Rapid advances in software tools of every description are lowering the bandwidth threshold for broadband Internet services to where applications once deemed to be the domain of interactive TV will soon be transmitted at under one megabit per second.

Not only are these new tools making it possible to create fully interactive, media-rich content and advertising operating at full-screen resolution at low data rates; they are doing so in the context of simplifying the development process to where the costs and technical challenges once associated with producing advanced applications will no longer apply.

Figure 1: Broadband advertisements provide valuable information in a compelling format.

The achievement through new compression and other techniques of a sub-1-Mbps "sweet spot" for broadband content that captures both the cable data and telco-based digital subscriber line markets has been instrumental in driving content and applications producers to prepare for broadband service rollouts in the near term, notes David Goldberg, CEO of, a provider of CD-ROM, music-oriented entertainment that is moving to broadband distribution of its content. "We thought we'd have to operate at higher bandwidth to do the things we're planning, but that's turning out not to be the case," he says. Launch has teamed with broadband content supplier to create a three-dimensional interface environment that will allow users to enter into spaces devoted to a wide range of applications, from games to music videos to full-length feature films. With bandwidth-efficient techniques used in Arepa's file formatting and distribution technologies, all these types of content will be accessible to users with access capabilities in the high hundreds of kilobits-per-second range, Goldberg says.

Intertainer Inc. is another content supplier that is lowering its anticipated bandwidth ceiling for the delivery of interactive TV-type entertainment, making DSL a much more promising platform for its operations than it originally perceived. "There's going to be a dramatic shift over the next 12 months," says Caroline Beck, COO at Intertainer. "There's a ground-swell in feeling among providers of broadband content that there's a competitive environment to work in that we haven't had before."

Intertainer is preparing to roll out services commercially in about a dozen DSL markets, Beck notes, notwithstanding the fact that, today, the movies-on-demand, e-commerce, advertising and many other applications supported by the company are designed to work over 1.5 Mbps links that are beyond the speeds set by the telephone industry for consumer-level services under the newly-approved G.Lite standard. By next year, Intertainer will be able to deliver its services at 800 kbps, Beck says.

Developers of streaming and compression tools affirm the claims by service providers that these targets can be reached. "We've already demonstrated that we can achieve TV quality with video delivered in the sub-megabit range in the right context," says Martin Dunsmir, general manager for emerging technologies at RealNetworks Inc. "We're not yet at the end of the rainbow where streaming movies and other media-on-demand is transparently available for viewing on TVs and PCs, but we're at the first step."

Along with improvements in the tools themselves, another big step will be taken with the launch of broadband delivery platforms like the one Excite@Home is developing using RNI's technology, Dunsmir notes. In fact, he adds, developments in the IP streaming space could begin to affect traditional TV delivery in a big way. "You might actually see HITS (AT&T Broadband and Internet Services' Headend-in-the-Sky) sending MPEG-2 video at 600 kilobits per second," he says.

More compelling ads

Moving in tandem with gains in bandwidth efficiency, the new generation of IP-based tools is also affecting advertising to the point that there no longer seems to be a question as to where the commercial driver behind broadband content development will come from. With the high-speed access market heading into the millions of households over the next year and already in the millions in the work- place, the new quality levels and functionalities offered in the 500 kilobit-per-second to 1 Mbps range promise unprecedented marketing performance for advertising, notes Hilmi Ozguc, vice president of Excite@Home's Enliven advertising software business unit.

"The problem with selling this type of advertising was that there were only a few thousand subscribers, but now the numbers are going to go through the roof," Ozguc says.

Enliven's technology allows advertisers to go beyond the traditional banner-style Internet ad to create pop-up ads with video and audio segments that play on the Web page the user is accessing, without requiring the user to jump out of the page to the Web site of the advertiser or to download a special streaming media plug-in.

"The number-one problem we had to solve was how to provide a richer media experience without requiring people to stop and download software," Ogzuc says. The solution was to develop a very thin software player using Java that downloads with the Web page that carries the ad.

"The main thing we've learned is that broadband gives us the capability to exchange things of real value to consumers, where they give up money and time in exchange for information, convenience, products and even entertainment," says Brigham Field, creative director for advertising operations at Excite@Home. "The reality is, the consumer doesn't just want a message, which is why banner ads on the Internet are not producing strong results." Where clickthroughs on banner ads average less than one percent, the clickthrough rates on broadband ads are averaging anywhere from four percent to more than 40 percent, depending on subject matter and the appeal of the entertainment and information portions of the material, Field says. Moreover, he adds, clickthrough won't even be an especially important metric with broadband, given the depth and variety of information about user responses that are possible in this new environment.

An appreciation of what this means to advertising efficiency is spreading rapidly across the developer community, says Andrea Coffey, spokeswoman for Macromedia Inc. "Researchers are finding that advertising offered at quality levels made possible by access speeds four times or better above dial-up generate 18 times the recall levels of GIF (graphic interface format) banners," she says.

Macromedia has drawn closer to the Excite@Home sphere in a multi-pronged deal that will produce tie-ins between the creative tools and the Web sites of the two entities. For example, Coffey says, Macromedia's Director, a leading creative tool used in development of multimedia and Web content, will be tightly coupled to the Enliven tools, making it easier for content developers to add advertising hooks that will support enhanced advertising capabilities.

"We're also working out a traffic sharing agreement that will link with the @Home and Excite portals," she notes., started over a year ago as a "skunk works" portal for users of Macromedia's toolkit who were pushing the envelope in developing enhanced media, has now become a full-fledged commercial operation, representing still another place where high-speed access customers can go to find content optimized for broadband.

Excite@Home is bringing other tools to bear on advertising as well, as is evident in an ad developed for Toys "R" Us that uses software from Veon Inc. Like many other ads developed for the @Home platform, the multi-layered ad developed for Toys "R" Us can run as a small, video-streamed window within the screen space of a broadband content application such as a CNN news feed, only jumping to a larger or even full-screen segment when the user clicks on.

Once "in" the ad, the user can access a wide range of options, including a virtual trip up and down the aisles of a typical Toys "R" Us store. The shopper can choose any item on the shelves for a closer look, which can include viewing kids using the item, as well as a three-dimensional examination of the item close up, and, of course, the user can click to an e-commerce page that supports online purchases.

Figure 2: In this ad developed for Toys "R" Us, users can take a virtual trip down the aisles of the store.

Veon has developed easy-to-use tools that agencies and advertisers can apply without going to software specialists, says Gaurav Suri, vice president of business development at Veon. In addition, the Veon tools, like those of Enliven, provide a means of setting up comprehensive tracking of customer usage patterns, giving advertisers direct feedback not only on the initial clickthrough, but on specific areas of product interest. "We've developed our (software) player as a layer that can be applied to any video streaming format and that will support use of various application formats like (Macromedia Corp.'s) Flash and HTML (hypertext markup language)," Suri says. "Our goal is to get the creative agencies to use the tools, not to be a creative agency ourselves."

Tests of such advertising are now happening worldwide, says Mark Thompson, technical director for Ogilvy & Mather's online advertising group. "All the marketing forms, from radio, TV, print and direct mail, converge on the Web, and we're trying to develop a baseline of metrics that will be used to assess the value of the broadband experience to advertisers," he says.

Ogilvy is working with IBM and @Home in this effort, with an expectation that the broadband market base in the U.S. will be at 10 to 16 million households by 2002, Thompson says. He makes clear that Ogilvy is approaching broadband in the context of the explosion in Internet usage generally, and so is working now to incrementally enhance advertising capabilities and returns as bandwidth increases, without waiting for something that is clearly definable as "broadband."

MPEG-4 enhancements

The efforts to accommodate ever higher quality multimedia content and advertising at lower streaming rates will get a powerful boost from the commercialization of MPEG-4, version two of which is expected to be finalized by year's end, says Eric Petajan, a member of the technical staff at Lucent Technologies Inc. who represents the company in the MPEG-4 process. "I suspect some developers are already making toolkits that will simplify use of MPEG-4 so that people can begin working with it to develop applications, even before version 2 is finalized," Petajan says.

MPEG-4 is designed to enhance low bandwidth environments by separating the sequence manipulation mechanisms associated with user interaction with content from the content itself. This way, the graphic components to be used in rendering sequences can be stored in bursts to the end user terminal, leaving for actual real-time streaming only a small amount of information in the form of instructions as to how the graphic components are to be composed and sequenced.

"You can scan over and replay content already downloaded to the terminal, allowing the level of resolution in the display to be determined by the capabilities of the CPU rather than by available bandwidth," Petajan says. This means that a multimedia game or CD-ROM-type content played over a 28 kbps link can be displayed at graphic quality levels and frame rates comparable to HDTV, he adds.

MPEG-4, while using some of the same compression techniques that are applied in MPEG-2 and MPEG-1, is not technically backward compatible with those formats. Instead, it is designed to ride over a tiny bandwidth slice within an MPEG-2 stream, for example, thereby allowing end-user terminals that have the CPU to handle the processing associated with MPEG-4 to take advantage of the interactive multimedia components that the new tier brings to the MPEG-2 environment.

"In the near-term, using MPEG-4 to deliver interactive applications, such as enhanced advertising, within broadcast TV applications makes a lot of sense," Petajan says. "You can deliver such advertising without breaking up any of the MPEG-2 infrastructure, and those customers who don't have the processing power to access the MPEG-4 component won't know the difference." MPEG-4 also gives content developers a standardized, straight-forward tool environment for doing all the things they now have to do by bringing together a lot of disparate elements themselves, such as three-dimensional rendering and the synchronization of various multimedia components with each other no matter what interactive choices the user makes. The protocol also includes use of wavelet compression technology and something called "Two-D mesh" on top of the underlying discrete cosine transform compression that is common to MPEG-1 and MPEG-2 to allow developers to easily add zoom-in capabilities with their graphics, Petajan says.

One key to the flexibility of the new standard is the establishment of reference models that become object segments within the graphics space that can be manipulated piecemeal as if they were being streamed together in real time. For example, Petajan, in a recent demonstration, showed how the facial reference points he has developed for the MPEG-4 group can be made to move together in a graphic replication of someone speaking in real time, with only the instructions that affect how each reference point is rendered being sent as the person speaks.

Such capabilities have implications for online chat and community interactions, virtual call centers and other e-commerce applications, where a real person's likeness would come to life much as if a real video conference were underway, while using only the bandwidth required to transmit the audio and the instructions. In other uses of the technology, sports events could be transmitted at low bandwidths, leaving the playing field or court with background crowd as a stored graphic background template that would change in terms of overall scene orientation on commands delivered in real time, while the actual images and action of the sports figures would be streamed in real time as well.

Apple's QuickTime 4.0

Another key development facilitating great flexibility and efficiency in the development of multimedia content is Apple Computer Corp.'s QuickTime 4.0, which now includes a streaming component that relies on the same streaming transport protocol that is used by RealNetworks. By choosing to use Real Time Streaming Protocol, now a standard endorsed by the Internet Engineering Task Force, Apple has assured the availability of streamed QuickTime files across a vast base of end users who have RTSP-based "plug-in" client software already installed at their PCs, says Steve Bannerman, senior product manager for the QuickTime group at Apple.

"We've separated the server from the client (software), which is crucial to getting to economies of scale," Bannerman says.

Until now, files containing multimedia clips based on QuickTime, the dominant tool in CD-ROM, Web and other multimedia applications, could not be streamed in real time unless they were reformatted into another vendor's streaming file format. Now developers using QuickTime 4.0 will be able to use any existing QuickTime file as well as many other multimedia formats in streaming applications without having to re-author the components, Bannerman says, noting that Apple's Quicktime file format has been adopted as the file format for MPEG-4.

"Developers can capture, edit, archive and deploy (content) assets at one time," Bannerman says. Apple simply added a new streaming "track" to the process so that instructions to accomplish that task are integrated into the file without having to change other file components, he notes.

The new system also allows developers to create applications, such as online games, where some content elements are accessed from the network and others are embedded in playback devices, such as CDs or DVDs. "Imagine games where the network track provides new versions without requiring the user to purchase a new CD-ROM," Bannerman says.

Paradigm shift

What all these developments add up to is a major transition into the high-speed data space above 500 kbps by a broad base of the Web community in the months ahead. The new tools now entering the market promise to be as transformative to the strategic thinking about what constitutes broadband and interactivity as anything yet seen in the fast-moving Internet arena.