The choice of a more efficient video codec for the emerging HD DVD format has been one of the most contentious issues currently confronting the consumer electronics industry.
While many DVD Forum members, mostly consumer electronics companies, privately discussed their preference for standards-based MPEG-2 and H.264 over Microsoft's Windows Media 9, issues surrounding H.264's intellectual property rights and royalties have made it difficult for consumer manufacturers to embrace H.264 as a new video compression engine for the next generation of consumer products.
Meanwhile, Microsoft over the past several months has altered its strategy by pitching the proprietary video codec as a new Society of Motion Picture Television Engineers standard to be called “VC9.” The move is designed to make the software giant's home-grown technology more palatable to content owners and consumer electronics companies.
Some industry insiders suspect that the DVD Forum may be using Microsoft's Windows Media 9 as a bargaining chip to negotiate with H.264's licensing agencies to reduce royalty payments.
Indeed, the DVD Forum called its latest action to approve multiple video codecs (MPEG-2, Windows Media 9 and H.264) “subject to an update in 60 days regarding licensing terms and conditions, and a presentation by each of the respective licensing bodies at the next steering committee.” The Forum remains held out the “possible elimination of any of the above codecs” at the next steering committee meeting, according to a statement.
Complex licensing structures, or the lack of licenses themselves, has forced some companies to either cancel or postpone indefinitely their H.264-related projects.