Heritage Auctions is "Sold!" Over Online Video

Every website has its own priorities when it comes to online video, and for auction house Heritage Auction Galleries, it all comes down to one word, "latency." When you're inviting people to watch an auction online and make bids worth thousands of dollars, you've got to make sure they're getting instant information.

If you're not familiar with Dallas-based Heritage Auction Galleries, it's the world's third-largest auction house and the biggest collectible auctioneer. It specializes in items like coins, currency, comics, and sports memorabilia.

"We auction all the things people wish they had when they were a kid," jokes Brian Carpenter, Heritage's director of information technology.

First Efforts
Offering live video to support its auctions has been a long road for Heritage. Its first efforts go back to January, 2006, and lacked any kind of interactivity. It worked with a vendor to stream live video, but with no interactive elements. In other words, people could watch an action take place, but couldn't place a bid. The system was designed so that people could see how their items were selling. The video's 30-second latency didn't matter, since there was no bidding.

Soon, though, the powers-that-be at Heritage challenged Carpenter to create something more engaging, where viewers could take part in the bidding.

The solution he settled on, from a European vendor, launched in early 2007. It relied on viewers installing the VLC Player on their Windows computers, as well as a VLC browser plug-in. The Mac solution was equally cumbersome. While this brought latency down to two seconds and allowed Carpenter's team to create browser-based bidding tools, it was loaded with problems.

For starters, anytime you rely on a plug-in you're going to lose people who find the process too complicated. Also, the equipment needed to set up video streams from new locations was cost-prohibitive. Since Heritage was still experimenting with online video, it didn't want to sink too much money into a solution it might not stay with.

A Universal Solution
What Heritage really needed, Carpenter knew, was video that required no plug-ins, was widely accessible, and offered latency of under a second. He considered QuickTime, but thought the penetration rate was too low. For high accessibility he needed Flash video. But who could deliver that kind of latency?

"It's a hard business to start in if you don't have a resource who has a list of contacts," Carpenter says. Finding appropriate vendors was a challenge. Many looked to him like fly-by-night companies, while others looked like they had just begun to start a business and might not make it long. When he found ten that he said looked like they might last more than a year, he began to narrow the field. Some vendors couldn't handle his low-latency requirements, and before long only a few candidates remained.

Inlet Technologies secured the deal with a strong demo of its Spinnaker live streaming appliance and an assurance of low latency. Carpenter himself tested its service by training a video camera at his home to an atomic clock, then running the stream through a virtual private network all weekend. He consistently saw latency of 0.8 to 1.0 seconds, which was the improvement he needed. Heritage started with Inlet in June, 2008.

This focus on latency might seem extreme, but it's crucial when mixing real-world and online auctions.

"You are listening to the auctioneer go, 'Can I have $10 thousand? Do I have $11 thousand.' If you're three seconds behind, he's three increments ahead, potentially," Carpenter says. "You may not want to send in a bid of $14 thousand."

Likewise, the people on the auction floor don't want to wait three seconds for Internet bids to come in. Both worlds need to be able to interact seamlessly for everything to run well.

Tweaking video settings to get the lowest latency possible means sending only a 150Kbps stream. That sounds like a throwback to the days when RealNetworks was the major player in online video. While most companies want to deliver the biggest and best picture possible, an auction house needs one that's small and consistent. Standard definition, not high definition, plus low latency is the winning bid for Heritage Auctions.

Troy Dreier's article first appeared on OnlineVideo.net