Video Compression Players Should ‘Compress’ the Hype

Revised: Jan. 21st
Editors Note: Due to an error in edits, the name ON2 was mentioned in the wrong section of the article. This version corrects the error.

2006 has begun with plenty of excitement in all matters related to digital video: mobile video, IPTV, HDTV, DVR, video-on-demand, and on and on, ad nauseum. It’s as if the entire media industrysuddenly woke up to the fact that digital and IP technologies enable the delivery of video content to virtually any display-laden device. But delivering these new forms of video experience overtoday’s networks means putting incredible pressure on the pipe. Even US cable operators, who spent $100 billion on plant upgrades in the last decade, are looking at ways to boost their efficienciesin order to deliver these new bandwidth-intensive services in a high-quality fashion. Among the options being considered is the use of new video compression technologies.

The appeal of video compression solutions is obvious: operators can deliver more and better quality video services over bandwidth-restricted systems. And, in principle, one would expect that the mostefficient and highest-quality video compression technology would win out in a competitive marketplace. In reality, however, this is unlikely to be the case. As the street literati would say, “In yourdreams!”

I’ll take two angles on this topic, the first being video compression technology itself. Advances in computing power made possible and practical the application of smarter and more complexprocessing, which in turn reduced the amount of information that needs to be transmitted in order to successfully reconstruct video. While it is true that higher compression algorithms existed beforetheir application became practical, today’s technologies have enabled such application.

Today’s video compression landscape continues to be dominated by (pixel block) motion-based compressions such as MPEG1, MPEG2, WMV, and H.264. As more powerful processors become available, futureadvances in compression technology will likely include:

Improvements based on existing principles (that is, MPEG-like in nature);
Novel approaches (for example, wavelets, fractals, and autosophy);
“Intelligent” object identification (for example, game-like picture synthesis); and
Source-channel coding (such as video compression for specific mediums like DSL).
Yes, there is exciting work being done in the video compression space, work driven primarily by the high ROI potential uniquely afforded such solutions: Euclid, Blaze, Qbit (lossless) to name a few.However, the promise of fortune and fame has also led to “snake oil” posturing on the part of many players, some of which are spouting exaggerated and erroneous claims. This is not to say thatvaliant marketing efforts should be confused with puffery, but there is no doubt that the amount of hype surrounding these solutions has created a general mood of skepticism.

A quick guide to evaluating the hype could read as follows:

The significance of improvement in compression ratios is inversely proportional to the credibility of such claims (in other words, the larger the improvement in compression claimed the more likelythe claim is to be bogus);
A press release about a controlled demo does not constitute proof of principle; and
Protecting intellectual property is not a good excuse for avoiding independent testing.
My second angle is fairly straightforward and commonsensical: even the most impressive of innovations is not guaranteed market success. Sadly, success is mostly determined by the product’s relationto relevant business environment and human condition. If there are too many entrenched competitors (even though they offer inferior technologies), or if consumers do not perceive a need for thesolution (even if the engineering team believes otherwise), the chances of market success are minimal.

Video compression technologies that enjoy a strong market presence were created through massive collaboration (that is, standards bodies) or adopted by majority of industry players (that is, achievedconsensus). Neither of these accomplishments comes easy or without significant expense, implying accurately that those best positioned to win out in such efforts are larger, well-funded players whomay not necessarily be pushing the superior technology.

And there are legitimate reasons why this continues to be the case:

Global adoption enables diverse competition and the benefits of commoditization; and
A licensing pool with many participants tends to result in more favorable and reliable licensing deals (as compared to single-technology licensor).
Of course, the ultimate arbiters of new video compression technologies are device manufacturers and content owners, neither of which will risk their rather large revenue base on unproventechnologies. Even if a new compression technology qualifies as “revolutionary,” its adoption would cost its owners a fortune in time and resources to push through the channels. Case in point: it hastaken Microsoft years of effort and hundreds of millions of dollars to get WMV “almost adopted.” (while ON2 hangs to a limited market).

Then, there is question of timing. Large capital investments are already flowing into H.264 and WMV based systems, meaning that investors are highly unlikely to approve a huge write-off in order toswitch to a “somewhat better” solution. In a few years, perhaps, but not today – it just doesn’t make sense.

On the other hand, incremental improvements on existing technologies have a much better chance of success. There is plenty of room for innovation, including improved transmission algorithms, moreefficient encoding, improved scalability, and support for multimedia-based systems (not just video) to name a few. There are plenty of lucrative niches for radically different technologies and small,agile startups – that said, do not expect new video compression solutions to sweep the world overnight.

About The Diffusion Group (TDG) –
The Diffusion Group is a strategic research and consulting firm focused on the new media and digital home markets. Using a unique blend of consumer insights, executive-level consultants, and hands-ontechnical experts, we produce more than just research – we create Intelligence in Action?.

TDG is committed to providing market research and strategic consulting services based on conservative, real-world analysis and forecasts grounded in consumer research.

For more information about The Diffusion Group, visit our website at

The views expressed here are solely those of the author and do not reflect the beliefs of Digital Trends.


Swapping an iPhone for a BlackBerry made me appreciate the physical keyboard

BlackBerry is preparing to release the BlackBerry KeyTwo, a new phone with a physical keyboard. If you've never used one, and are a touchscreen typist, what would it be like to swap? We changed our iPhone to a BlackBerry KeyOne to find out.
Product Review

'Battle for Azeroth' lets you play Warcraft without canceling evening plans

‘Battle for Azeroth’ promises to put you in the middle of a new war between the Alliance and Horde. The plot too quickly unravels into dull fetch quests, but the game’s variety keeps you itching to log in it even as the story…
Emerging Tech

The best drone photos from around the world

Most of today's drones come equipped with high-end cameras, which are quickly revolutionizing the world of aerial photography as we know it. Here are some of the best drone photos from around the world.
Emerging Tech

Watch as a ‘lifeguard drone’ rescues a swimmer struggling at sea

These days, drones are finding a range of roles in a myriad of fields. Lifeguards, for example, are making use of the drone's ability to quickly deploy flotation devices while also offering an eye in the sky to survey the scene.

Here is our ‘World of Warcraft: Battle for Azeroth’ leveling guide

This 'World of Warcraft: Battle for Azeroth' leveling guide will help you quickly rise from level to the new expansion's maximum of 120. Most of these tips work even for new players who've never touched the game before.
Smart Home

4 reasons my love affair with Amazon is fizzling

I used to be an avid Amazon shopper. But some things have happened recently that’s made me question my loyalty to the retail giant. And to be honest, I’m not sure if I can trust them any longer.

iOS 12 is more evidence you should buy an iPhone, not an Android phone

The next version of Apple’s mobile operating system, iOS 12, will be compatible with devices all the way back to 2013’s iPhone 5S. Android phones from the same era didn’t even see 2016’s software update. It’s further evidence you…

Can we get an apology? Two big MacBook fails that Apple should fix at WWDC

WWDC is just around the corner, but if you're hoping for a new MacBook Pro, don't hold your breath. Even though it'll probably only be a CPU bump, there are two significant problems with the current MacBook Pro that have been ignored for…
Smart Home

Is Apple showing up late to the smart home party, or just not coming?

Apple’s WWDC 2018 featured a lot of little announcements, but what was largely missing was news on the smart home front. Is Amazon planning on being late to the smart home party, or are they planning on attending at all?

5 obviously stupid iPhone problems that iOS 12 doesn’t even try to fix

At WWDC 2018, Apple took the wraps off the latest version of its iOS operating system. iOS 12 introduces quite a bit of changes -- visually and under the hood -- but there are still some basics that it doesn’t address. Here are a few of…
Health & Fitness

Ugh. I’m done with fitness trackers, and so is the world

In 2016, everyone was tracking their fitness. In 2017, people grew tired of it. In 2018, I’m done with it. I’m going tracker-free in my workouts from now on.

MacOS Mojave brings evening elegance to your Mac experience

The MacOS Mojave public beta is out now, with an official release coming later this fall. Chock-full of quality-of-life upgrades, we took it for a test drive to get a sneak peek at what you can expect from the next major update to MacOS…

Google might be planning a game console. That doesn’t mean it will happen

A new report suggests that Google is working on a game console, code-named Yeti. The reports about Google's game console are likely true, but that doesn't mean we will ever see it.
Home Theater

Why I still won’t wear wireless headphones

Wireless headphones promise liberation from cords, tangles, and snags, but there’s just one issue holding them back: battery life. And until manufacturers figure it out, sales numbers prove consumers aren’t yet biting.