The Real Cost Of Licensing H.264: Pricing And Licensing Terms

Whenever StreamingMedia.com publishes an article on the subject of H.264, I get a lot of e-mails from readers saying that the licensing costs of H.264 are too expensive or are just too complex to even figure out. Those who sell proprietary codecs use the perception of H.264 licensing as a labyrinthian ordeal as an ideal marketing tool to complement the proprietary technology's "simple" license.

So what does H.264 cost to license? And is the licensing cost as complex to figure out as competitors make it out to be? To help clear up a lot of the confusion, StreamingMedia.com has just published an article by Tim Siglin about H.264 licensing costs breaking out the real numbers and how the different licenses are calculated. If you've always wanted to know the costs and licensing terms, this is a great article to read.

NFL Launches "Game Rewind", Every Game On-Demand In HD With No Commercials

Today, the NFL launched a new video on-demand service called Game Rewind that lets you watch every NFL game in HD quality, with no commercials. The service, which costs $19.99 for the season or $4.99 for a week pass, also provides DVR functionality and lets you watch up to four games at once. While it is not known exactly how quickly games are made available after they end, for now the NFL is saying within 24 hours, but it is expected times will be much shorter.

The NFL is using Move Networks for the service, which is the same technology partner used for the NFL's live video service called GamePass HD, available to those outside the U.S. As expected, the quality of video for Game Rewind is amazing and the NFL kept the interface clean and simple. While you can see a demo of the service at NFL.com/gamerewind, the interface I got through an actual account looks a little different. You have the option of just watching the game with no additional content, or including things like stats and chatting with others during the game or watch up to four games at once. Initial buffering times took about a second for me on my Mac, in Safari and I experienced no stuttering at all getting the 2.4MB stream.

While it's not ideal that the NFL would charge for games on-demand, at twenty bucks a year, it's very affordable and by providing HD quality and no commercials of any kind, I'd throw down twenty dollars for it. I'd prefer to see the NFL offer this kind of on-demand video with this kind of quality, for free, but with online video monetization models being what they are today, you can't fault them for charging viewers. With the NFL now providing this kind of video quality for two out of their three online video services, I hope the games they broadcast on Sunday night in conjunction with NBC start getting the HD treatment, or least encoded into a much higher video quality.

Click on the image on the left to see what fullscreen looks like on my 15" MacBook. Keep in mind, the camera does not show how good the quality is, but it gives you an idea.

Related:

- NFL Offers HD, Full-Screen Streaming, But Only Outside The U.S.

- NFL's Live Streaming Leaves A Lot To Be Desired: Capping Users, Poor Video Quality

- Is Adobe Paying The NFL To Use Flash?

Cisco Launches Network Based Media Processing Platform For Video

Today, Cisco announced a new media media processing platform that provides media conversion, real-time post production, editing, formatting, and network distribution capabilities for formatting video and rich media on any device. The first product now offered for this new platform is dubbed the Cisco Media Experience Engine (MXE) 3000. A rack-mount device that delivers real-time post production and processing capabilities such as watermarking, voice and video editing, text and image overlays and noise reduction for creating customized broadcast quality video experiences.

The MXE supports file-to-file transcoding only, not real-time streaming, and supports H.264, QuickTime, MPEG1, MPEG2, AVI, Windows Media, VC-1 and H.264 as input formats and spits out video for MPEG2, MPEG4, H.264, AC-3 Audio, Layer II Audio, Windows Media Proxy, MPEG1 and MPEG 2 amongst others.

While not that impressive as just a stand alone transcoding solution, the unique aspect is that the MXE allows you to do complex video editing like stitch clips to form a single contiguous clip, make graphic overlays that include the addition of title slides, captions, logo insertions, watermarking and voice overlays. The graphics feature supports Flash 8 Pro template authoring and supports Web Services and XML APIs. The system also includes a ton of monitoring functions and pre-processing options.

This product announcement should come as no surprise to anyone since Cisco is hard at work to move the entire ecosystem of video creation, transcoding and delivery to the network layer and bundle more video functionality into all of their network based systems. Once these types of solutions can start doing things like transcoding and delivery in real-time, that should be a catalyst for the industry. That being said, with the economy being what it is today, Cisco is going to have a harder time in the near-term in selling such solutions unless the customer is able to save money in the long run by using just one platform.

No word yet on what the MXE costs but I will updated the post in a few hours when I hear back. Cisco says the list price of the unit is $65k.

Silverlight Beating Flash When It Comes To DRM Protection

In an interview this week in the Wall Street Journal, Adobe's CEO said that with the recent round of layoffs, Adobe would be better focused to grow their online video business. That's good news to hear from Adobe because being at the top requires a lot of work to stay there, especially when the competition is heating up. If there is one thing Adobe needs to really work on, it's their strategy for getting content owners to use Flash for video that needs digital rights management (DRM).

To date, Microsoft is still winning the business that requires DRM. Their free PlayReady solution PlayReady server costs $30,000 but as noted in the comments below, is offered by third party hosting companies without the need for content owners to buy their own server, which is what I was trying to imply when I said it was free. The PlayReady solution supports connected playback with streaming or progressive-downloaded content and yesterday Microsoft announced another customer, BSkyB, that is using Silverlight powered by PlayReady. Other recent wins by Microsoft also include Netflix which is using Silverlight for their Watch Now service for Mac users.

Adobe on the other hand is selling a server for DRM called the Adobe Flash Media Rights Management Server with a list price at $40,000 per CPU. Since there is no SDK, as noted in the comments section, third parties can't offer the functionality as a hosted service. If that price has come down, I hope someone will let me know, but from what I can tell, it is still that expensive. Right now, content owners needs more tools and support to help protect their content and try to make a business model out of online video. It would make more sense for Adobe to give away the DRM functionality to act as an enabler for content owners to use the other pieces of their Flash video platform.

I'm sure Adobe is just trying to be compensated for the work they have done to create the DRM server, but with so few content owners willing to pay the price, Adobe could make more money in the long run by bundling the DRM functionality into one of the other Flash Media servers.

Sun Launches JavaFX To Try And Compete With Flash and Silverlight

Today, Sun officially launched JavaFX 1.0, a new development platform for building rich internet applications (RIA) for Web browsers and desktops. Sun's apparent belief is that with Java technology already being on more than 90 percent of desktops and laptops and 85 percent of mobile devices, they can give Flash and Silverlight a run for their money over time. While that sounds great on paper, I wonder how realistic Sun in being in regards to the lead-time it takes to get a new platform out into the market.

While player penetration holds some weight, as Adobe and Microsoft would tell Sun, it all comes down to getting developers to build on your platform. JavaFX is way late to the game and has quite a few limitations right from the get go. For audio and video applications, JavaFX supports On2's video codecs and On2's Flix software application is the only tool that can encode video for JavaFX. Nothing wrong with On2's codecs, but if JavaFX won't support H.264 soon; they won't get a lot of support. And with Flix being the only tool that can encode video, it puts the costs of encoding content out of the reach of many developers.

Speaking to Sun about this very issue, they did say that this is only version 1.0 and the start of an audio video framework that will support H.264 and other functionality going forward. That's good to hear but again, Adobe and Microsoft has such a head start that I wonder how many additional releases of JavaFX are needed to where developers can start to compare Sun's functionality to Adobe or Microsoft's, specific to video. Sun also mentioned that over time, their Java business model will evolve to where they are generating licensing from things like their Streamstar server. A Java based streaming server that they want to license when the demand for JavaFX video requires enterprises and content delivery networks to support the format. While I understand Sun's desire to generate revenue from a server license, ask any of the CDNs what they think about supporting yet another video delivery platform. Sun won't like the answer.

Along with the announcement, Sun also launched a new website, JavaFX.com which showcases some of the functionality of the new platform. While I really would like to see some of the video examples, they don't work. I keep getting an error message saying, "There was one error opening the page" or "Sorry! We couldn't find the document requested." When I questioned Sun on this they told me the site is getting a lot of traffic and that I should try back later. Come on. You're Sun. You launch a new platform that you want people to check out yet the site can't handle the traffic? And how much traffic can it really be getting? At the time of me publishing this post, not a single website or blog in my RSS reader, of which there is over 100, even mention the JavaFX announcement. Sun should be doing a better job with the showcase website.

While it is too early to know if developers will like some of the advantages that JavaFX has when it comes to dragging applications from the browser to Windows desktops, the real question is what are the advantage of using JavaFX as a consumer? Other than the interface and the way the viewer interacts with the content, viewers are the ones that drive the adoption of video platforms. Unless Sun can show viewers through the use of some new applications why they should want to use JavaFX over Flash or Silverlight, Sun is going to have a very hard time cracking the audio and video market.

That being said, while more platforms means additional confusion in a world of online video that already has no standards, competition tends to make companies work harder at making their solutions better. So welcome to the party Sun, but if you want to have any shot at making it, you need to be in this for the long haul and can't expect to see any big gains for years.

MLB.com's Switch To Flash Video Leaves More Questions Than Answers

Adobe got a big customer win this week when they announced that MLB.com would move from the Silverlight platform back to Flash for all their live and on-demand video. The two-year deal, which kicks off in 2009, will also see MLB providing a rich Internet application (RIA) built using Adobe AIR that will give viewers access for yet to be announced features outside of a browser. The new rich Internet application will not replace the current MLB TV Mosaic app and will be a completely new piece of software.

While there has been some speculation that Adobe may be providing MLB.com with some monetary incentive to switch back to Flash, I doubt that is the case. While similar in nature to the NFL deal, the NFL is a very different organization and has a history of feeling others should pay to be associated with their brand. Major League Baseball's Advanced Media (MLBAM) division is all about making the online video experience as easy as possible and making sure they can incorporate other forms of content outside of just video into the overall user experience.

That being said, there are quite a few interesting questions one has to ask based on this new deal, which unfortunately MLB won't answer at this time. For starters, since the majority of content delivery networks still charge more to deliver Flash streaming over Silverlight, is MLB's cost to deliver video now going up? And if it does, will it have any real impact on the cost of MLB TV? Looking at the MLB.com website, I can't find any pricing yet for the MLB TV service in 2009. Also, since the Flash Media Server can't scale as well as Windows Media in a live environment, I think a real possibility exists that MLB could move to a dual-vendor strategy for their video delivery. While Akamai has all of MLB.com's video business today, I would not be surprised if over time, some of MLB's traffic was split between Akamai and another provider.

I also wonder how moving back to Flash affects MLB's mobile based offering? Flash video does not work on many mobile devices like Blackberry's and the mobile market is one that is very important to MLB. And when it comes to DRM, Adobe has only just recently started providing a DRM solution in the market; hence folks like Netflix and others going with Silverlight, especially for Mac users. Does the new Flash DRM now restrict MLB.com in any way for videos that are purchased and downloaded to the desktop? I'm also interested in hearing if MLB.com will use On2 or H.264 for the encoding, or a combination of the two.

My initial thought is that since MLB.com has already worked with the Flash video platform in the past that a lot of this has already been worked out. But since it will have been almost a year and a half since they were offering MLB TV in Flash, quite a lot has changed with the platform. The one thing that I hope this has no impact on is the time is takes MLB.com to turn around highlights and video clips. For this past season, I was seeing Mets highlights from games in as quickly as ten minutes after they happened.

In my eyes, MLB.com has always been the leader when it comes to providing fans with a really good quality user experience actually worth paying for. I hope their switch to Flash video doesn't change any of that experience for all the various ways that fans are able to get video.

[Thanks to Beet.tv for the heads up when the news broke]

Netflix Gives Details On Their HD Quality Video Specs

As soon as Netflix started offering video content to the PC, Roku, TiVo and XBOX 360, I have been hounding them to give me details on what settings are being used for the encoding. At the risk of annoying them with too many e-mails, I'm happy to see they have agreed to make this info available and do a great job in really drilling down into the details. (thanks Steve)

While many probably think that only video "nerds" would care about the info, these are details that everyone should care about for one major reason. Quality. That word is probably used in this industry more than any other to define what type of video experience a viewer gets, yet typically there is no definition on what the word means. As more HD content becomes available, headed discussions are only going to ramp up about who is offering the best online video quality. In order to truly be able to compare one video clip to another, you must know how the clip was encoded. While two videos may look the same and have the same aspect ratio, (window size) one could be encoded with a different codec or at a higher bitrate, thereby making it impossible to compare fairly.

Knowing what bitrate, codec and settings were used in the encoding allows us to fairly and accurately compare one video offering to another. I hope other content others follow Netflix's lead and will give out the details on their encoding specs as well.

Microsoft Says Silverlight 2 Now On 100 Million PCs, Gives Details On Silverlight 3

Last night, Scott Guthrie at Microsoft posted more details on his blog about the adoption of Silverlight 2 and gave some details on new features in Silverlight 3, slated to be released next year. While I had previously heard Microsoft say 1 in 4 machines on the Internet has some form of the Silverlight player installed, this is the first time I have seen the 100 million number for consumer machines mentioned. And since that number does not include installs in the enterprise, the total number of machines that have the Silverlight player are even higher.

While 100 million sounds like a big number, many will want to compare that to the number of Flash installs that Adobe has and say that it's still small. But right now, it's still too early to compare the two. Silverlight is still new in the market and we need to wait and see what kind of growth and penetration rate Silverlight gets over the next 12-18 months before you can really compare Silverlight to Flash. As I have said in the past, Microsoft is in this platform fight for the long term and can spend the time growing their share of the market strategically and steadily. They don't need to surge ahead overnight and they have the ability to compete with Flash over time. Microsoft knows this is a race that will be won year's from now and they have time on their side.

In addition to Scott's post listing many of the new features in Silverlight 2,he also briefly talks about some of the new features coming next year in Silverlight 3 including support for H.264, 3D and GPU hardware acceleration, richer data-binding and support for additional controls.

When Microsoft releases Silverlight 3 next year, adds support for H.264 and we see video services like those from Netflix gain traction, the online video format market is really going to heat up. I'm not making any bets on who's going to eventually win, but I will say that I don't think there is ever going to be a single format the dominates the market. I think we will also have more than one major player in the format space and considering how many different kinds of video solutions are needed in the market, there is room for two major players.

Adobe's CEO Underestimating Microsoft's Ability To Compete With Flash

Comments from a meeting last week with journalists at Adobe's headquarters indicate that Adobe's CEO, Shantanu Narayen, thinks Adobe has already won the online video platform battle and that Flash can survive any threat from Microsoft. That's a dangerous assumption to make and underestimating Microsoft's ability to challenge any company, in the long run, is never a good idea.

In the article, which appears on the guardian.co.uk website, Adobe's CEO is quoted as talking about how much adoption Flash has and the penetration rate of the Flash plugin on computers around the world. While I would agree that the penetration rate is high, keep in mind that Flash has almost no penetration in areas like the enterprise vertical, a market that Windows Media still dominates. It also has literally no penetration when it comes to downloaded video to the desktop, which is dominated by Windows Media and QuickTime. And for all the talk of the Adobe Media Player (AMP), which allows you to play back downloadable video, when was the last time you saw any website offering Flash video as a download with the Adobe Media Player? While Adobe is clearly trying to push into the enterprise market and offer a platform for downloadable video, Flash has gotten almost no penetration in those markets.

And when it comes to live video, while Adobe has now made live Flash streaming stable in version 3.+ of the Flash Media Server, any CDN will tell you it does not scale as well as Windows Media and has a higher total cost of deployment than Windows Media. It does not support multicasting, that I am aware of, and the DRM capability of Flash has been very late to the game and expensive to deploy. The fact we see Netflix and others offering streaming movies for Mac users is primarily due to the DRM capabilities of Silverlight. Not to mention, in most cases, Flash video streaming is still more expensive for content owners to deliver, especially for those with a lot of traffic.

In the guardian article, Adobe's CEO was also quoted as saying, "The BBC moved over, the NFL [National Football League] went live with us using NBC. Microsoft and NBC have had a long standing relationship, but they picked us." The problem with that quote is that it's factually wrong. Yes, Microsoft and the NBC have a long standing relationship, yet they did not decide to use Flash for the NFL streaming. The NFL decided and is quoted on the record in various locations as saying they are the ones who made the decision to use Flash, not NBC. And from what various sources tell me, Adobe is helping to foot the bill to stream the NFL games. So is it really fair for Adobe's CEO to be calling out Microsoft for "opening its chequebook" in an attempt to muscle its way into the web video market when Adobe may also be helping content owners foot the bill? The fact no one from Adobe will comment or give any details, on the record about the NFL deal, speaks volumes.

No one is debating whether or not the Flash platform has tremendous penetration in certain segments of the market, it clearly does. But to go on record and say that you think Microsoft has no shot at ever competing with the Flash platform and stating that you feel you can withstand any push from Microsoft, that's a dangerous message to convey. Especially when, from what I have seen, the Flash team operates with the intelligence knowing that they always need to improve upon their product. I deal with a lot of people on the Flash team and at no time, that I can remember, do they ever talk about having Microsoft "beat" or talking down their competition. They know they have a good product that they are constantly working to improve on and aren't happy to sit around the rest because of the market penetration they already have. But when the CEO of Adobe comes out and says they have already won the online video platform battle, what message is that conveying to the rest of the company? Should the Flash team now stop working as hard to make Flash even better? It's a very dangerous tone to set.

We all remember what happened when Real's format ruled the online video industry and then Microsoft entered the market and took nearly all of Real's market share in a few short years. I'm not predicting the same thing will happen in this case to Flash, but Microsoft is going to take share from Adobe, with Silverlight, over time. Might not be next year or the year after, but Microsoft isn't playing for a short-term win. They are in this for the future and can build their platform over time, waiting until online video truly becomes a business, when content owners start making money. Enabling others to make money from online video has been Microsoft's goal from day one and one of the driving forces behind their DRM functionality in the Windows Media platform since 1999. Adobe only just started addressing DRM functionality this year. Adobe has also been very late to the HD game, something else Microsoft has been focusing on for years.

In the guardian article, Adobe's CEO is also quoted as saying, "If you look at the number of partners who are signing up [to use Flash] despite the fact that Redmond opens its chequebook and tries to get companies to move to Silverlight, we're winning." If Adobe thinks Microsoft has "opened its checkbook" and is not seeing results, think again. While many people think Microsoft throws money at everyone, they have not, as of yet. To date, Microsoft has offered up very little money to content owners, Olympics aside, and has not implemented some of the programs, like "netcredits", that Microsoft did back when it battled RealNetworks. If Microsoft were to put serious money behind Silverlight and really spend the marketing dollars it did when it took the market from Real, Adobe would be in for a serious fight. Don't underestimate Microsoft's ability to  do that again, sometime soon.

Windows Media 12 Player Has Some Surprising New Features

I was going to do a review of the Windows Media 12 player and some of it's new features, but Peter Bright over at ARS already did a detailed write up and beat me to it. So if you are interested to seeing some of the new features of the player, head on over to the ARS website and also check out the comments section in the article. There are more than forty comments by readers talking about additional features and functionality they want the player to support.