The recounting comes as Apple is aiming to thrust its media delivery formats to the forefront of Web audiences, hoping to recover ground lost to rivals during the Net's boom years. Appearances have become increasingly important to the company as it looks to become a leader on industry standards for streaming media. In recent weeks, the company has been aggressively pushing MPEG-4. According to analysts, Apple would benefit enormously if the standard is adopted and widely implemented. "When you look at this whole movement to bring high-speed bandwidth (to the Net), and as a result higher-quality video, then you push toward a place where QuickTime and its support of MPEG-4 allows Apple to be in a leadership position again," said Tim Bajarin, president of consulting firm Creative Strategies. Though the company was the first to introduce media technology for the desktop, Apple's QuickTime fell behind in the late '90s amid tough financial times and a management shakeup at the computer maker, Bajarin said. At the same time, RealNetworks capitalised on the mushrooming Net economy, becoming the front-runner in offering consumers a video and audio player for the Web and selling content publishers the servers to compress those files. Microsoft also seized the opportunity to piggyback media services onto its server business and quickly gained significant market share. The Web traffic numbers illustrate the race. Nielsen/NetRatings' report for December 2001 showed that QuickTime reached about 7.4 million people at home, or 7 percent of the Internet population, and 5.5 million at work, or nearly 14 percent of the Web universe. By contrast, RealNetworks reached some 32 million at-home users, or nearly 31 percent of the Web population, and 16.3 million at work, for almost 41 percent share. Windows Media hit 14.6 million at home, for about 14 percent reach, and 9.9 million at work, for about 25 percent reach. Those numbers were calculated by looking at the file types accessed rather than the players used to access them. Under this method, each ".mov" file scored a hit for Apple; ".ram" counted toward RealNetworks' total; and ".asf" went to Microsoft. While this method had simplicity on its side, it created distortions, Apple engineers argued. For example, RealNetworks typically uses several background and supportive files along with the main media file, leading to over-counting for its results. Under the new method, these files are no longer included. Nielsen/NetRatings bases Internet media player usage on so-called streaming media, where video and audio are delivered in real time, as well as on downloads, where consumers first retrieve a file from the Internet and access it later from the desktop. The distinction between streaming and downloads has blurred with the introduction of high-speed Net access, but streaming has remained popular among copyright owners, partly because it gives them greater control over their content. The statistics firm's new report will also break down audio and video streaming vs animation and images -- a change from previous reports. But the report only tracks the proprietary players and not industry-standard files such as MP3 or SMIL -- a factor that hurts companies that support them, such as Apple and RealNetworks. Eventually Nielsen/NetRatings plans to track nonproprietary formats as well, Mak said. RealNetworks would not comment on an early release of Nielsen/NetRatings numbers. But a representative said the company remains the streaming media leader despite any changes to Nielsen/NetRatings' methodology. "They changed the way they count," said Steven Banfield, RealNetworks vice president of strategic relations. "We've been in a leadership position, we continue to be in a leadership position...and we continue to innovate in the marketplace. From our standpoint, we leave decisions about how they want to count these things up to them." Any way you paint the picture, Apple has disputed the veracity of the Web numbers for years, claiming its technology is used more widely than Web researchers have given it credit for. Despite the player numbers, Apple cites a search on HotBot that depicts Apple with a greater share. A search for ".mov" files finds about 224,000 sites, while a search for ".ram" files (for RealNetworks) pulls up about 90,000 sites, and ".asf" for Windows Media products about 63,000 sites. Phil Schiller, senior vice president of worldwide product marketing for Apple, said the streaming media numbers are inherently flawed for a host of reasons. In one example, Nielsen counts proprietary formats but not MP3, the de facto standard for Internet audio. In the past year alone, he said, QuickTime 5 was downloaded 100 million times, suggesting it has a much bigger share than has been typically reported by the major Web metrics companies. "A whole bunch of content gets discounted," Schiller said. "At Apple we have been promoting that people use open standards more and more, but those standards often are the things not counted in these market records. The more you dig into anybody's counting the more you find limitations in what they count." RealNetworks claims some 270 million registered unique users for its RealOne and RealPlayer products. Microsoft's Windows Media player comes bundled with its Windows operating system, which runs 90 percent of the world's PCs. With a larger acknowledged footprint in the streaming media landscape, Apple could gain additional credibility and give greater weight to its calls for adoption of a video and audio standard. With QuickTime 6, Apple has given its full support to the latest specifications endorsed by the Moving Pictures Engineering Group, dubbed MPEG-4. MPEG-4, like its predecessor MPEG-2, is expected to foster the burgeoning industry of interactive video in a host of devices such as set-top boxes, DVD players and PCs. The video and audio compression format delivers the same video quality of that of MPEG-2, the standard for DVD players, but at half the bit rate. With the bandwidth savings, industry supporters expect it to deliver a wide range of plusses, including making possible interactivity and e-commerce. By supporting MPEG-4 with QuickTime, Apple is poised to get greater buy-in on the Web because of its influence with content authoring world already using its suite of video editing tools. The MPEG-4 standard already seems to be gathering steam. RealNetworks has said that it will support MPEG-4, and other systems such as iVast also support it. But Microsoft has yet to announce that it will support it in its next-generation media system, Corona, due out in public beta in late summer. One last hitch to the release of QuickTime 6 has been the absence of a licensing fee plan with MPEG-LA, the patent holders of the newest standard. But Apple seems confident that a reasonable agreement will happen before QuickTime's official release in late summer. In the end, Schiller said, the numbers are fairly meaningless because consumers rarely consider which player they use. The MPEG-4 standard, he said, will be the key to opening a marketplace in which consumers have improved options. "We're not proposing an open standard because we want to improve our position to the other players. We are creating a healthier marketplace for all of the players in this marketplace," he said. "We hope with an open marketplace, customers will have the choice of choosing our products."
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