Live From Sundance: The Quality Conundrum


At the Sundance Film Festival in Park City, UT, there’s a lot of buzz about two things that can affect the way content’s delivered to consumers: the shrinking distribution window and the upcoming launch of the HD-DVD (define) and Blu-ray (define) formats. Both could greatly affect when and how audiences consume content. But what effect will they have on streaming video for advertisers and content producers?

In less than three months, Toshiba’s HD-DVD format launches. It makes movies available in HD at the consumer level for the first time. The competing Blu-ray format will follow a few months later. For the past few years, HDTV (define) has allowed a rapidly growing number of consumers to watch TV programming in HD. As HDTV broadcasting becomes standard and the prices of those TVs drop, we’ll becoming a society accustomed to unprecedented levels of content clarity.

Online HD video is currently delivered through progressive download, not streaming. The reason is the streaming pipes currently aren’t fat enough to provide that level of quality. But as consumers become accustomed to increased video quality, will HD quality find a way to become a part of the streaming video experience? If it doesn’t, will consumers be tolerant of lesser quality?

The advent of the HD-DVD (which will be rentable everywhere, including Netflix, in late March) will certainly mean consumers will have a much better long-form home entertainment experience (for those who can afford the players out of the gate).

This could spell trouble for movie download companies, such as CinemaNow and Movielink, if they don’t find ways to compete with the experience consumers are getting via their HD-DVDs.

But will it be complete disaster for online video? Certainly not.

As “The New York Times” pointed out this week, consumer-generated video content is rapidly composing a larger share of online video availability. But consumers can’t create HD content if they wanted to with the technology currently available to the average consumer.

As screens continue to get smaller and on-demand content seemingly becomes shorter, video quality must be just good enough; what the majority of consumers will tolerate. Until they demand better.

Forces are conspiring to make portable, short-form, downloaded video similar in quality to what audiences will expect from HDTV and HD-DVDs. The H.264 video codec embraced by Apple (also a major component of HD-DVD and Blu-ray) is finding its way onto iPods as video podcasts.

It’s certainly possible the gap between quality of progressively downloaded and streaming video will increase to a point that consumers say, “The video is streaming? Quality is going to stink,” and avoid it entirely.

Problem is, advertisers have no choice but to use streaming video in their online ads. Unless the online video ad model resembles the theatrical trailer model (ads are “attached” to content), it’s unlikely the option of producing HD ads for online consumption will exist any time soon. HD advertising has barely found its way onto HDTV.

We may start to see that resemblance occur in certain areas, such as podcasting: content is downloaded and is fully sponsorable.

The bottom line is streaming video quality must improve to keep up with improvements in other areas, for the sake of consumers and advertisers alike.

With long-form content available in HD via TV and home video, and short-form, portable entertainment available in similar formats, the middle ground of streaming video will have to play catch up. Bandwidth is one part of the equation; compression technologies are another.

Luckily, it will take some time before HDTV, HD-DVD, and Blu-ray reach critical mass, giving the streaming video industry time to catch up. This year will usher in new versions of Windows and Windows Media Player, as well as other streaming video viewing software. Will quality improve in time for consumers to not revolt? Only time will tell. Until then, we’ll be keeping a close eye on the situation.

Meet Ian at Search Engine Strategies in New York City, February 27-March 2.


Related reading