Commentary: Pieces of (VP)8

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IBC 2008, held in Amsterdam this past week, provided lots of interesting news. Just like its United States counterpart, the National Association of Broadcaster (NAB) show held each April, many major companies, from Adobe to Microsoft, made major, potentially game-changing announcements or pre-announcements.

None of our coverage of IBC 2008 has garnered more readership—and anonymous reader response—than the column titled "H.264 Wins: Now What?" First published in the inaugural European version of Streaming Media magazine and made available at both IBC and the upcoming Streaming Media Europe show (October 16-17 in London), the original version of the article started with this line:

"You are probably reading this column around the time of the international broadcasting show in Amsterdam known as IBC 2008, and close to the time that the Streaming Media Europe 2008 show takes place in London. If this is your first issue of the magazine, we'd like to welcome you - and salute the progress that streaming media is making throughout Europe."

The article was written in early June and revised a bit in July, just before it went to press. It noted that, while H.264 appears to be dominating, there are still other formats out there:

"Microsoft has VC-1, which is a U.S. SMPTE (Society of Motion Picture and Television Engineers) standard," the article stated, "and On2 Technologies has VP6 (in both the Simplified and Enhanced versions). But even these two powerhouses are embracing H.264: Microsoft's IIS 7 server component supports H.264, while On2 owns Hantro, a European company that uses H.264 for embedded video delivery. There are more announcements to come from both of these players, one suspects, as the H.264 common format juggernaut continues to role forward."

H.264 vs. VP6
I was well-versed in the H.264 versus VP6 comparison, having authored a white paper in December 2007, called Flash Video Codec Comparison, that On2 made available on its website in early July 2008. Around the same July time, Jan Ozer also wrote a piece for StreamingMedia.com conjecturing on the "what if?" scenario of Microsoft implementing H.264 in Silverlight; to Jan's credit, he saw the writing on the wall. While Jan and I might disagree on some of the basic issues of high-defininition versus standard-definition content—such as the fact that the white paper shows that HD-acquired content makes better, lower-bitrate SD streaming content—Jan pegged the benefits of H.264 to Microsoft H.264 squarely.

On the first day of IBC, Microsoft announced support of H.264 playback in Silverlight, our editor asked me to include the new Microsoft information in an electronic version of the print story, and then published "H.264 Wins" to the StreamingMedia.com website.

Almost immediately, emails began to stream in questioning the "winning" comment. Reasoned responses, like VBrick's Rich Mavrogeanes' comment on the need for interoperability, are a welcome addition to the dialogue. Even those comments that disagree are welcome, as all writers used to receiving—and responding to—critical feedback that points out potential errors.

An interesting set of anonymous commenters also starting sending feedback, heavily bashing the idea of H.264 being the "winner" due not to quality but to a perceived failure to report the news in a way that benefits a particular company, On2 Technologies.

"This news obviously wasn't a surprise to you or anyone else that follows the video industry," said one commenter, who didn't give a name. "At Streaming Media East, as Microsoft announced the 'Move Networks' deal, they revealed that Silverlight was not going to be bound to the 'legacy format' and many immediately knew that today’s H.264 adoption was inevitable."

Remember that the article was written back in June. The commenter, though, seems to privy to information that wasn't formally revealed until the September 9 Microsoft announcement—the same day the modified "H.264 wins" article was published online.

A few other comments gave credence to a hunch that the commenter was a strong On2 supporter.

"Writers are 'lacking' while not willing to discuss the 'cost' that comes with implementing the new 'standard'!!" the commenter wrote. "Tim, I'm not letting you off the hook until you answer this, why don't you or ANY other video journalist discuss the MPEGLA & VIA licensing fees??"

This "licensing hassles" theme is common among On2 stockholder comments I've received before, and a quick check of the unnamed commenter's email address yielded a significant number of postings on On2 stock message boards, praising On2 as a "strong buy." I then responded to the commenter by email, asking for clarification as to whether the comments and frustration are meant to address On2's position (either stock, market share or both) but have yet to hear back. In the meantime, the commenter posted the exact same comments on Dan Rayburn's Business of Video blog.

Fast forward five days to September 13, and it's easy to see why someone potentially privy to the On2 situation might be upset by Microsoft's announcement that it is adopting H.264 as well as our analysis of it. Under the title "On2 VP8 Surpasses H.264, VC-1, Real Video in Quality and Performance," the company announced to the world the newest version of its codec, VP8. The press release quoted Move Networks' CEO as saying it planned to use VP8, although Microsoft had announced a greater stake in Move just a few days before.