by Charlie Oppenheimer
September 4, 2007

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This Industry Perspectives column will appear in the October/November issue of Streaming Media magazine. Click here for your free subscription. Fifteen years ago, I remember talking with colleagues about a future world of multimedia where our TVs, video disc players, computers, camcorders, and portable media players would all share video using common digital formats, media, and connections. Today, we’re finally at a point where we can see the pieces coming together to form a naturally expanding ecosystem based on a common digital video encoding format: H.264.

The Benefits of a Common Format
A common encoding format enables content created for one type of device to be easily delivered or adapted to another. A standard open format drives competition and reduces the cost of devices, thereby expanding the addressable market in a virtuous cycle. With a common format, consumers and businesses are encouraged to create and share more media, knowing that broad distribution and consumption is possible. Because of this, consumers, media companies, and vendors alike all benefit from increased growth, innovation, and choice.

Cross-Platform Support is Critical
Media companies only wish to support formats that are accessible by any potential viewer, regardless of which playback platform the viewer has chosen. This offers them the largest potential audience. For this reason, media companies seek consistent cross-platform support.

Adobe Flash Video—which has been a critical enabler in the explosion of video on the web—exemplifies strong cross-platform support. I believe that Adobe’s consistent high-quality implementation of Flash Video on both Windows and Macs is a key reason for Flash Video’s near-ubiquitous adoption by web video sites. In contrast, I believe that the limited-effort cross platform support that Microsoft gives to Windows Media on Mac and Apple gives to QuickTime on Windows is the reason these formats have not achieved similar adoption by video providers.

However, in an all-digital world, cross-platform support means more than just the PC. For video in particular, there is great need to also include TVs, set-top-boxes, game consoles, mobile devices, and portable media players. Video content is the biggest driver of consumer entertainment electronics, and so any video encoding format that is not also supported on consumer electronics devices is doomed to niche status.

Today, Adobe Flash is based on video encoding technology from On2 Technologies known as VP6. While VP6-based Flash video is a standard for the web, it’s not quite the encoding format of choice for consumer electronics devices (lack of silicon support is one reason; another is because it’s a proprietary, unpublished format) and so it cannot achieve the full vision of convergence.

But, in the last few years, a new internationally standardized encoding format known as H.264 (also known as AVC) has emerged and is poised to be a ubiquitous standard format. H.264 is already supported by many consumer electronics products, professional production tools, smartphones, wireless services, and IP set-top-boxes (STB). Most recently, Adobe announced full support for H.264 as a native format for Flash, and Google plans to transcode all of its YouTube content to H.264.

It’s the combination of H.264 standardization, support by the leading Internet players and adoption by professional and consumer products and services, all added together, that creates a safe and stable cross-platform video format for all key platforms. With support from PCs and consumer products tied together by H.264-compliant professional products and internet delivery platforms, we will see rapid innovation leading to exciting new products and services.

Standardization
The specification for H.264 was finalized by a joint committee of participants from the International Telecommunication Union and MPEG communities in May, 2003. As compared to MPEG-2 (the format of traditional digital television and DVDs), H.264 offers 2-3 times greater compression, making it much more attractive for network delivery as well as for high-definition video.

As an open, published specification, anyone can implement H.264/AVC. Licensing terms for a portfolio of essential implementation patents were announced in late 2005 by MPEG LA, and as of August 2007, nearly 350 companies had signed the license.

H.264 itself has been incorporated into many other industry standards, including both Blu-ray and HD-DVD disk standards; DVB’s digital broadcast television standard; mobile multimedia standards from 3GPP, DVB, and DMB; and even defense video applications by NATO.

Incorporated Into Many Products
The strongest evidence that H.264 will be the format of convergence is that in addition to standards body adoption and support by the internet video gorillas, H.264 is also already built into hundreds of professional and consumer products and services. Several categories of products supporting H.264 are worthy of special mention.

Silicon. For consumer electronics products, silicon support is critical for a digital video format: Unlike a PC, where there are CPU cycles to burn on complex transformations, consumer electronics products can only decode digital video with dedicated silicon. And so consumer electronics support is predicated on embedded H.264 decoders in a variety of chipset products. As it turns out, virtually all companies that offer digital video decoder silicon have been shipping H.264 products for several years now, including Ambarella, ATI, Broadcom, Conexant, Intel, nVidia, Sigma, ST Micro, TI, Thomson, and many others.

Professional Encoders. Commercial video producers naturally require the highest production quality when delivering in H.264. Professional H.264video encoders are available from scores of companies including Adobe , Apple, Ateme, Envivio, Grass Valley, Harmonic, Harris, MainConcept, Motorola, Optibase, Panasonic, Scientific Atlanta, Sony, Tandberg and Thomson.

Other Products and Services. The list below highlights other significant products and services that incorporate H.264 support.

Services
Consumer internet—Apple iTunes, Google/YouTube, Joost
HDTV—DirectTV, Dish Network, and Sky HD for HDTV
Mobile—DVB-H services throughout Europe; NTT Docomo FOMA and KDDI EZCHannel in Japan; DMB services in Korea from SK Telecome and KT; Qualcomm's MediaFlo broadcast services adopted by Verizon and AT&T in the U.S.
DVD players—Both Blu-ray and HD DVD include H.264
Game consoles—Xbox 360, Sony PS3, Sony PSP
Camcorders—AVCHD camcorders from Sony, Panasonic, Canon
Multimedia mobile phones—Apple iPhone, Nokia, Motorola, Sony-Ericsson, LG, Samsung
Portable media players—Apple video iPods, Archos, iRiver, Sony

Any Dissenters in the House?
Microsoft is one company that might offer a counterpoint to “H.264 uber alles.” VC-1, Microsoft’s published specification for what was originally Windows Media 9, is an impressive technology with certain special technical strengths. VC-1 has some notable traction: VC-1 has been endorsed as a standard in the SMPTE organization, it has peer status with H.264 in both the Blu-ray and HD-DVD standards, and it is an option in the DVB-H mobile broadcast standard.

But VC-1 has a significant practical problem: Because it is so closely associated with Microsoft, many industry players have instinctively chosen not to support it or to demote it in priority. This means that companies in the consumer video ecosystem—including Google/YouTube, Adobe, Apple, Sony and others (particularly in Asia and Europe)—are unlikely to give VC-1 much support. Moreover, other than Microsoft-designed systems, most systems that do support VC-1 also support H.264, though the converse is not true. This makes H.264 a more universal common denominator.

In contrast, because H.264 is a standard created by a coalition of industry players (including some technical leaders from Microsoft, incidentally), it is considered vendor-neutral. I would expect that over the long haul, even Microsoft will find it in their best interest to give H.264 its full support, even if only as an alternative.

Emerging Opportunities
As a serial entrepreneur, I’m always on the lookout for product and service “holes” and opportunities. With respect to H.264, here are two significant market “holes” that we’re eager to see filled:
—Open-standard content protection (DRM as a term is over-used and misused) for H.264. Certain premium content will likely need to have controls on it for some time to come. This opportunity is one that needs to be addressed either by the open source community, by a standards body, or by commercial entities who have a strategic interest in making protection easily available. ISMA is one well-respected technical specification organization working in this area.
—Simple internet set-top boxes. It’s obvious that video delivered to homes ultimately needs to get to the TV, but, I think the market for $300-$500 internet set top boxes is extremely limited as is the market for PC-extension STBs. Some enterprising company or companies will make a fortune with a simple, plug-and-play, inexpensive (no more than $149), internet-connected set-top-box that supports web standards, navigation without a keyboard, and H.264. I’m betting that someone will launch such a device in time for the 2008 holiday season.

Conclusion: The Common Thread
H.264 is already supported in virtually every corner of the digital video universe. Now, with big internet players like Adobe, Google, and Apple behind it, H.264 is poised to become the format of convergence where all devices have access to an expanding universe of content available via physical media or high-speed networks. This will be a market-expanding transition leading to many exciting products and services in the near future.