Generic Media: The Next Big Thing

It's not often that a company comes along that promises to change the entire economics of streaming. But one startup, Generic Media, which has been in stealth mode for almost a year, promises exactly that. Palo Alto-based Generic Media (www.genericmedia.com) unveiled its publishing service this week, which lets content providers publish their media in any format, at any bit rate whenever you want it.

Traditionally, content owners have had to create separate copies of content for each combination of media player and connection speed, as well as to regularly update them to stay compatible with technology advances. That means either spending time encoding to different formats and speeds, or paying to have something, or someone else, to do it for you. But this new service essentially enables publishers to reach different media players and bit rates, all from one streaming master source file.

Generic Media takes any raw, high-quality audio or video file, and dynamically transcodes it to any streaming format such as MP3, QuickTime, Real or Windows Media. The "secret sauce" is Generic Media's transcoding engine, which can encode media in real-time. Customers simply need to upload files through its Web interface (or type in a URL) then choose the bit rate and the format, and the file is instantly transcoded.

No longer would you be saddled with audio and video that you have to re-encode every time RealNetworks and Microsoft update their codecs. "You don't have to re-visit your content. You're future-proofing your digital assets," said Peter Hoddie, president of Generic Media.

"It doesn't make the bandwidth costs go away," he said, "you can just control them with more granularity."

Hoddie explained that Generic provides a hosted service — not a product offering — more like a big "server farm," which hosts and streams content for clients with lots of audio and video assets.

At this point, though, analysts aren't entirely convinced that Generic has changed the economics of streaming. "It's early to declare that they're going to take over the entire market," said Josh Bernoff, a principal analyst at Forrester Research. For one, Bernoff said that they still haven't solved the business problem of streaming. "Finding a way for streaming companies to make money is an even more severe problem," he said.

Still, Bernoff said Generic does help the problems of multiple formats. "If they can deliver on what they're promising, they'll be pretty successful," he said.

Not-So Generic Origins

Hoddie comes with impressive credentials from Apple, where he was the chief architect of QuickTime. After leaving Apple, he teamed up with other media professionals to form Generic Media. Hoddie managed to get $12 million in financing from top-notch investors, including Softbank Venture Capital, NTT and Sony.

Hoddie said that the current methods of encoding and re-encoding content are too expensive. That's how he came up with the idea for Generic Media, and a way to transcode on the fly. "[The current methods are] good for Loudeye, but miserable for streaming media," said Hoddie. "It limits the market." He explains that companies shouldn't have to keep re-encoding content whenever a new codec is released, or when they need a new bit rate.

For now, Generic just has one server farm in San Jose, which goes against many of the distributed network technologies many delivery companies use. Hoddie said that this works "just fine" for now, but wouldn't rule out partnering with a content delivery network in the future.

The service consists of three components: the transformation engine, the delivery manager and the publishing manager.

The Media Transformation Engine processes streaming media in real-time, automating traditional tasks such as resizing, encoding, sampling and filtering. It is continuously updated to provide publishers with support for new codecs. The Delivery Manager facilitates (what else?) delivery of the data. Meanwhile, the Publishing Manager is the browser-based interface for publishing media. It lets users transfer and preview media assets.

High Praise from the Industry

During this week's DEMO conference in Arizona, Hoddie says that he's received lots of praise.

Among the notables stopping by Generic Media's booth was Jim Gable, founder of Kerbango and Jeff Hawkins, chairman and founder of Handspring. "Reaction has been great," said Hoddie. "People who do streaming have been blown away. It's not something that they conceived to be possible but now it makes perfect sense."

Carlos Montalvo, VP of Marketing for Virage, sings high praises about Generic Media's service. He says that it promises to eliminate the problem of cost effectively moving audio and video to the Web. "Generic Media's transcoding engine allows providers to encode once and publish to any device, any player and any bit rate, dynamically and on-demand," summarized Montalvo. "It's a pretty neat thing."

Montalvo doesn't see Generic as a competitor and believes that Virage can partner with them because they share a "common philosophy." He isn't completely unbiased: Montalvo and Hoddie worked at Apple together developing QuickTime. Virage is also a technology partner of Generic's.

Hoddie says that one unnamed streaming company first saw them as a competitor, but have since changed their minds. "Now they're thinking of letting Generic Media do the work, because it's not their core competency. Some see this as competition, but I think it'll grow the overall market," said Hoddie.

Loudeye is one company that may be hurt by the emergence of Generic Media. Encoding raw files and transcoding them to other formats is Loudeye's bread and butter. "We've seen Loudeye retrenching from video," said Montalvo, referring perhaps to recent deals Loudeye signed with music labels and its acquisition of music sample company, Discovermusic.com. (When reached for comment, Loudeye refused to comment on this story.)

Customers Included

As part of the unveiling, Generic released a list of companies signed on to use its services, including: Sony, Canon DV, Dreamspan (a production company), ProMax (a provider of video editing systems), R/com Networks (an e-Learning company), Yomiuri (a Japanese news conglomerate) and ZBS Foundation (an arts organization preserving original radio broadcast content).

"As the only media conglomerate with a daily newspaper circulation over 10 million, we decided to complement our traditional divisions with the 'Yomiuri News Stream' site," said Motoyuki Uejima, Manager of Media Strategy Bureau of the Yomiuri Shimbun. "The Generic Media Publishing Service resolves streaming complexities and allows us to focus on making great content. Generic Media supports our need to deliver video over cellular phones and PDAs. NTT Docomo's i-mode phone demonstrates that Japan is leading the wireless Internet age."

Additionally, Generic Media has established partnerships with myplay, Sorenson Media and Virage. Myplay is offering a digital locker service that incorporates the Generic Media Publishing Service. Sorenson Media's video compression and codec services provide Generic Media customers with a clear place to start when needing to convert content to digital streaming masters.

"Myplay's digital subscription services, including the myplay locker, give companies the ability to offer their users an easy digital music experience," said Doug Camplejohn, CEO of myplay, inc. "By joining with Generic Media, we can now offer companies another comprehensive and customizable service that can be accessed from anywhere and through any player.''

Some Drawbacks

Perhaps the biggest drawback to Generic's system is that you need a high-quality audio or video source file. Hoddie isn't too concerned, however. "That's a short term issue for those that don't have it, but it's easier to create one high quality file than to create two or three for streaming. It's less work to transition to our system," said Hoddie.

Another significant downside is that Generic Media's service is available only for on-demand content. But Hoddie counters saying that on-demand is the sweet spot for streaming.

Although Generic plans on hosting a lot of content, Hoddie doesn't believe his company is in the position to offer ways to do business. "It's not our place to tell [our customers] about their business models," he said. However, Hoddie explained that it does have some overlay technology, which can place text, images and animated Flash graphics inside a video. The images can be made to resemble station identifiers — for example, logos that are placed on the bottom right corner of a video window. The overlay images are rendered in real-time into a stream as it is being served.

Sign Me Up

One potential customer for Generic could be AdCritic, which streamed about 30 million videos after this year's Super Bowl. The company made a deal recently with Microsoft to add support for Windows Media in addition to its existing QuickTime format. Considering how many hours of content that needs to be re-encoded and the fact they choose to do it themselves, this is no small feat.

Currently, AdCritic CEO Peter Beckman said that it takes a lot of time and effort to encode video in-house. "It takes about 10 to 15 minutes to convert a movie from MPEG-2," said Beckman.

"If [Generic Media] delivers what they promise", said Beckman, "that's very exciting. We might get it ourselves. It would save us a huge amount of time and money."