NEW EDIG

[cksla]

fisherguy 08 Jul 2004, Re EVD.
The Yahooers are in a tizzy because somebody found some Chinese PR's today, which, via their fuzzy logic pidgeon English Babalfish translations, purport to say that the Ministry of Infromation Industries in China today formally announced approval of the EVD standard. Because there is no direct mention of On2 VP, coupled with the BEW royalty spat, the thinking is that VP isn't part of the standard. Personally, I wouldn't draw the same conclusion. First, its not totally clear from the translations what MII may have approved, if they indeed approved anything. Second, assuming MII approved the EVD standard, I can't see where MII would make specific referenece to components of the standard either by technology descriptions or by identification of intellectual property ownership. The standard, if approved, exists in the specifications as published. "Read the spec's". That's all MII is likely to say.

Some more things to keep in mind rgarding EVD and On2 bearing on this topic:

The official submission made by BEW of the poposed EVD industrial standard to MII in China last fall contained only one high definition video compression technology - On2 VP6. Unless there was a subsequent change in the submitted standard (no public acknowledgement has ever been made by either BEW or MII that a change was made), then a reasonable assumption is that On2 remains the proposed high definition compression component until official disclosure to the contrary is made.

Nobody can point to one piece of factual evidence that says that BEW has discarded its intentions to utilize On2 VP technology. As far as I know BEW has never stated publicly that it isn't going to use VP. The only substantiated information bearing on this issue is that:
1)On2 has filed arbitration to collect on minimum royalties and the porting fees that BEW has not paid, and
2)BEW, in comments attributed to Hao Chieh, claims they do not believe they are obligated to pay until such time that they ever start making EVDs including VP.

There have been a number of very fuzzy, contradictory, and outright erroneous reports about EVD progress in China. I note for example that in today's translated PR's purporting to announce the standard approval there are murky claims about major Hollywood studios having endorsed EVD. Pure BS. There has never been a Hollywood endorsement of EVD. That's because, if for no other reason, there has never been a product for Hollyood to endorse that the Chinese could tell Hollywood actually repesents the real EVD product they plan to produce. An indication of this is the fact that as recently as just a few months ago studio folk were asking Eric Ameres for an update on EVD progress when he presented at a conference in Hollywood. Pretty clear indication that as of then Hollywood was still in the dark about EVD - yet from out of nowhere they are now onboard.

Yeah, Hollywood studios are real anxious to sign up for releasing their content for a technology they haven't been able to test, from a Chinese consortium that would appear to be totally confused in its efforts, not to mention an outfit that appears to be on the wrong side of trustworthiness in its business dealings with its originally announced principal US technlogy partner. Hmmm.... let me see if I rememeber. Time Warner is an On2 partner. Gee Time Warner caries owns a lot of content. Hmmmm.... let me see if remember. Sony is an On2 partner. Gee Sony owns a lot of content. For sure I bet these two are just ####### in their pants to let their content out for EVD - knowing, as I am sure they do, how BEW is screwing with On2. And for sure, if BEW picks a decidely inferior compression format I can see these two (TW and Sony)rushing to endorse it over the VP6 which they themselves have both licensed and know to be the best compression technology available. Yeah, right.

BEW for its part has really said very little about EVD, except that next generation EVDs will appear in early 2005 and will incorporate a higher density optical drive format. They haven't said that VP will be the compression and they haven't said it won't be. They haven't said squat. Telling might be the fact that On2 on its part has yet to request that the contract be voided. Maybe that will come, but given the time that's transpired one begins to suspect that there are things afoot which gives On2 management some basis to think that the prospect of VP remaining part of the EVD project isn't dead.

The Chinese, as the old saying goes, can be very insrcutible. In the absence of them publicly speaking to the issue of EVD and the contractual matters with On2, its anybodies' guess on the street as to what the ultimate disposition of the matter will be. Maybe the Chinese are stump stupid and think they have some homebrew compression concoction they can substitute for VP. Improbable. They might think they can utilize a hybrid MPEG4/H264 AVS product. They are mistaken. There is no way that a hybrid MPEG4/264 product (if it actually exists) can match the quality or efficiency offered by VP6. Its not possible to take two independently inferior compression technologies and glue parts and pieces of them together to produce a codec that will beat VP6. Not to mention that if whatever homebrew codec they are thinking of using is based in any way, shape or form on parts of MPEG or H26 technology, then they are on the hook to pay royalties to both of the patent pools which control those technologies. How much sense does that make? They still are going to be on the hook to On2 for minimums because they will lose in arbitration.

Bottom line, in my opinion, if BEW pursues EVD absent VP then they essentially kill EVD's prospects - certainly they do so regarding any future for EVD outside China's borders. That's because absent using VP6 they aren't going to get Hollywood endorsement for content. How many outside China want to watch English dubbed Chinese kung fu movies? 'Cause that's all the Chinese will be able to put out on EVD if it isn't using the best compression technology to be had. The studios certainly aren't going to line up to endorse EVD built around inferior technology, and without Hollywood content EVD has absolutely no future outside China.