HD for everyone

SAN FRANCISCO (Fortune) -- Whether it's watching Jim Cramer and Jon Stewart trade blows on Hulu, or catching up on the latest from the Disruptors series (shameless plug, I know) more and more video is getting delivered via the Internet.

Large media companies, like NBC Universal and News Corp. (NWS, Fortune 500), the backers of Hulu (Providence Equity Partners is the third) have taken great pains to ensure that the experience of watching their programming online is a good one. Generally it is, but that quality comes with a price tag.

In 2008 an estimated $400 million was spent on delivering video via so-called content delivery networks (CDNs), according to Frost & Sullivan. That number is expected to swell to more than $1.4 billion by 2012. For those would-be broadcasters that can't afford the technology infrastructure costs of a big media company, the Internet still offers the ability to distribute video across the globe on the cheap, but the quality - even at times when it is coming from one of the big players - ranges from just OK to unwatchable.

Burlingame, CA-based BitGravity is changing that. The three-year-old company offers a content delivery network that with an investment of just a few thousand dollars in off-the shelf computer and video equipment, and a monthly fee that starts at a few hundred dollars, can stream standard definition video live to thousands of people. For a few thousand more in gear you can do full-blown high definition.

In other words, everyone can be a high-quality sports network, a news network, a home-improvement network. From the streams I have seen from Bit Gravity partners the quality of the image looks every bit as good as high-priced alternatives on the Internet today (and some of BitGravity's earliest customers are big media companies switching from those pricey technologies).

Already, a high school in BitGravity's backyard in Silicon Valley is broadcasting all its basketball games live. Because BitGravity's technology is flash-based there is nothing to download. Fans just "tune in" live on the Internet. You can imagine other schools broadcasting concerts, plays and other sporting events. Remote learning gets easier. All sorts of possibilities present themselves because of the low cost and simple setup using Internet standards.

Perry Wu, co-founder and CEO of BitGravity, says among his fastest growing set of customers are large multinational companies that want to broadcast company events live to employees and customers, or offer additional training without the additional expense of sending a team from site to site.

BitGravity is not alone in this CDN space. Competitors include Akamai (AKAM), which is the big dog of CDNs with an estimated 50% of the market, and other players like Limelight Networks. But as a newcomer BitGravity is carving out a place in the market quickly. The growth of video on the Internet places tremendous demands on the networks of carriers like AT&T (T, Fortune 500), Verizon (VZ, Fortune 500) and others, a problem BitGravity's compression technology helps alleviate. That is one reason India-based Tata Communications (TCL) invested $11.5 million in BitGravity last year.

But making high-quality video accessible to a huge marketplace is why, even in the teeth of the global recession, business at BitGravity is still booming.