The document provides an introduction and overview of transcoding including: - Transcoding converts media formats to facilitate distribution across different platforms and ecosystems. - Codecs, profiles, containers, and platforms are key terminology. H.264 is a widely used and patented codec. - Formats combine containers and codecs with parameters for playback. - Transcoding allows content to be optimized and customized for different destinations and viewer requirements.

1. Welcome to Today’s Streaming Media Web Event

2. Moderator Dan Rayburn EVP Streaming Media

3. Transcoding 101 David Trescot VP, Rhozet Business Unit Harmonic, Inc

4. Speaker David Trescot VP, Rhozet Harmonic, Inc.

5. Introductions Who is Rhozet? Spun out from Canopus in 2004 Maker of ProCoder and Carbon Coder Provides transcoding for Yahoo!, Amazon, Microsoft, Hulu, CBS, NBC, Turner, BBC, Fox, Discovery, Lifetime, etc. Acquired by Harmonic in 2007 Who is Harmonic? Leading equipment provider to cable, satellite, and IPTV networks Publicly traded (NASDAQ:HLIT) 690 people, $365M in revenue

6. This Transcoding Thing… The process of converting one format to another Facilitates moving media across production, post-production, archival, and delivery ecosystems Acts as the “glue” between different manufacturers Provides future proofing Allows repurposing and monetization of assets Every destination viewer has different requirements Allows for the automated creation of custom assets (commercials, promos, logos, etc.) Enables advanced workflows Sending a file to 10 people who all see it differently depending on their needs (preview, timecode, language…) Database integration An engine that can be integrated into various applications and devices

7. Transcoding Terminology Codecs Profiles Containers Formats Platforms

8. Codecs Codec = Compressor/Decompressor The software or hardware engine that moves uncompressed frames into the compressed domain (and vice versa) Typically “lossy” Reduction in information at each encode Typically asymetrical Decompression is often 10x (or more) faster than compression Techniques Subsampling 4:2:0 vs. 4:2:2 or 4:4:4 8 bit vs. 10 bit color resolution Transformation and simplification Discard high-frequency changes in color DCT (MPEG-2) Wavelet (JPEG-2000) Intra-frame = within a single frame Motion analysis and estimation Most video frames are similar to the ones around them Inter-frame = between multiple frames

9. Codecs (cont.) Codecs using intra-frame compression DV, MPEG-2 (IMX), AVC-Intra, JPEG-2000, DNxHD, etc. Typically acquisition and editing formats Codecs using inter-frame compression H.264, MPEG-2 LongGOP, WMV, VP6, etc. Typically distribution formats Standards like H.264 only specify how to decode the content Allows for compatibility while leaving room for innovation in compression techniques

10. Profiles (and Levels) A “Profile” defines a specific type of compression for a particular codec Defines the syntax that is supported The decoder must match the encoder’s profile support A codec vendor does not have to support all possible profiles A “Level” defines maximum resolution and data rate H.264 Examples Baseline Profile (BP): limited computing power required for decode High Profile (HiP): primary profile for broadcast and BluRay High 4:2:2 Profile (Hi422P): 4:2:2 chroma MPEG-2 Examples Main Profile@Main Level (MP@ML): standard def at max 15Mb/s Main Profile@High Level (HP@HL): up to HD at 80Mb/s 4:4:4 Profile@High Level (422P@HL): supports 4:2:2 chroma

11. Containers AKA “wrappers” A container can contain multiple types of codecs A container can contain more than just video Animation, music, speech, text, subtitles, etc. A container is used to identify, interleave, and synchronize the various components Critically important for successful playback Most of the idiosyncrasies of a particular device or distribution medium are expressed in the container specifications Single biggest source of incompatibility is in containers rather than codecs Example containers QuickTime, AVI, ASF, WMV, MXF, M2TS, M2PS, MP4, VOB, LXF, GXF, WAV, 3GPP

12. Formats The combination of a container and a specified set of codecs (essence) and metadata Example: M2TS with H.264 (HP) video and MPEG-1 Layer 2 audio In more detail includes parameters M2TS H.264 video 720x480, 29.97fps, upper field first CBR, 3 Mbps data rate, High profile, 3.2 Level, ATSC closed-captioning … and about 50 other parameters MPEG-1 Layer 2 audio Stereo, 16-bits per sample, 48Khz sample rate 128 Kbps data rate

13. Platforms The device on which a particular format will be played back, archived, edited, etc. Formats can be platform dependent or independent MPEG-1 is platform independent Flash and WMV are platform dependent (Flash Media Player and Windows Media Player respectively) Just to make things confusing, codecs, containers, formats, and platforms can all be named similarly For example, MPEG-2 is both a codec and a container

14. The Transcoding Pipeline Multipex = “wrapping” in the container Transform = scale, frame rate, crop, logos, concatenation, filtering, etc. Different transcoders can yield very different results even if they use the same codecs DeMultiplex Video Decode Audio Decode Video Transform Audio Transform Video Encode Audio Encode Multiplex

15. The Great Thing About Standards… MPEG-1 OP1a QuickTime LXF WAV MPEG-2 DVCPro100 DPS WMV Dolby VOB H.264 DPX Flash MXF AAC M2TS MPEG-4 VC-1 AVC-Intra DV50 M2PS 3GPP DV25 DVCPro HDV AVI GXF MP4 DNxHD JPEG-2000 OPAtom ASF F4V 3G2 AVCHD AC-3 Omneon WAV DivX

16. Why Can’t We Just Use One Format? Specific purposes Acquisition/editing (highest quality, generational fidelity, direct frame access) Distribution (bandwidth, acceptable quality) Hardware restrictions Set top boxes Cable bandwidth Mobile phone processing power Money Manufacturer “lock-in” Platform ownership Royalties Rhozet needs your business

17. What’s Next? Reduction in bitrate for the same quality Will there be a codec twice as “good” as H.264?

18. Place Your Bets… Acquisition H.264 (AVC-Intra) Television H.264 in M2TS Web H.264 in MP4/F4V WMV/VC-1 in ASF Mobile H.264 in MP4, 3GPP Archiving Whatever you acquired in Transcoding Even if everything is in H.264 you will still be transcoding

19. Beyond Transcoding Watermarking & Fingerprinting DRM Smooth Streaming Royalties ROI

20. Watermarking and Fingerprinting Watermarking Invisible information embedded into image data, typically embedding data in color frequency information Can be used to track individual assets Philips/Teletrax (now Civolution), Thomson NexGuard, Dolby Cinea, etc. Embedder, investigator, manager, database Watermarks can “step” on each other Fingerprinting No information embedded into file Audio and video are sampled to create “fingerprint” that can be searched and matched against central database No tracking ability for individual versions of assets Civolution, Vobile, Audible Magic, YouTube, etc.

21. Digital Rights Management (DRM) Technology to restrict unauthorized use or distribution of content Most computer-based systems use a combination of a license server and public key encryption which ties specific content to a specific machine or device Reduces but does not eliminate piracy All broadly deployed technologies have been beaten Popular Systems FairPlay (Apple, iTunes and iPod specific) Windows Media DRM (Microsoft, Windows specific) Flash DRM (Adobe, Flash specific) MagicGate (Sony, PSP and MemoryStick specific)

22. Emerging Technologies Microsoft Smooth Streaming Not really “streaming”, but rather smart download Uses HTTP rather than RTSP Encodes video at 6 different bitrates in many small 2 second “chunks” Player requests “chunks” of different bitrates depending on available connection speed User experience is seamless even with variable connection Requires Silverlight player and Microsoft IIS server Check it out at www.SmoothHD.com

23. H.264 Royalties H.264 patent pool administered by MPEG-LA Four categories: title-by-title, subscription, free TV, free internet Title-by-title (includes VOD and Disc) No royalty for <12 minute content Lower of 2% or $.02 per title Subscription No royalty < 100K subs $25K for 100K to 250K subs, $50K for 250K to 500K, $75K for 500K to 1M, $100K for > 1M Free TV $2,500 one-time per AVC transmission encoder or… $2,500 annual per Broadcast Market of 100K to 500K, $5K for 500K to 1M, $10K > 1M Free Internet No royalty before 2011 After that, no more than for “economic equivalent” of free television Unclear exactly how that applies

24. How Do You Increase Your ROI? Customize Targeting Reuse content (yours and other people’s) Understand the long tail Refresh Make, beg, buy, borrow, or steal Automate Automation is the only cost-effective way to scale Explore Small tests of technologies and partnerships can be cheap to explore Save everything The cost of acquiring generally dwarfs the cost of storing content

25. Shameless Promotion

26. Rhozet Universal Media Transcoding Supported Video Codecs MPEG-1 MPEG-2, D-10/IMX MPEG-4 Part 2 H.264/AVC/MPEG-4 Part 10 VC-1 AVC-Intra DNxHD JPEG-2000 DV25, DV50, DVCPro, DVCPro100 HDV DPS DPX Windows Media Flash 8 (VP6) Image Sequences RealVideo Supported Audio Codecs PCM MP3 DTS AC-3 AAC AMR-NB Dolby Digital Windows Media Audio RealAudio Supported Containers AVI QuickTime ASF, WMA, WMV MXF (OP1a, OPAtom) MPEG-2 PS, MPEG-2 TS MP4, F4V VOB LXF, GXF WAV, Broadcast WAV 3GPP 3G2 Supported Systems Omneon Spectrum, MediaGrid Leitch VR, Nexio Grass Valley Profile, K2 Quantel sQ Panasonic P2 Sony XDCAM Avid Editing Systems Apple Final Cut Pro Adobe Premiere Pro Grass Valley Edius

27. Universal Media Transcoding (cont.) Basic Video Operations Frame size conversion Frame rate conversion Color space conversion Aspect ratio conversion Interlace/De-interlace conversion Telecine / inverse telecine PAL/NTSC conversion SD/HD conversion Cropping Video Processing Fade in/out Black/white correction Blur Color correction Gamma correction NTSC-safe Median Rotate Sharpen Temporal noise reduction Audio Processing Normalize Fade In/Out Low-pass Volume Dynamic range compressor Additional Operations Timecode imprint Subtitle/CC imprint XML controllable titler Metadata transport and conversion Line 21/CC preservation/conversion Quality checking Logo insertion 601/709 color space support Video capture board support Multiple simultaneous target outputs Unlimited number of encoding passes Remote job submission Batch processing Watch folder automation Segment extraction/insertion FTP delivery

28. Scalable Technology Rhozet’s transcoding software can run on a single machine or across an entire network of machines Takes advantage of off-the-shelf hardware Multiple ways to control the Carbon engine Easy-to-use GUI Batch processing Network watch folders XML-based API for programmatic control Carbon Server management software

29. Products & Pricing Carbon Coder Desktop and automated transcoding on Windows XP Support for all broadcast formats (MXF, LXF, GXF, etc.) Support for analog and SDI ingest (3 rd party hardware) XML-based API Pricing: $5,995 USD Carbon Server Manager for distributed transcoding processing Supports unlimited number of engines with load balancing XML-based API Pricing: $14,995 USD Incorporates integrated transcoding 5 node farm = 1 CS + 4 CCs

30. Some of Our Customers… Amazon.com Ascent Media Bayerischer Rundfunk BBC News BSkyB BT Cablevision CBS CinemaNow Comcast Cox Communications Deluxe Digital Studios Deutsche Telekom Discovery Channel E! Entertainment Echostar Elektrofilm Fox Framepool GlobalFibre Hulu.com Incited Media Lifetime Pappas Broadcasting MSN MTV Playboy ProSiebenSat.1 Rainbow Media Rogers Sportsnet Sony Studio Hamburg Swissinfo/SRI Technicolor Telekom Austria Televisa Thought Equity Time Warner Cable Weather Channel Thought Equity TiVo Yahoo!

33. OEM Partners Adobe Systems Adstream Avid (Sundance Digital) Comcast (thePlatform) Crispin Dalet DAQTron DayPort (Entriq) FlowWorks Grass Valley i-Yuno iMake iQ Computer Masstech Motorola Onlinelib Pathfire Pebble Beach Software Pharos Quantel Screen Subtitling S4M SGI Japan SGL-UK Silex Media VCS Engineering VideoBank Visono Volicon Vyvx

34. Question and Answer Session (please submit questions)

35. Archive This presentation will be archived and available at the same URL. We will be sending you a follow-up email once the archive is posted.

36. Thank You! All attendees will be sent a link to a white paper “Transcoding 101” Demos, white papers, case studies, performance guides, etc. are all available at www.rhozet .com