The impossible stream

Multiple formats, multiple encodes could give way to one format, one encode
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The challenge facing any company that enters the streaming-media business is getting its content ready for distribution-whether it's downloaded from media players Microsoft, Real Networks or Quicktime. Not only does the company have to deal with preparing content for different formats, but it also has to accommodate different bit rates. When it comes to streaming media, companies must be all things to all users-regardless of how content is delivered.

Unfortunately for content providers, there is no easy way around the multiple-encode dilemma. One option is to purchase a system that can automate the task. But that means making a larger capital investment. The other option is to make content available through only one player or at only one or two bit rates. But that option creates a compromise with the one player that streamers don't want to frustrate-the consumer.

Streaming content almost certainly requires media companies to convert to multiple formats, says Jeremy Schwartz, an independent consultant and former analyst for Forrester Research. However, "depending on whether they're delivering over broadband, narrowband or both-they may have multiple versions of the content within each of those formats at different bit rates," he says. "So there may be up to nine different versions of the content that have to be stored and sent down through the delivery networks."

"If a content provider chooses the Real server, it can't stream Microsoft and Apple formats from that server," says Neil McGowan, vice president of sales and marketing for Kasenna, a software spin-off of SGI that helps scale networks for broadband video. "And the same applies to the Microsoft and Apple server."

As a result, most content providers support all the players-Microsoft's Media Player, Real Network's Real Player and Apple's Quicktime-in an effort to reach as many eyeballs as possible. There are some solutions available from companies like Avid, Sonic Foundry, Pinnacle, Adobe, Kasenna, Media 100 and others that can make it easier to handle multiple bit rates from one source, but encoding for the different formats continues to be a challenge. In addition to requiring more employees to handle the encoding, it also requires more storage space on servers.

"The challenge for commercial-grade solutions goes beyond streaming," adds McGowan. "For example, you need management, security, distribution and e-commerce capabilities. Real, Microsoft and Apple are all vested in their own or third-party software relationships that are not compatible. So you could end up with each server not only streaming different formats, but also using different rights management, distribution and content-management systems. This is where companies like ours, with a horizontal platform technology, come in, because you can stream all the formats from a single server."

The Single-Server Solution

The experience at CNN.com and CNNSI.com is typical of the problems and potential solutions for media companies. Tom Gerstel, CNN.com manager of content development, says that the company added the Anystream Agility encoding platform that allows the network to take one file or tape and stream it out to many different formats and bit rates.

"They do all that legwork for us, taking the proprietary formats and accommodating them so we can encode them," he says. "But before integrating Anystream, we had three production processes for each format. And it's certainly not an impossibility that another format might come online. The notion of us having a fourth process was unthinkable, so [Anystream] brings us centralized control of our streaming resources."

As is the case for many companies, streaming is a business, and, according to Gerstel, CNN needed "enterprise-level" tools to support it. "While the individual providers give away their free tools, we didn't want to run a business on a set of free tools loosely integrated by one of our developers that did it on a project-by-project basis," he explains. "For people that are serious about streaming, I think it's a worthwhile move."

Though there are solutions to the encoding challenges posed by multiple formats, the obvious question is will there ever be standardization among the media-player manufacturers to ease the burden on the content creator and distributor? The short answer is-not today, but maybe tomorrow.

"Currently, there isn't enough demand for standardization because there aren't enough customers with broadband connections," says Jim Stroud, an analyst with the Carmel Group, a media research firm. "But in the next couple of years, as broadband becomes more widely available, I think you may see demand for some sort of standardization of content."

Stroud believes the standardization movement could start out as an independent effort by consumers with add-on support from streaming content providers. "If there was a movement, they [content providers] may jump on the bandwagon because there is some cost involved in making content compatible with all three players."

The Case for Standards

The argument for standardization is often seen as similar to one used in the early days of television-if the broadcast networks had each had their own separate broadcast standards, would television be what it is today? For the most part, the consumer on the other end of the streaming experience is fairly tech savvy. But in order for streaming to really take off, it has to become a much simpler experience.

"The issue for consumers will be the irritation of having to download the player and figuring out which one is going to become the default player," says Schwartz. "So there's a certain level of consumer irritation that comes from that. And when the consumer has to go through that process, it alienates a lot of consumers who aren't tech savvy."

But Ben Rotholtz, Real Networks general manager, products and systems, says that standardization today-with constant advances in codecs and the innovations made by companies like his with each successive generation of streaming technology-could hinder technical progress.

"In the world of television, there was a hardware decoding side and transmission pieces that had to standardize," says Rotholtz. "In the world of auto-updateable software there's a lot more fluidity than that."

There has been some discussion of MPEG-4 forming the core for a streaming standard. But Rotholtz adds that creating standards based on something like MPEG-4-with its current broad definition-defies the notion of delivering the best streaming experience. "And that would probably do more to hold back the industry than not," he adds.

However, there's no question that standardization will increasingly find itself on the radar screen of content providers and consumers as a necessary part of the streaming solution.

"Standardization has to emerge for three key reasons," says Geoff Stedman, director of strategic marketing for Preview Systems, a company that has developed a digital-rights commerce platform that works across different formats. "First, the lack of standardization makes the consumer experience complicated and unwieldy, a problem that will become more acute as the broadband universe expands beyond the techie crowd.

"Second, without standards, the market will remain highly fragmented, which limits the commercial opportunity for content providers. Ultimately that will drive the industry to standardize."

Stedman believes another factor is that PCs will become less and less the primary delivery vehicle for online content, as other connected "appliance-like" devices emerge. "This new class of devices will also help force some level of standardization," he adds.

Format vs. Content

Nobody really knows if and when consumers will become fed up with a multiple-format world, or even who will feel the brunt of that anger. For now, at least, online consumers are willing to download the player they need in order to reach the content they want. As a result, the scramble among the streaming players is to try to make exclusive deals with the right content providers. Quicktime, which lags behind in terms of the number of downloaded players, has probably had the two most-publicized deals. The first was the movie trailer for Star Wars: Phantom Menace,
and next came the trailer for Lord of the Rings.

"People want to watch the content. They don't care about the players," says Stroud. "And that's why you'll see these astronomical numbers bandied about by Microsoft and Real Networks as far as how many players have been downloaded."

While content may be king as far as attracting downloads, as pointed out in a recent Jupiter Research report on streaming video, the content provider stands on the sidelines of a server and format battle between Real Networks and Microsoft that defines the market. Even Apple, which offers Quicktime format, is pretty much out of the fray, in what Jupiter refers to as a "durable duopoly"-the current state of competition for dominance.

"Although Real Networks' server solution is more expensive [as opposed to Microsoft's free-with-NT pricing], Real Networks remains platform agnostic and maintains an edge in codec quality," according the report. "Real Networks continues to outmaneuver Microsoft's OEM distribution advantages by bundling with Microsoft platform competitors such as AOL and Netscape."

The report says that Media Metrix SoftScan numbers indicate that Windows Media Player enjoys a slightly higher distribution than Real Networks, due to bundling with Microsoft. It adds that the finding includes an older version of the Media Player, which did not support streaming video.

Everyone Suffers Without Standards

Not only is the lack of standardization among media players affecting the Internet experience, but it could also have an impact on interactive television services. With cable set-tops and other computer-like devices sitting closer to the television, there will be an opportunity to incorporate Internet content into the television viewing experience. But media player formats could stand in the way of allowing those less "tech-savvy" consumers to expand the interactive-television-viewer universe by inhibiting downloads and plug-ins.

"I think standards are going to become crucial, because it's my belief that IP video will be at the center of interactive television," says Jonathan Taplin, president and CEO of Intertainer, an interactive TV content provider. "The cable industry, as well as the DSL industry, has to look at standardizing so that we can create really rich interactive television. And the only way I see that being possible is a combination of IP, HTML and MPEG-4. So anything that helps those become more standardized is a good thing."

Taplin's company is a bit of a rebel when it comes to selecting a streaming standard, opting to use only Microsoft's Media Player. It's the rare company that is interested in streaming video content that will select only one standard. It's estimated that only about 10% of streaming content is not available on a combination of at least two of the three media players. Taplin's decision was made easy for one reason: Microsoft's Media Player offers digital-rights management, something that Apple and Real Networks don't currently offer in their encoding products.

Digital-Rights Management

"The other players are fine for people with content that they don't mind having ripped off. But for us, the crucial part is the digital-rights management," adds Taplin. "My big fear about bolting digital-rights management onto an existing player is it's easier to hack it."

Mike Aldridge, Microsoft's digital-media-division product manager, says that finding video-streaming customers like Taplin who are interested in digital-rights management is becoming increasingly easy, especially given the recent headaches experienced by the audio industry with protecting copyrighted material.

"The key content owners on the video side are being much more aggressive and proactive because they're learning lessons from the audio industry," says Aldridge. "So the decision between the players will come down to who has the most compelling set of attributes in terms of meeting the content owners' needs for a mature rights-management system. And today we have a second-generation digital-rights-management system that Real does not."

Rotholtz counters that Real hasn't lost any traction today because of its approach to digital-rights management. "We do care about DRM. But we also think there are multiple solutions, and we believe the world is a heterogeneous environment," he adds. "And the collection of technologies that make up DRM are probably heterogeneous. And flexibility is absolutely key."

The rhetoric coming from the camps can make one wonder if they ever really could get on the same page with regard to working together on a joint standard. But given the relatively small size of the current streaming market, each company believes it can become the dominant player.

The plan is pretty simple: by maintaining proprietary technology, it can offer advantages through better quality or easier functionality over competing formats. If it can convince enough content providers to exclusively use its technology, it can build a critical mass and become a de facto standard.

Creating Proprietary Standards

"They want to protect their current customer base, and the way to do that is not to open up their proprietary encoding and streaming capabilities," adds Stroud. "There may come a time when the argument becomes can the pie be larger if they standardize the equipment, compete on an even standard playing field, and enhance the standardized content? Or, should they keep it proprietary and live with players that may not be compatible with the whole content pie? That's going to be an interesting battle."

Those who discuss standardization today often invoke the MPEG-4 standard and the potential for it to eventually become part of a standard. "As streaming becomes more important across all platforms, it will be important to have a standard, and my guess is that will be some version of MPEG-4," says Taplin.

But it's important to note that when MPEG-4 is mentioned, the phrase "some version" is usually mentioned as well. Microsoft, for example, has taken MPEG-4 and improved it. However, in the process Microsoft has made it proprietary. And Quicktime, which is also working with it, wraps MPEG-4 encoded material in a wrapper that requires the Quicktime player to access it. But does the approach run counter to the concept of a standard?

"Somewhat," laughs Schwartz.

"When it comes to standard formats such as MPEG-1 and MPEG-2, these companies have implemented some Trojan horse solutions," says McGowan. "But they wrap the MPEG envelope around their formats and, in most cases, it isn't native MPEG."

But the contradiction in the media players' approach is also an indication that the companies are not comfortable with MPEG-4 in its current form. "MPEG-4 is not acceptable today, and Microsoft had to do some things to it that made it proprietary in order to force-fit it into their world, and we're of a similar mind," explains Real's Rotholtz. "One of the basic issues of MPEG-4 is trying to home in on what we mean when we say MPEG-4, because there's a definitional concern of what it means. And also, it's based on H261 which is a 16-year old standard that is not a bad standard but it's awfully old."

Rotholtz says that he believes there may be some interesting solutions around it, but that people need to understand what they're driving through. "There are enormous licensing fees associated with MPEG-4 of $6 [per stream], and that doesn't even get you past all of the potential patent infringements and hurdles associated with it," he adds.

Third-party companies like TeleStream and SGI are offering products that can help ease some of the burden of multiple encoding at multiple bit rates. SGI, for example, is introducing-at Streaming Media West-the Kasenna Media Base 4.01 product on Linux, which will join its Irix-based product. "It will allow people to do Real, Quicktime, MPEG-1 and MPEG-2 content on the Linux platform.

"As people try to enhance from the base standard to get better quality you're going to see different types of encoding being used to maximize the content quality over the narrowest band," says Louise Ledeen, SGI market development manager. "There are a number of SGI engineers involved in the MPEG-4 and MPEG-7 committees, and when you see the number of people involved in trying to drive toward a standard you certainly hope that's going to happen."

But Ledeen adds that these discussions have gone on for years, going back to JPEG. "We have to create an environment where we can address whatever the prevailing standards are, and our hope is that we can drive toward a standard that is agreed upon and excepted. And, hopefully, working together, we can come up with some that have the capability of being extensible as well as having a long life in terms of acceptance."

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