Goodbye to the Video Store (continued 5/5)

DivXNetworks, founded recently by Mr Rota and Mr Greenhall to take advantage of the codec's grassroots success, has raised $11.6m in these difficult times for venture capital. Its latest codec, DivX 5.0, is said to be particularly good at preventing “tearing”, a playback error that occurs when the software cannot “render” the video for display at the same pace that it is being decompressed and fed into the media player. The overload appears as a frayed line across the middle of the frame. Similar to VP5, DivX 5.0 massages the decompressed video to prevent tearing, dropped frames and other glitches.

According to Mr Prakesh, the Pulsent codec identifies objects on the screen as unique entities. Whereas block-based compression and object-oriented codecs slice up backgrounds and foregrounds into grids, the Pulsent approach actually pinpoints real-world items in the frame—such as a person, tree or building—and processes each element separately to optimise the playback's performance. Mr Prakesh believes that his firm's codec will revolutionise video compression—so much so that he is pumping money into the development of a chip that can encode and decode files in real-time using the Pulsent algorithms. The aim is to get the chip into set-top boxes for video-on-demand services.

It is difficult to verify Pulsent's claims. Experts and rivals are curious but tentative. It is still too early to know which codecs will endure. At this stage, the strategy for most is to get their product into the marketplace and build their brand. That is not the case with Emmett Plant, a 25-year-old former Unix engineer who heads a non-profit organisation called Xiph.org Foundation that is developing open-source solutions for multimedia. Mr Plant surveys the codec scramble from above the fray. Surviving mostly on donations, Xiph.org is developing an open-source video codec called Tarkin. What really defines the success of a codec, Mr Plant believes, is its ease of use, adaptability and popularity. He argues that the average consumer wants something that looks and sounds good, and does not care how the film is compressed.

Mr Plant compares Tarkin to Linux, the open-source operating system that has revitalised the Unix community and become a serious alternative to Windows. Linux got a foothold among computer-science students, who were looking for a cheap way to learn programming and downloaded the free operating system. Later, as companies recruited the students as software engineers, Linux infiltrated the corporate world and took over many of the more important server duties there.

Xiph.org sees Tarkin following a similar path. The idea is that as more and more programmers download the codec for use in video playback devices, they will make continual improvements to its freely accessible software. Mr Plant contends that an open-source project such as Tarkin is more likely than a commercial project to produce a high-quality codec, because the motivation behind such volunteer groups is not profit but performance.

Whether Tarkin—or any other new codec technology—succeeds will depend not only on the ingenuity of mathematicians devising the new algorithms for compressing video data and the talents of the marketing people who are seeking to build the brand. Equally important will be getting the backing of those who control the means of delivery: the cable companies. Without a conduit into the home, content providers are stymied. Most cable operators have already made big investments to add digital cable and high-speed Internet services to their networks. Providing for video-on-demand means spending millions more.

Fortunately, a short cut is in development at CableLabs, an industry R&D consortium that includes AOL Time Warner, AT&T Broadband, and Comcast. The project, known as OpenCable, will establish a cable transmission standard analogous to the Internet protocol that will allow set-top boxes from any manufacturer to work with any cable system and swap movies, games and multimedia content. The devices would incorporate an array of features, including Internet capabilities and browsing software, to make possible video-on-demand services. Avoiding music's mistakes.

But first, content creators must agree on a method to encode their content for Internet delivery. At present, nobody is sure what form that will take. Will there be one principal codec, such as VP5, MPEG- 4 or DivX, handling content and powering the majority of set-top boxes? Or will there be an array of codecs scrunching video that is encoded in a variety of formats?

That is not important, according to Mr McIntyre. He cites KaZaA, a piece of software that allows enthusiasts to swap video content over the Internet in a Napster-like fashion but even more anonymously. Already, 62m users have downloaded the KaZaA software. At any given moment, some 800,000 people are said to be sharing media files this way. As high as they are, those numbers will be minuscule, declares Mr McIntyre, if Hollywood and others waste any more time quibbling over formats, or fretting over copyright infringements.

In May, KaZaA announced that it would have to shut its doors because it could not find the cash to defend itself against the barrage of lawsuits filed by the studios. Will big media ever learn? When Napster went down, Morpheus, LimeWire and Audiogalaxy quickly filled its shoes. Consumer demand for content is not going to wait for the studios to sort out their gripes. Even if KaZaA disappears, its success proves that very soon video codecs will do for movies what MP3 did for music. Then it will be too late to persuade consumers to pay for a service they can get for nothing.