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The term "streaming" was first used for tape drives manufactured by Data Electronics Inc. that were meant to slowly ramp up and run for the entire track; slower ramp times lowered drive costs. "Streaming" was applied in the early 1990s as a better description for video on demand and later live video on IP networks.

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It was later also widely adopted on websites along with RealPlayer and Windows Media streaming formats. The first commercial streaming product appeared in late 1992 and was named StarWorks. StarWorks enabled on-demand MPEG-1 full-motion videos to be randomly accessed on corporate Ethernet networks. Starworks was from Starlight Networks, who also pioneered live video streaming on Ethernet and via Internet Protocol over satellites with Hughes Network Systems.

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Napster, a peer-to-peer file sharing network where users could upload and download MP3 files freely, broke all music industry conventions when it launched in early 1999 out of Hull, Massachusetts. The platform was developed by Shawn and John Fanning as well as Sean Parker. The first popular video streaming site, YouTube, was founded by Steve Chen, Chad Hurley and Jawed Karim in 2005. It initially used a Flash-based player, which played MPEG-4 AVC video and AAC audio, but now defaults to HTML5 video. Increasing consumer demand for live streaming has prompted YouTube to implement a new live streaming service to users. The company currently also offers a link returning the available connection speed of the user. In June 1999 Apple also introduced a streaming media format in its QuickTime4 application.

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It was followed by more popular DCT-based video coding standards, most notably MPEG video formats from 1991 onwards. Attempts to display media on computers date back to the earliest days of computing in the mid-20th century. However, little progress was made for several decades, primarily due to the high cost and limited capabilities of computer hardware.

It was first done by Starlight Networks for video streaming and Real Networks for audio streaming. Such video had previously been referred to by the misnomer "store and forward video." The band Severe Tire Damage was the first group to perform live on the Internet. On June 24, 1993, the band was playing a gig at Xerox PARC while elsewhere in the building, scientists were discussing new technology for broadcasting on the Internet using multicasting. As proof of PARC’s technology, the band’s performance was broadcast and could be seen live in Australia and elsewhere. The DCT algorithm formed the basis for the first practical video coding format, H.261, in 1988.

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