An Interview with NetStreams CEO Herman Cardenas

When NetStreams CEO Herman Cardenas looks five years out into the future of what will be “hot” during CES 2011, he sees amplified networking technology that completely replaces the need for audio or video receivers. Instead homes will primarily get their high-quality audio and video directly from a source, and with the use of their PCs or PDAs or other handy Internet-enabled device, they’ll control where the audio and video is streamed, whether it’s simultaneously to many rooms in a house for real-time enjoyment of concert video or whether it’s gaming material to the kids room, regular programming to the family room, or audiophile grade audio to the den. “We’re developing the technology now to do this,” says Cardenas. “The transition will be slow at first, but in a couple of years, it will really pick up steam.”

This is no idle boast from someone counting his chickens before they hatch. On the contrary, Cardenas has been involved in wiring, lighting, and audio-networking technology for many years. Originally heading GE Smart when it was a joint venture of Microsoft, GE, and he himself, Cardenas retained the rights to the company’s audio technology as Microsoft withdrew to go its separate way and GE acquired the lighting and wiring technology. Cardenas wanted the rights to the “audio” technology because he felt it wasn’t getting the attention he thought it deserved from the combined company. GE and Microsoft gave Cardenas the green light, and the concept for NetStreams was born.

In the past three years, Cardenas has relocated from New Mexico to Austin, Texas, where he has assembled a team of audio, video, and computer-networking engineers that now numbers near 40 (with staffers also in Taiwan and South Korea). His company NetStreams has also introduced patent-pending StreamNet technology that distributes uncompressed audio over CAT5e using TCP/IP on a segmented section of Ethernet from a single source to multiple rooms with a maximum delay of 1 millisecond between any two speakers—a feat no other company has achieved. This Internet protocol system allows network (and speaker) control through any Webenabled device as well as unprecedented capability to stream simultaneous audio from point to multipoint.

That in itself is amazing enough, but NetStreams has picked CES 2006 as the venue to announce its next breakthrough technology. Over the course of the year, the company will introduce a number of products that do for high-definition video what the company has already done for high-end audio—technology that will allow a single- source home theater to stream multichannel audio/video to multiple rooms without discernible loss of quality and in near real-time (well below the 20 millisecond delay threshold that audiophiles are able to detect).

Intrigued by the promise of multichannel video streaming and its implications for convergence technologies, we sat down with CEO Cardenas.

TPV: What drives NetStreams —home control or home entertainment?

HC: NetStreams has a passion, but our passion is home entertainment, unlike some companies in the CEDIA market who are focused on home control first with entertainment (multiroom audio) as a second thought. Our second area is control. Although we integrate with lighting, security cameras, and all those wonderful things, we’ve made that secondary in our company. We recognize that consumers’ most compelling reason for investing in their home is entertainment—not just raising curtains, turning on the fireplace, and controlling the lights. So in the long run, we’ll look like the Crestrons and the AMXs, but we will do audio and video better than anyone else. We’re still the only company distributing high-performance audio over TCP/IP. Some companies have specific applications for distributing MP3s or audio from a computer. But our focus is to take the experience a consumer has and distribute it at 100 percent—that includes legacy sources. We have consumers who have record album collections—I still have some—it’s cool to see that if we have a turntable, we can take its audio and convert it into 96kHz, 24-bit streams and deliver it to multiple locations in a home. And that goes for 8-tracks or cassettes or whatever you have.

TPV: How did you come by the technology to do what you’re doing?

HC: We had to create it—we had to because no one else in the industry had technology to enable the applications we wanted. It isn’t just about getting audio from point A to B digitally over TCP/IP—we were doing that four years ago at GE Smart. That didn’t solve the problem. The problem in our industry that could prevent us competing against the computer industry, if they ever get their act together, is that our stuff is so difficult to integrate that it takes a very skilled twoyears- plus integrator to plug everything together and figure out how to make it work. Our industry runs wires over long distances with matrix switches and racks of equipment and a lot of programming. Even matrix switches costing thousands of dollars are called “dumb bricks” because you