Although MPEG-4 was set as a standard years ago, still-unresolved licensing negotiations have held the technology back, leading to criticisms that its core technology, including its video formats, are out of date. Microsoft, for one, has consistently used that argument in refusing to endorse a standards-based approach in the development of its Windows Media multimedia technology. "The video quality of MPEG-4 is far from state-of-the-art, to put it mildly," said Jonathan Usher, group product manager of Microsoft's Digital Media Division, claiming that Microsoft's recently released Windows Media Series 9 product is twice as efficient. While Microsoft continues to back proprietary technology, it is not ignoring the new H.264 format, or codec, having won an appointment for one of its own as chairman of the codec's development oversight committee. Usher tipped his hat to the compression power of H.264 as an "improvement" over ASP, but said the increased processing demands could make it less competitive in certain applications. "It's about more than just the compression," he said. "It's about balancing compression with demands placed on the chip to crunch code." Kevin Oerton, vice president of marketing at Waterloo, Ontario-based MPEG-4 software developer VideoLocus, countered that the H.264 format is still in development but appears to have struck a workable balance between compression and computational demands on the chip. "H.264 requires about three to four times the computing horsepower of MPEG-2," he said. "But MPEG-2 is now trivial for most chips. All of the video standards have been defined in terms of Moore's Law. H.264 lives up from a semiconductor cost-analysis perspective." Moore's Law, set by Intel co-founder Gordon Moore in 1965, predicted that computing power would effectively double every 18 months. Like its predecessors MPEG-1 and MPEG-2, the standard includes a broad range of audio and video technologies that allow a wide variety of different applications, online and offline. The best-known feature of those previous generations was the MP3 (or MPEG-1, Layer 3) music technology, which accidentally became a household name because of the spectacular success of the Napster music-swapping service. MPEG-2 provided the technical standard for most digital cable set-top boxes and for DVDs. The numbers then skip--there is no MPEG-3 standard. MPEG-4, ratified as a standard by the Moving Picture Experts Group in 1999, has enough different pieces to keep video-technology junkies happy for years. It is able, for example, to crunch massive video files into pieces small enough to send over mobile networks. Backers tout it as one potential "killer app" for the fast mobile phone networks that will be built over the next few years and will desperately need new applications that can generate revenue. It also includes file formats and other elements aimed at making video function almost like a Web page, allowing people to interact with the picture on the screen or to manipulate individual elements in real time. Features envisioned include the addition of e-commerce capabilities, allowing viewers to click on an item in a movie to call up product and ordering information. Compression technology, which is just one element in this mix, is nevertheless key to putting the standard to use in marketable products. Video compression essentially squeezes the size of a file by pulling out data that is not likely to be noticed by the viewer when the clip is played. The ability to give video itself the kind of interactivity that only Web sites and video games now enjoy has ignited the imaginations of advertisers and some Hollywood studios, and helped drive broad support from digital video developers. Relative newcomers such as Envivio and iVast have released products based on MPEG-4, while Apple Computer has made it the cornerstone of its latest generation QuickTime 6 multimedia software. RealNetworks has also agreed to support the format, offering an MPEG-4 plug-in from Envivio while it works to create native support in a pending version of its technology. Licensing protests
The growing endorsement of the standard was almost derailed earlier this year when MPEG LA proposed preliminary licensing terms for the technology after years of negotiations with rights holders. The agreement sparked widespread protest for its terms, which included a hotly contested per minute coding fee. The licensing terms were ultimately revised, but the experience has done little to inspire confidence that the group will be able to avoid future licensing impasses as the standard evolves and adopts new technology such as H.264. Lawrence Horn, MPEG LA's vice president of licensing and business development, said the group has learned from the past and hopes to make the next licensing rounds as painless as possible. "Although some people may criticize the process for not moving fast enough, we plan to be more proactive," he said, noting that the group has already begun the process of vetting potential patents for H.264 in advance of its expected ratification this year. Horn said the group does not disclose companies or patents that have been submitted for consideration in the licensing pool. Jonathan Fram, chief executive of MPEG-4 software developer Envivio, said his company has seen no sign that big potential MPEG-4 customers are staying on the sidelines because of the pending H.264 upgrade. He said the company has already signed up some 50 customers, including the National Film Board of Canada, although he said the market is more receptive in Asia and Europe than in North America, where cable companies heavily invested in MPEG-2 technology are dominant. He said telecom companies hoping to compete with cable and satellite companies in video-on-demand delivery are showing strong interest in MPEG-4 now. "No one is waiting," he said. "We can enable (telecom companies) to compete today." Microsoft for now appears to be a bigger threat to MPEG-4 in the marketplace than cannibalization from within through H.264. On Wednesday, the software giant's Korean subsidiary announced a deal to provide Windows Media 9 to Korea Telecom, South Korea's biggest telephone company, to support video-on-demand and wireless movie delivery to some 4.4 million customers. If that's a sign of things to come, MPEG-4 buyers may not have the luxury of waiting until the new codec arrives. "It's like buying a computer," said MPEG's Koenen. "You can always wait until something better comes along...but MPEG-4 is already a great proposition today."
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