IS MPEG2 DEAD

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IS MPEG-2 DEAD?

• The Future of Home Entertainment Systems and
  Advanced Codec Technology That Will Make it Work.

Peter Forman January 8, 2004 CES
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Background

• Executive and Consultant in Digital Media
  Industry Since 1989.
• First PC-based Hardware Codec New Video
  Corporation, 1990
• First Software-based, Real-time MPEG-2 Codec for
  PCs Ligos Corporation 1998
• CEO and Consultant to DemoGrafx, Inc. - Sold to
  Dolby Labs - 2003

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The Battle for Home Entertainment Dominance
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Sony Strategy

• Based in Entertainment Cluster
• Emphasis on Features and Gaming Tie-in
• PSX
• Blu-ray Recording
• Networking Focus - Support Local Devices in
  Entertainment Cluster
• Less Dependent on Robust Wireless Video
  Connectivity

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Microsoft Strategy

• PC-Centric Hub and Spoke Topology
• Xbox is a Terminal, Not a Hub
• PC Migrates From Home-Office Workstation to
  Closet Server
• Windows XP Media Edition and Windows Media 9 Play
  Central Role
• Robust Wireless Networking of Video is Key to
  this Approach

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MPEG-2

• THE International Standard for Video Compression
  Since 1995
• Digital Cable, Broadcast, DBS, DVD
• Capable of Producing Reasonable SD Quality at
  Between 1.5 and 2 Mbps Reasonable HD at 11 Mbps
  or Higher
• Easily Encoded on Todays Pentium Class CPU, and
  Decoded on Almost Any Processor
• Widely Available as Inexpensive Hardware and
  Software Implementations for Every Application

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More Advanced Codecs

• MPEG-4 Part 2 (2001)
• DivX (Based on MPEG-4 Part 2) (2002)
• Windows Media Video 9 WMV9 (2003)
• On2 VP6 (2003)
• MPEG-4 Part 10/AVC/H.264 (2003)
• Layered Codecs Pixonics pHD (2003)

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Benefits vs. MPEG-2

• More Bandwidth Efficient
• MPEG-4 Part 2 25 - 50
• WMV9 200
• AVC 200 (SD) up to 400 (HD)
• Special Capabilities
• MPEG-4 Part 2 and AVC Resiliency
• pHD HD with Backward Compatibility to MPEG-2
• Better Licensing Terms
• On2 and EVD (China)
• WM9

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Costs vs. MPEG-2

• More Costly to Encode and Decode
• AVC 5x Encode and 3x Decode
• WMV9 3x Encode and 1.5x Decode
• More Costly/Difficult to Implement
• Fewer solutions available
• More difficult to multi-source
• Licensing Issues
• WMV9 is an Elegant, Well-Positioned Codec

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Market Drivers for Advanced Codecs

• Bandwidth and Storage Limitations
• Red Laser HD DVD (DVD-9)
• Video Over Wireless Networks
• Sony PSP
• Solid State Memory Applications
• Increased Bandwidth Requirements
• HD
• Multi-user Home Entertainment Systems

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Possible CE Applications

• HD on DVD-9
• In-Home Video Redistribution Over Wireless
• Hand held Entertainment Devices

PREDICTIONS 1) THROUGH 2007 ADVANCED CODECS
WILL BE CHOSEN OVER MPEG-2 ONLY WHEN MPEG-2 CAN
NOT BE MADE TO DO THE JOB lt15 OF OVERALL
MARKET
2) AVC WILL TEND TO DOMINATE OVER PROPRIETARY
CODECS (THOUGH WM9 HAS A CHANCE IF CUSTOMERS CAN
OVERCOME MS PHOBIA)
3) PROVIDED LICENSING DOESNT GET IN THE WAY AVC
WILL REPLACE MPEG-2 FOR MOST IF NOT ALL
CE APPLICATIONS OVER THE NEXT 10 YEARS
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AVC in Home Media

• Bulletin available from Jon Peddie Research
• The Battle Over Home Entertainment and the
  Future of Video Compression
• There is a conflict of epic proportions shaping
  up between Sony and Microsoft over the storage,
  delivery and management of digital media in and
  around the home.
• At stake for Sony its continuing dominance of
  home entertainment electronics as it enters a new
  era.
• For Microsoft, its about winning or losing new
  territory for the Windows OS as the market for
  productivity PCs matures.

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Panelists

• Divx, R. Jordan Greenhall
• Ligos, George Mancuso
• VIA, Alan Yuen
• Vsoft, Thierry Fautier