When RealNetworks announced earlier this month that it was starting MusicNet, a music subscription service, as a joint venture with three major record labels, Rob Glaser, RealNetworks CEO, said he would be happy to open the service to the music players of rivals — including Microsoft.
Glaser could afford to make the magnanimous gesture because such a move would only benefit his company. RealNetworks makes money by selling streaming media servers, and it creates demand for those servers by distributing its music player. Similarly, Microsoft tries to lock users into its own media format with the aim of selling more server operating systems (OSes). What Glaser was offering was an opportunity to allow Microsofts free media player to serve RealNetworks content.
Is Microsoft eager to accept Glasers offer? In short: No. Dave Fester, general manager of the Windows Digital Media Division, gives this carefully worded reply: "We would be happy if RealNetworks embraced Windows Media in the MusicNet service. They have not approached us about this, but we are open to discussing with them the options for including Windows Media support in their service and how it would be implemented." In a swipe at RealNetworks, Fester adds: "It would be of significant mutual benefit for consumers and the industry for RealNetworks to use the best audio quality and security available for digital music distribution."
Welcome to the streaming media format wars. This exchange over MusicNet is only the latest sparring in the battle over proprietary media formats. To lock up the market, RealNetworks and Microsoft do their best to ensure that streaming audio and video content is delivered by their servers, and preferably in their own proprietary formats.
But as RealNetworks and Microsoft slug it out, other companies are complaining that the fight benefits neither content producers nor consumers. The solution, these vendors say, is to adopt the open MPEG-4 format, a new audio and video encoding standard from the International Organization for Standardization.
Apple Computer, Cisco Systems, Kasenna, Sun Microsystems and other companies formed the Internet Streaming Media Alliance late last year to promote an interoperable specification around MPEG-4. The alliance, to date, has attracted more than 60 participants.
Now that streaming media is becoming big business, alliance members say, its time for an open standard that will make it more efficient and economical.
"The momentum for MPEG-4 is growing, and the reason is that streaming is coming of age on the Internet and moving beyond the phase of proprietary solutions," says Rob Glidden, Suns market development manager for broadband and digital media.
Greg Carter, director of business development at Kasenna, concurs. "Microsoft used to have their own e-mail server and client, but that didnt last long," he says. "Proprietary standards dont tend to survive."
While RealNetworks and Microsoft both use the ubiquity of their media players to sell their servers, the companies have different business models for their media operations.
RealNetworks server software runs on multiple OSes, and the company says it supports multiple streaming formats in RealPlayer, though not Microsofts format. In any case, non-RealNetworks formats must be recognized by RealNetworks autoupdate server in order to play on RealPlayer, which ensures that rivals servers cant deliver content to its player.
Microsoft, on the other hand, uses its media technology to promote its OSes. The company gives its media server software away for free, bundled with copies of Windows NT or Windows 2000, the only OSes it runs on. The company does not support RealNetworks formats. But similar to RealNetworks products, streaming content that plays on Microsofts Windows Media Player, which is also bundled free with Windows desktop OSes, must be streamed from Microsoft servers.
Microsoft acknowledges that it uses its media player to promote the sale of Windows NT and Windows 2000 servers. "We are in the business of selling server [OSes], and we do want to protect that business," says Michael Aldridge, lead product manager in Microsofts digital media division. "We have a very open approach relative to [RealNetworks], but we are in the business of selling servers."
RealNetworks takes a comparable stance. Ben Rotholtz, RealNetworks general manager of products and systems, suggests that if the company allowed another type of server to stream to its player, that would degrade the user experience. All the advanced capabilities of the RealSystem architecture, he says, are "key to regulate the server-client experience so that they can throttle together."
Caught in the crossfire are other multimedia software developers and content producers. To get around RealNetworks and Microsofts restrictive licensing practices for their media software development kits, companies have resorted to various tricks. One stratagem is to create a small client program that fools the RealNetworks or Microsoft media player into thinking the file is being delivered by the HyperText Transfer Protocol — which both players support — when its actually coming from a third-party streaming media server.
If the ISMA succeeds in establishing MPEG-4 as the standard for online multimedia, these companies could opt to simply use MPEG-4. The alliance is developing open specifications that will let any company build a media player or server and know that their products will be interoperable with everyone elses.
For now, content providers complain that they have to buy both types of servers to stream tothe largest possible audience, and third-party companies developing delivery systems say they have to get licenses from RealNetworks and Microsoft to integrate their product with the most popular media formats.
RealNetworks and Microsoft, however, claim that Webcasters and other companies want to use their formats and delivery systems, since — according to RealNetworks and Microsoft — the MPEG-4 standard is behind the times.
"Weve gone several generations beyond MPEG-4," Microsofts Aldridge says. "Our customers say, Hey, we want better quality and smaller file sizes." He also notes that MPEG-4 will still require a software developer to obtain a license from various patent holders, but those licensing terms have yet to be decided. In addition, its not clear which companies even hold patents relating to the MPEG-4 standard, though Microsoft claims to own at least one such patent.
RealNetworks Rotholtz also claims his companys proprietary formats are far superior to MPEG-4. He goes on to dismiss some of MPEG-4s advanced features: "The specification contains so much academic over-refinement thats not practical," he says.
Rotholtz also says he was previously unaware that the main push behind MPEG-4 comes from companies frustrated with the proprietary multimedia formats. "We talk to those people, and they arent banging their fists on the table saying, We need MPEG-4. Theres nobody thats doing that."
But members of ISMA, at least, have been banging their fists — and judging by the groups growth rate, others are listening.
Suns Glidden says the demand for open standards is quite strong in two areas. One is to promote competition in the market by ensuring that there are multiple vendors for each component of a streaming media system. The second area, Glidden says, is in the emerging array of hardware devices that can play Internet audio and video. Consumers can download free players to play different types of media on a PC, but makers of devices like set-top boxes and cell phones must pay licensing fees to play RealNetworks- or Microsoft-formatted content. "People are investing millions of dollars in these services," Glidden says. "They cant afford to base those services on a proprietary product that may change tomorrow."
As for the patent-licensing issues with MPEG-4, Glidden says the International Organization for Standardization requires licensing of patents that are employed in its standards to be fair, reasonable and nondiscriminatory.
"Supporting multiple solutions is quite expensive," Glidden says. "The question is: Who benefits from the format wars? Do content owners? Do network operators? Do consumers? It seems to me the only beneficiary is particular vendors with proprietary solutions."