Year in review 2011: Streaming media services redefine mobile entertainment access

The news: The National Football League and NBC will stream the upcoming Super Bowl XLVI, two wild card playoff matches and the Pro Bowl to desktops and Verizon Wireless (NYSE:VZ) smartphones. That tells you pretty much everything you need to know about the mainstream growth of streaming media services--suddenly, major sporting events, premium cable programming and new DVD and Blu-ray releases are all available in the cloud to virtually any connected device, transforming how, where and when audiences consume digital entertainment.

Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Amazon.com all kicked off major new streaming efforts in 2011. The latter beat its rivals to the punch with the March introduction of Amazon Cloud Drive, enabling consumers to securely store music in the cloud for anytime/anywhere access via smartphones and tablets as well as PCs and Macs. Google's Music Beta followed in May, allowing users to upload and store their digital music collections via the web for streaming playback across Flash-enabled connected devices including Android smartphones and tablets as well as the desktop.

Apple responded with the ambitious iTunes Match service, which essentially mirrors music library files with a 256 kbps AAC DRM-free version culled from the iTunes Store, offering consumers on-the-go access to their collections via the iCloud digital media storage platform. Users do not upload their libraries; Apple instead scans each collection, matching contents with the iTunes Store's 18 million tracks. iCloud also stores up to 25,000 songs downloaded or purchased from sources other than Apple's digital storefront. Cost: $24.99 per year.

It wasn't only traditional media giants making waves in the streaming media space. Spotify's digital music platform finally went live in the U.S. in July, ending more than a year of speculation over when the popular European service would expand to American shores. Spotify, available in both free and premium formats, offers on-demand streaming access to more than 15 million songs; users can create and manage their own playlists, share tracks via Facebook, Twitter, email and SMS and wirelessly sync their playlists to their mobile phone or iPod. Spotify has grown quickly in the months since its U.S. premiere and now boasts 10 million active users in 12 countries--rivals Rdio and MOG responded to its American debut by rolling out free streaming efforts of their own.

Last but not least, the emergence of tablets is inspiring streaming video services Hulu and Netflix to zero in on the opportunities afforded by larger, high-definition touchscreens and Wi-Fi connectivity. Bookseller Barnes & Noble's new Nook Tablet preloads both Hulu Plus and Netflix, and Amazon's rival Kindle Fire offers access to both services as well. Netflix subsequently released an overhauled version of its free streaming app for Android tablets, promising greater focus on the number of feature films and television series in its catalog, displaying twice as many titles as before to enhance content discovery. The app also leverages touchscreen interaction to allow viewers to swipe through rows of titles, complete with larger artwork. In short, everyone has their head in the cloud.

Why it was significant: As smartphones and tablets become the dominant media devices in consumers' lives, cloud-based streaming technology allows anytime/anywhere access to music and video libraries without eating up valuable storage capacity. For companies like Apple, Google and Amazon.com, streaming services expand the appeal of their digital services and the devices that run them. And for the music and film industries--as well as their distribution partners-- streaming services present much-needed revenue streams as well as new channels for audiences to discover and share new and catalog content.