OPINION: High-def tortoise and the hare

By Paul Sweeting -- Video Business, 11/16/2007

The timing of the two announcements, though coincidental, was fitting.

While the two warring hardware camps lurch through another inconclusive fourth-quarter, keeping befuddled consumers on the sidelines, high-definition video is starting to find its way onto the Internet as technology providers begin to piece together the necessary infrastructure.

Late last month, Akamai Technologies, a leading content distribution network service, announced the beta launch of The HDWeb, a “proof-of-concept” portal that showcases high-def content from the BBC, CBS, Gannett, MTV Networks, the NBA and others.

“Akamai's goal is to provide high-bandwidth consumers with a superior online [high-def] experience and highlight the content providers that are pushing the industry forward,” the company said in a press release.

The Akamai announcement came one week after Limelight Networks, another CDN provider, announced LimelightHD, a new service for delivering high-def media over the Internet.

Among Limelight’s first high-def customers are Brightcove, Fox Interactive Media and MSN Video.

Last week, Intel upped the ante further, introducing a new family of microprocessors it says will speed the availability of high-def video over the Internet.

The new chips, dubbed Penryn, contain 16 separate processors and are based on 45 nanometer technology.

In addition to packing more transistors onto the chip—up to 820 million, according to Intel—the company added a set of instructions meant to improve video compression.

The new chips will make it possible to develop a new generation of servers capable of handling higher video compression ratios than currently possible.

“Its biggest impact is high-definition video,” Intel’s chief sales and marketing officer Sean Maloney told The New York Times. “It will be highly addictive.”

HIGH-DEF VIDEO over the Internet still has a long way to go before it’s competitive with optical discs. Bandwidth is still a significant constraint.

“The typical [high-def] object will have at least three times to five times the bits as a standard video object, and it’s more expensive to move big files around than small files,” Limelight chief technology officer Mike Gordon said. High-def also “raises the stakes” in terms of consumer expectations. “Their idea of [high-def] is what they see on their HDTV set, so that’s the level of quality they expect.,” he said. “That puts even more pressure on the delivery network to minimize latency, packet loss and anything else that can affect video quality for the end user.”

Gordon doesn’t expect high-def content to be a significant factor for video over the Internet in this year or next. But he said Limelight and its competitors, along with their content partners, are anxious to start figuring it out now so that the delivery infrastructure is in place when greater bandwidth becomes available.

At $399, sales of Vudu set-tops remain tiny. The only other significant source of high-def video over the Web is Microsoft’s Xbox Live service.

But some amount of high-def video delivery over the Internet is inevitable. The purpose of developing a high-def DVD format, for content owners, was—or should have been—to preserve a viable and competitive optical disc format that could sustain the same sort of high margins as earlier forms of packaged media.

The longer the Blu-ray/HD DVD format war drags on, the more time and space the packaged-media business is leaving for high-def delivery to find other routes and for business models and consumer behavior to coalesce around alternatives to optical discs.

Technology providers seem to be using that time productively.

Paul Sweeting is editor of Content Agenda. Get more of Sweeting's analysis here.