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Digital Movie Formats: It Comes Down To Two

For all practical purposes, when it comes to deciding on back-end technology for delivering movies digitally, there are two meaningful formats: Microsoft's Windows Media Video and RealNetworks' RealSystem IQ. Both Microsoft and RealNetworks have distributed millions of copies of their consumer-side media-playing software, so either technology offers studios the desired reach. The question for companies looking to deliver online movies ...
For all practical purposes, when it comes to deciding on back-end technology for delivering movies digitally, there are two meaningful formats: Microsoft's Windows Media Video and RealNetworks' RealSystem IQ. Both Microsoft and RealNetworks have distributed millions of copies of their consumer-side media-playing software, so either technology offers studios the desired reach. The question for companies looking to deliver online movies is whether to go with one format or the other, or to make the added investment of supporting both formats.

Until recently, most technologists working on Internet video applications viewed Windows Media Video as the encoding and delivery format of choice. The release earlier this year of Windows Media Video 8 offered a significant breakthrough by enabling near-DVD-quality transmissions delivered at 500 Kbps, a speed within the range of most DSL subscribers.

Moreover, Microsoft says the new software is a money-saver. Michael Aldridge, lead product manager for the Windows digital-media division, claims that lowering the threshold for near-DVD-quality video to 500 Kbps from 750 Kbps will slash bandwidth costs to deliver a two-hour movie by as much as $1.10. Considering that the pending studio-backed ventures Movies.com and MovieFly intend to transmit millions of movie files each year, if not each month, the financial implications are huge.

But the decision to go with Microsoft is no longer so simple, according to Aron Campisano, CEO of Filmspeed, a Venice, Calif., developer of back-end movie-delivery technology that's working on a full-blown subscription service of its own. Campisano proudly says that his company has never taken an equity investment from either Microsoft or RealNetworks and that Microsoft still offers the most complete system. But even though Filmspeed is a dedicated Microsoft shop, Campisano says RealNetworks, which recently incorporated digital-rights management into its RealSystem Media Commerce Suite, may be the choice for new online-movie services because of its compatibility with such non-Microsoft operating systems as Linux, Macintosh, and even Sun Microsystems' Solaris.

In the end, Campisano says anyone building Internet video applications won't go wrong with either of the delivery systems, although they ultimately will have to go with one system or the other, or both. "There isn't really a third party that matters," he says. "Windows Media and RealNetworks are the VHS and Betamax of our era."