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Emerging Media: Format Wars Forever

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This "Emerging Media" column first appeared in the October/November issue of Streaming Media magazine. Click here for your free subscription.

Every so often, the epic wars between standard-bearing technologists settle down and content enjoys a period of profitable peace. Before the Blu-ray/HD-DVD conflict, DVDs enjoyed a long-running stint as the undisputed, unchallenged champion for physical delivery of video. And during this time, content owners were all in clover. Consumers knew that they should rent and buy DVDs, content owners only had one product they had to produce, and consumer electronics companies could turn out DVD players for $20. Everyone was relatively happy because the entire distribution chain was simple and comprehensible.

Online video standardization has had a much more rocky road. For one thing, there was no top-down industry standardization as there had been for DVD and MPEG-2. And the fact that the online equivalent of the "DVD player" is software means that the barrier to entry is low—any company can try to introduce their own proprietary player. Because of this, it took almost a decade to shake out the standards for online video, and they're still too numerous. Although Adobe Flash Video has become the dominant platform for streaming and progressive download video, there are still three major flavors of downloadable video—Microsoft, Apple, and DivX/XviD.

But it's not just the format that needs to be standardized for content to flourish—it's the entire delivery platform. YouTube’s dominance over other similar user-generated content portals established Flash Video as the de facto format for people seeking to create and consume online streaming video. And in the downloadable video arena, Apple's iTunes has a strong chance of standardizing its version of H.264 for the entire distribution channel. The Apple TV device brings all this content to the big screen television. Left to its own devices, Apple could become Cable 2.0.

But the payoff for inventing and owning new ways to distribute content is too high to pass up, and Apple's one simple pricing scheme—no rentals, no bundles, no ad-supported video—is not enough for the varied goals of the content providers.

Thus, a new phase of online video fragmentation has begun.

Recently, NBC pulled the plug on iTunes and switched to Amazon's UnBox as its video download platform. From a consumer content portability perspective, this shift is bad. Just like Blu-ray/HD DVD, you have to choose your content based on technology lines. Want to download and watch NBC content on your TV? Hope you're an Amazon UnBox/TiVo customer. How about ABC content? Then you'd better be an iTunes/Apple TV customer. And your XBox Live account can get you a similarly incomplete catalog of content as well.

On the ad-supported front, Viacom announced that it will create dedicated video portals based on many of their individual properties, such as South Park and The Daily Show. For The Daily Show, they actually intend to provide a large online back catalog, not just the recent shows. This show-as-a-portal strategy has a lot of strengths: It's very clear which brands are creating the ad revenue, and the ads can precisely target the demographic of the show. But this is essentially de-aggregation, creating essentially one channel per show. Instead of going to one site to get all your favorite content, you go to one site for each of your favorite shows or movies.

Add to this mix the dozens of would-be internet-TV companies like Joost that aim to create aggregation portals, focusing on the "on-computer" experience and not the "on-the-go" experience, and you have a rich, exciting, and utterly unstable environment for online content distribution.

It has been said that good technology fades into the background and just works, leaving the content as all you see. And online video technology has pretty much reached that point. But it's the business models that keep shifting, and the result is that if you'd prefer to get your content online, you can't just change channels. You still have to hop through dozens of different websites, download different media players, and deal with several different payment schemes (subscription, transactional, and ad-supported) depending on the shows that interest you.

It makes one long for simple, civilized wars like VHS vs. Betamax or Blu-ray vs. HD DVD. Two standards battle it out, and in the absence of a truce, may the best format win. Then everyone will know what cartridge or disk they're supposed to sell and buy.

But in this quagmire of online content, the video format wars never seem to end.

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