Case Study: SyncCast Rises to the High-Def Challenge

Technicolor was impressed by SyncCast’s proven ability to deliver high-volume, high-quality encodes under deadline. While Technicolor did encode for broadband before acquiring SyncCast, the quality of the work wasn’t up to the standards expected by the Xbox project, the first large-scale HD download over the internet. "The SyncCast acquisition brought [Technicolor] some very specific discipline around encoding for broadband delivery," notes Ware. "The quality bar was way, way up there."

SyncCast’s experience with DRM also dovetailed with Thomson’s rights management strategies. Apple’s iTunes may be dropping DRM from its digital audio downloads, but it’s far from clear that video content publishers will be so forgiving. Thomson’s intellectual property group has long been a leader in watermarking and fingerprinting technologies, and will no doubt be a player in any case. "To the extent that the content owner is comfortable foregoing copy protection, and is inclined to use something like a watermark, we’re there and we’re actually ready to monetize that probably even further than we could DRM," says Ware. (At IBC 2007, Inlet and Thomson announced that they were partnering to enhance content security during the encoding and production process. Inlet’s Fathom encoding solution will feature Thomson’s underlying digital watermarking technology, enabling simultaneous encoding and watermarking of content to optimize workflow efficiencies and content security.)

Thomson/Technicolor looks to be present at every point of digital media delivery, no matter how that delivery is accomplished. To date, that has meant maintaining a multibillion-dollar physical supply chain business. (Technicolor is the world’s leading manufacturer and distributor of DVDs, with an annual production capacity of 1.7 billion units.) With digital media delivery shifting from a physical model to a download model (see Blockbuster’s purchase of Movielink, and Netflix’s augmenting its postal distribution model with streaming delivery) the SyncCast acquisition signals Technicolor’s determination to stay ahead of the digital media distribution curve.

In order for internet delivery to supplant physical DVDs, enabling viewers to watch downloaded content in their living rooms as opposed to in their dens, offices, or on laptops, STBs will have to reach significant penetration. For that to occur, enough high-quality content will have to be available online to justify the purchase of an STB. One of the reasons we’re not there yet is the cost to publishers of getting that volume of content online. With costs on the order of $500 to have an asset encoded, QC’d, and put up on a video service, it’s not cheap to build up a high-quality digital library.

The same chicken-and-egg scenario has haunted many techno-cultural changes. Sixty years ago, sales of television sets didn’t take off until there was enough programming to entice more than just the hardcore early adopters. Given effective copy protection, content owners are as happy to sell their product as downloaded files as they are to sell physical DVDs. Companies like SyncCast (now Technicolor) and Inlet are working hard to enable them to do just that.