Innovator: Hui Zhang’s Hiccup-Free Streaming Video

There are seven words you can’t say on television, but only one that would-be viewers hate to see fill their online video screens: buffering. Researcher NScreenMedia estimates media companies lose $2 billion a year in ad revenue because 1 in 5 consumers gives up on patchy online videos. Computer science professor Hui Zhang says he can stop that.

Zhang’s San Mateo (Calif.) startup, Conviva, makes stream-monitoring software that big companies can use to ease network congestion. Able to oversee millions of connections at a time—as it did during its first big test, the 2008 Olympics—the software determines whether incoming video is lagging what’s on the screen. If it’s slower, Conviva compensates by lowering the resolution or switching the viewer to a different server. While companies monitoring network capacity typically keep tabs only on their own server loads, “If you have a real-time sense of what’s happening with each video player, there are ways to infer what is happening inside the network and decide what optimization steps to take,” says Zhang, 45, who teaches at Carnegie Mellon University in Pittsburgh.

Born in Harbin in northeastern China, Zhang enrolled in a science and technology university at 16. He studied computer science on his high school math teacher’s advice. In 1989, a year after starting doctoral studies at University of California at Berkeley, Zhang joined a group researching how to improve online video quality. “It was clear the killer app was going to be video,” he says, and U.S. technology was in the lead. His research on peer-to-peer streaming, including a test that brought clear video to thousands of users at once, planted the seeds for Conviva, started in 2006 as Rinera Networks. Staffers pulled some all-nighters to fix problems with software Conviva sold to its first clients, Yahoo! (YHOO) and Italy’s KataWeb, but hasn’t had such issues since, Zhang says.

Media companies including HBO (TWX), NBCUniversal (CMCSA), and Yahoo! have been using Zhang’s software in their video streaming applications for years, some since 2007. His company got its first big break when Zhang convinced former NBCUniversal Chief Technology Officer Darren Feher that he’d need Conviva’s live monitoring systems to manage streams of the Beijing Olympics, which totaled about 100 million over two weeks. In 2009, Feher signed on as Conviva’s chief executive officer. The company—which has raised $59 million in venture capital since 2006, including a recent $15 million led by Time Warner Investments—has 75 employees and revenue in the “double-digit millions,” Feher says, declining to elaborate.

He adds that Conviva, which now oversees 3 billion video streams monthly, negotiates fees differently with each client. Colin Dixon, chief analyst for NScreenMedia, says Conviva’s strength lies in adding viewer analytics like those ofAdobe (ADBE) or Ooyala to content delivery akin to Akamai (AKAM). It has no direct competitors, he says. “It’s really tough to process and deliver video at the same time.”