Digital Home Thoughts: Is MPEG4 Dead? Someone Thinks So...

"In addition to offering lower quality, MPEG-4 also sports the obligation to pay royalties, not only on encoders and decoders, but also on content. Given that decoders for the other three have always been free, it's doubtful that this costs more, looks worse "value proposition" will win many takers in the streaming media space. This leaves appliances like DVD players, cell phones, and PDAs as the last hope for MPEG-4, but Moore's Law will prove its undoing. Specifically, in the past, these devices were driven by single-purpose chips that could only be prudently designed and manufactured for a single, well-supported standard.

Today, many of these devices are built around general purpose digital signal processors (DSPs) that can support multiple compression technologies. Since these chips aren't locked into a specific technology, this lessens the importance of standards in the technology decision. Finally, it's hard to minimize the importance of the DVD Forum's provisional approval for Microsoft's VC-9 technology, essentially Windows Media Video 9, along with two other technologies, H.264 and MPEG-2, as mandatory on next-generation playback devices."

This is a power play in the strongest sense - Microsoft knows that the key to establishing format dominance is to make the file format free, but making money licensing it to hardware vendors. At least I think that's what they're doing. :D