestrating centrally managed broadcast trees, we facilitate safe and infinitely scalable P2P networks capable of maintaining high Quality of Experience (QoE) for up to 94% of viewers, even in regions with limited traditional CDN coverage.

This approach not only improves streaming quality, it also significantly reduces operational and delivery costs for content publishers and distributors. By offloading up to 80% of streaming traffic onto our orchestrated P2P network, we decrease reliance on physical CDNs and edge servers, effectively bypassing congestion and minimizing buffering events. This reduction in CDN dependency leads to lower delivery expenses and increased profitability for live content providers. Additionally, our proactive, AI-driven traffic management minimizes disruptions, reducing viewer churn and enhancing overall customer satisfaction.

For more information on our streaming technology, Edge Intelligence, or to speak to a member of our team about integrating System73 into your content delivery strategy, visit www.system73.com.

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