VentureBeat

DigiMeld has launched a new technology aimed at making high-definition videos play more smoothly over the web.

The New York-based company has also raised $2 million in a first round of funding from angel investors. The company tested its “grid streaming” technology with NASA’s TV network.

DigiMeld has already completed a series of live tests with NASA that include the simultaneous broadcast of a space shuttle launch. The company reports there was no down time and it had more than 100,000 HD concurrent video streams. That is, more than 100,000 people watched the launch at the same time on the web.

The patent-pending technology was developed by Alex Mashinsky, founder of the Arbinet-theexchange. It uses intelligent distribution of content among a network of Internet video viewers. This so-called “peer-to-peer” technology is being pursued by companies such as Andolis.

DigiMeld competes with start-ups such as Andolis and BitGravity. It plans to market its solution to established content-delivery networks such as Akamai, which sets up a series of servers around the Internet to deliver video to users. There is a contrast between DigiMeld’s technology and others. While some companies use a group of peers to distribute video in the fashion of a tree — with each user a separate branch — DigiMeld uses a structure that resembles a grid. If you lose branches, your video quality can suffer as a result. But in a grid, there is more redundancy and a single user isn’t as important.

Unlike traditional CDNs or multicast network solutions, DigiMeld allows each viewer in the DigiMeld grid streaming network to simultaneously retrieve, view, and share streaming video data with other viewers, inside an encrypted network. While file-sharing firms such as BitTorrent store an entire video file on a viewer’s hard drive, DigiMeld stores only a portion of the streamed content on the client. This small portion is continuously overwritten by newly-arriving video data. That makes the network more efficient in terms of use of bandwidth and it improves the ability to protect the content from piracy.

This kind of technology is going to become more important as people share more video online — and network operators such as Comcast struggle with the amount of video being shared. Comcast recently decided to put limits on the people who download the most video on its cable-modem network.

The company is also developing a portal for narrowcast video publishers to test its network. It is creating a personalized video player that can generate a user-controlled playlist for self-publishing video channels, gather stats, or create geographically targeted broadcasts. DigiMeld sends its traffic via the best-performing Internet service provider at any given time.

Mashinsky founded the company 2.5 years ago.

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Gazprom-Media reportedly acquiring RuTube, Russia’s Answer to YouTube – Russian newspaper Vedomosti reports a deal has been reached by Gazprom to acquire RuTube, citing an investing banker and source close to Gazprom-Media. Both companies confirmed they are negotiating a deal. Reports emerged of such a deal as early as July. More from Yakov here.

WSJ will stay subscription based, said its new owner Rupert Murdoch — “The really special things will still be a subscription service, and, sorry to tell you, probably more expensive,” he said. But then again, he also said the WSJ would expand and improve the free content, and that ultimately could mean the majority of the articles, which will be short-form in nature.

Recording industry to start going after internet service providers — A French policy of forcing ISPs to monitor customers for illegal file sharing, and disconnecting those customers after three infringements is paving the way for the recording industry to try to introduce similar policies around the world, including in the US. PaidContent has more.

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World Wide Packets, Ethernet access switch company, sells for $280 million — Ciena has picked up the eight-year-old World Wide Packets, after that company raised $147M from a group of investors including Argo Global Capital, Azure Capital Partners, Eagle River Investments, Entrepia Ventures, Madrona Venture Group, Northwest Venture Associates and Rally Capital. In addition to $280 in cash and stock, the purchase includes $15 million in assumed debt. The Spokane Valley, Wash. company has $30M in revenue.

Television and especially high definition television is something that we’re already seeing as a viable method for internet distribution. Best found in the rampant use of torrents, the widespread availability and demand for high-definition TV (HDTV) is already upon us.

But currently there’s no efficient method to stream media at such high resolution - a problem that Akamai is attempting to solve by expanding the company’s delivery hardware. Akamai plans to overcome speed limitations by building closer proximity to cable providers and more importantly, to the end user. Diminishing physical distance helps to not only maintain faster speed but also a more consistent bandwidth.

While bulking up on hardware isn’t sexy in a peer-to-peer age, Akamai’s push into HD marks a decisive advantage over competitors, like Limelight and Move Networks. Akamai has aggressively maintained its dominance in the content-delivery-network (CDN) market, despite the recent influx of companies, by buying up a P2P competitor (Red Swoosh) as well as content management tools (Nine Systems). By integrating Red Swoosh’s efficient distributed delivery mechanism (read P2P) into its hardware, Akamai is lowering its distribution costs to manage while other CDN companies begin a price war.

Thankfully, updating software for HD television on the internet will not be as costly as Akamai’s hardware upgrade. Adobe’s adoption of the video codec H.264 (a compression for video that uses substantially smaller file sizes) into the ubiquitous Flash will only fuel the fires of delivering HD content over-the-web. The improvements to Flash’s video have taken cues from the continued popularity of the Apple Trailer web site with its use of H.264 for high-definition video. Similarly hopeful for internet HD TV is the implementation of Microsoft’s Silverlight technology. Built into Netflix’s new Watch-Now service, Silverlight allows interaction with other users as well as solid Operating System for video watching. Netflix’s service was built in less than three weeks for a presentation and left many drooling in the audience.

However, the timing of Akamai’s announcement comes after a disappointing second quarter for the company and facing the “possibility that after two years of extremely rapid expansion, video streaming and consumption is flattening.” The glimmer of hope is that streaming HD television through the internet is a market with large potential. For the broadcasting industry, who are particularly interested in maintaining vertical distribution, streaming is the ideal method of providing content without worrying about pricing, piracy and ownership - the main issues which resulted in NBC’s recent pullout from iTunes downloading service.