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An End to the Wild West: It's Time for Streaming Standards!
Enough with the codec confusion. The online video space won't really thrive until industry standards are put in place and enforced by the government.
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[Editor's Note: This is a corrected version of a column that ran in the June 2016 issue of Streaming Media magazine called "It's Time for Streaming Standards." The original article identified MPEG LA as the sole administrator of HEVC royalties; in fact, there are two current patent pools, MPEG LA and HEVC Advance. MPEG LA's royalties are less expensive than HEVC Advance's, and MPEG LA's HEVC license includes no royalties for HEVC content; HEVC Advance does. The original article also identified MPEG LA as a standards body, which was incorrect.]

If this year’s Streaming Media East conference in New York showed me anything, it’s that our industry is at a crossroads. The decisions made in the next 6 to 12 months will determine whether OTT will ever truly challenge—maybe even supplant—broadcast or be relegated to second best. (It would be a successful second best, but second best nonetheless.)

In short, it’s time for the streaming media industry to seriously consider the question of whether it needs to devise and adopt standards, not unlike the standards under which the broadcast and cable industries have operated for decades. The very notion of standards rubs many in our industry the wrong way. It doesn’t jibe well with the internet startup ethos that values independent entrepreneurship above all else. Industrywide or, worse yet, government-imposed standards, so the thinking goes, would stifle innovation and create a disincentive for new companies with new ideas to enter and grow in the space.

While there’s an element of truth in that argument, it’s based on the premise that innovation and new technology development is a desirable goal in and of itself. For a Silicon Valley entrepreneur or a venture capital investor, that may be the case. I’d also argue that there’s more than a little bit of romanticizing going on behind that thinking, fueled by visions of “unicorns” (startups with valuations of more than $1 billion), acquisitions, and IPOs, rather than an understanding of what’s best for the OTT industry as a whole. Not to mention what’s best for consumers.

Not all the opposition to standards is philosophical, or even political. Our own Jan Ozer wrote a column in this issue called “The Decline of the Standards-Based Codec—and Good Riddance,” in which he points out that H.264 succeeded not because it was a standard, but because Adobe selected it for Flash Video. As Flash Video took hold, so did H.264. HEVC/H.265, the next-generation codec, offers quality and efficiency improvements over H.264. Known annual HEVC/H.265 encoder/decoder royalties are onerous compared to H.264, with some IP owners undeclared, and HEVC content royalties (licensed via HEVC Advance) are higher than those charged for H.264. VP9 is free to use, and the Alliance for Open Media (an industry consortium counting Amazon, Cisco, Google, Intel, Mozilla, Microsoft, Netflix, and NVIDIA among its members) supports the AV1 codec (also free), so there’s little technical or quality justification to use HEVC. Meanwhile, there’s plenty of financial incentive to use VP9 and then AV1.

While Ozer doesn’t object to standards on principle, he does object to standards when they bind content producers and owners to an inferior or more expensive technology. But, as Jason Thibeault points out in his Future in Focus column, when an industry doesn’t agree on standards, we’re left with a Wild West in which various technologies and services don’t necessarily work well with other technologies and services. This means OTT services must either cobble together disparate parts and figure out how to make them work together, or they must work with a single “all-in-one” vendor whose services might not all be best-of-breed or the right choice for your specific situation.

Broadcast and cable providers all operate under a set of industry standards, some of which are monitored and enforced by the Federal Communications Commission. Without those standards, consumers wouldn’t be able to count on their TVs and set-top boxes working simply by turning them on.

If the streaming media industry wants that same experience for OTT content, then the only answer is standards. Right now, the Streaming Video Alliance—comprising more than 40 companies representing every piece of the online video ecosystem—is working on best practices. It has already issued guidelines for open caching systems and quality of experience, and working groups in the SVA are tackling content protection, ad insertion, audience measurement, and more. But only if those best practices and guidelines become standards, which are then regulated and enforced by government bodies, will OTT achieve its true potential.

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