THE internet ENCYCLOPEDIA 1 volume 3 phần 6 pdf

REFERENCES CONCLUSION As the Internet becomes an even more critical channel for businesses to reach out to consumers, the value of a wellleveraged trademark has never been higher At the same time, the pressures on trademark owners from infringing activities are requiring them to be ever more vigilant in their policing and prosecution of violators In response to these pressures, courts and lawmakers have expanded and clarified traditional trademark protections, adding greatly to the remedies available to trademark owners who feel their rights have been violated In this chapter, I have covered the fundamentals of trademark law and applied to the unique new situations presented by Internet technologies Although the trademark space will continue to evolve, it is clear that the value of trademarks is as well-recognized as ever in the history of commerce If there is one conclusion to be drawn, it is that trademarks are a complex field of law and procedure, requiring expert guidance to provide maximum opportunity and protection This chapter provides readers with a general overview of many current issues in trademark law, but it is not a substitute for qualified legal counsel As I have noted repeatedly throughout the chapter, successful use of trademark law depends on many detailed analyses and procedural hurdles and requires a significant commitment of time and resources to take full advantage Trademark law provides robust protections to those who, with assistance from talented counsel, seek to protect their goods and services in the marketplace GLOSSARY Blurring At type of dilution in which the distinctiveness of a mark is weakened through its identification with dissimilar goods Deep linking Creating a Web page link that is tied directly to a document deep within the page hierarchy of a Web site, rather than simply linking to the main home page of the site Dilution A lessening of the value of a famous trademark caused by an unauthorized use of the mark, regardless of whether any actual confusion, deception, or mistake occurred Distinctiveness The ability of a mark to distinguish the goods and services of the mark own from the goods and services of another Domain name An alphanumeric electronic address on the Internet Famous trademark A court-determined trademark designation under 35 USC §1125(c) Lanham Act Also known as the Trademark Act of 1946, it created a set of federal rules for governing the process of registering trademarks and established certain nationwide legal protections for trademark Likelihood of confusion The test of trademark infringement under the Lanham Act A likelihood of confusion exists if a substantial number of reasonably prudent consumers are likely to be confused as to the source of the goods or services Infringement Use of a trademark in a way that is so similar to the owner’s usage that an average consumer will be deceived, will mistake the infringing good for the 457 original, or will experience confusion over the nature or origin of the product Initial interest confusion The use of another’s trademark in a manner reasonably calculated to capture initial consumer attention, even though no actual sale is finally completed as a result of the confusion Intellectual property A set of legal theories that recognize property rights in intangible things such as ideas and intellectual creations Meta tags Hidden codes embedded in Web pages that contain key words related to the contents of a particular page, designed to be seen only by search engines Secondary meaning An association that has developed in the public’s mind between the mark or trade dress of a product and owner of the mark or product Service mark A mark that is used to identify a service or the provider of a service rather than a tangible product, such as the name of a consulting firm or the name of a proprietary analytical process used by that consulting firm Tarnishment A type of dilution in which the mark is used in an unflattering light, such as by associating it with inferior or distasteful products or services Trademark A mark that is used by a manufacturer or merchant to identify the origin or ownership of goods and to distinguish them from others and the use of which is protected by law Trade dress The overall image of a product, composed of the nonfunctional elements of its design, packaging, or labeling, including specific colors or color combinations, a distinctive package shape, or specific symbols or design elements U.S Patent and Trademark Office The federal agency charged with managing the nationwide issuance of patents and registration of trademarks CROSS REFERENCES See Copyright Law; Cyberlaw: The Major Areas, Development, and Provisions; Internet Literacy; Legal, Social and Ethical Issues; Patent Law REFERENCES Anticybersquatting Consumer Protection Act of 1999 (ACPA) (15 U.S.C §1129) Retrieved May 9, 2003, from http://www4.law.cornell.edu/uscode/15/1129.html Bicknell, C (1999) Making a mint on wallstreet.com Wired News Retrieved December 1, 2002, from http:// www.wired.com/news/business/0,1367,19285,00.html Brookfield Communications, Inc., v West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir 1999) Coca-Cola Co v Gemini Rising, Inc., 346 F Supp 1183 (E.D.N.Y 1972) Hormel Foods Corp v Jim Henson Productions, 73 F.3d 497 (2d Cir 1996) ICANN Uniform Dispute Resolution Policy (2001) Retrieved December 1, 2002, from http://www.icann org/udrp/udrp.htm Intermatic Incorporated v Toeppen, 947 F.Supp 1227 (N.D Ill 1996) Retrieved December 1, 2002, from http://www.jmls.edu/cyber/cases/intermat.html 458 TRADEMARK LAW Nissan Motor Co., Ltd v Nissan Computer Corp., 61 U.S.P.Q.2d 1839 (C.D Cal., 2002) Nissan Computer Corporation keeps domain name, for now (2002) OfficialSpin.com Retrieved December 1, 2002, from http://www.officialspin.com/main.php3? action=recent&rid=405 Oppedahl & Larson v Advanced Concepts, et al., Civ No 97-CV-1592 (D.C Colo., 1997) Retrieved December 1, 2002, from from http://www.patents.com/ac Panavision Int’l, L.P v Toeppen, 945 F Supp 1296 (C.D Cal 1996) Retrieved December 1, 2002, from http:// www.jmls.edu/cyber/cases/panavis2.html Playboy Enterprises, Inc v Terri Welles, F Supp 2d 1098 (S.D Ca 1998), aff’d in part, reversed in part, 162 F.3d 1169 (9th Cir 2002) Toys ‘R’ Us v Akkaoui, 40 USPQ.2d 1836 (N.D Cal 1996) Trademark Act of 1946 (also called the Lanham Act) (15 U.S.C §1051) Retrieved December 1, 2002, from http://www4.law.cornell.edu/uscode/15/1051.html United States Patent and Trademark Office (n.d.) Trademarks Retrieved April 15, 2003, from http://www uspto.gov/main/trademarks.htm Zatarains, Inc v Oak Grove Smokehouse, Inc., 698 F.2d 786 (5th Cir 1983) Travel and Tourism Daniel R Fesenmaier, University of Illinois at Urbana–Champaign Ulrike Gretzel, University of Illinois at Urbana–Champaign Yeong-Hyeon Hwang, University of Illinois at Urbana–Champaign Youcheng Wang, University of Illinois at Urbana–Champaign Introduction The Travel and Tourism Industry Structure of the Industry and the Role of Information Technologies Emerging Marketing and Management Strategies Travelers and the Internet Preconsumption During Consumption Postconsumption Impacts of Internet Technology on Travel Behavior Travel and Tourism Futures Trend #1 The Continuing Speed and Sophistication of Information Technology 459 460 460 463 464 465 467 467 468 469 Trend #2 Continuing Growth in the Use and Uses of Information Technology in Tourism Trend #3 Changing Forms of Information Technology as a Medium for Communication Trend #4 Emergence of a New Tourism Consumer Trend #5 Emergence of Experience as the Foundation for Defining Tourism Products Future Behavior in Travel Glossary Cross References References 469 470 471 471 472 472 473 473 469 INTRODUCTION The travel industry is the world’s largest industry, exceeding $4.5 trillion in gross output (World Travel and Tourism Council [WTTC], 2002) Recent reports from the World Travel and Tourism Council indicate that tourism employs over 198 million people worldwide, or approximately 7.8% of the global workforce The emergence of travel as a significant economic activity began after World War II as travel became widely accessible to the general population As shown in Table 1, very few people traveled internationally in 1950 as measured by today’s standards Yet, from 1950 to 1970, international travel exploded, increasing by more than 550%! This growth in international travel continued through the 1980s and 1990s to reach over 450 million visitor arrivals in 2001, representing over $260 billion (U.S dollars) in expenditures Since 1990 international travel has increased over 50%, and for a number of countries it has grown to be their largest commodity in international trade Indeed, the travel industry now serves as one of the top three industries for almost every country worldwide (Goeldner & Ritchie, 2002) Information technology has played a central role in the growth and development of the tourism industry In the early years of mass global tourism (from the 1950s to the 1970s), the technology used was largely limited to computer systems that supported the internal functions of large operators in the transportation, hotel, and food service sectors Also, a number of central reservation systems (CRSs) and global distribution systems (GDSs)—Sabre, Amadeus, Galileo and Worldspan—were developed to enable travel agencies (and other similar intermediaries) to directly access schedule and pricing information and to request reservations for clients These intermediaries became the primary users of travel information systems, thus providing important links between travelers and industry players (World Tourism Organization Business Council [WTOBC], 1999) During the late 1980s and early 1990s these systems and the information they contained emerged as important strategic tools, enabling system operators such as American Airlines and Hilton Hotels to grow and successfully position themselves within the overall travel market The work of Mayros and Werner (1982) and Wiseman (1985) describes this significant development in the travel and tourism industry An important characteristic of the growth of these systems was the inclusion of detailed behavioral information about each customer, including demographic characteristics, travel history, travel preferences, and responses to marketing/promotional programs Armed with this information, existing systems were significantly enhanced and a variety of new systems were developed, which provided the basis for the emergence of a number of new approaches for managing tourism enterprises (Poon, 1993) As a consequence, the relationships of firms and organizations within the travel industry changed dramatically, placing emphasis on obtaining and distributing customer-related information as well as expanding strategic relationships in order to more fully exploit various business opportunities within the travel value chain The success of central reservation systems and global distribution systems paved the way for the Internet, enabling the travel and tourism industry to quickly exploit its many strengths Indeed, in many ways the Internet is ideal for the travel and tourism industry As a communication tool, it is simultaneously business- and consumer-oriented The Internet is business-oriented because it enables businesses to communicate with potential visitors more easily and efficiently and allows them 459 460 TRAVEL AND TOURISM Table World Tourism Growth Year International Tourism Arrivals (millions) International Tourist Receiptsa (billions US$) 1950 1960 1970 1980 1985 1990 1995 1996 1997 1998 1999 2000 25.3 69.3 165.8 286.0 327.2 457.2 550.3 596.5 618.2 626.4 650.4 698.8 2.1 6.8 17.9 105.3 118.1 263.4 406.2 435.6 439.6 442.5 455.4 475.8 Source: World Tourism Organization (2001) a International transport receipts excluded to better support and immediately respond to customer information needs through the provision of interactive travel brochures, virtual tours, and virtual travel communities In addition, the Internet enables tourism-related enterprises to communicate with their partners more effectively in order to develop and design offers that meet the individual needs of potential visitors The Internet is customer-oriented in that it empowers the user to easily access a wealth of information, enabling the traveler to almost “sample” the destination prior to an actual visit Moreover, emerging ecommerce capabilities enable the traveler to make reservations, purchase tourism-related products, and share trip experiences with others Today, the Internet is one of the most important communication tools for travelers as well as travel and tourism enterprises For example, recent studies by the Travel Industry Association of America (TIA) (2002a) indicate that almost one-third (31%) of American adults use the Internet to search for travel information and/or make reservations (see Table 2); for American travelers, this figure increases to 45% Recent studies also show that the travel and tourism industry responded to the emergence of Internet-based technologies by adopting a number of new and innovative ways to communicate with consumers, as well as with other industry partners As such, the travel and tourism industry is one of the most significant users of Internet technology as measured by Table Internet Use for Travel Planning: 1997–2002 Year % of U.S Adults % of U.S Travelers 1997 1998 1999 2000 2001 2002 18 25 30 33 31 21 33 40 46 45 Source: TIA (2002a) the number of Web sites, Web pages, and online sales volume (Werthner & Klein, 1999) Indeed, recent studies of online spending show that consumers spent $19.4 billion in 2001 on U.S travel sites, which accounts for approximately 36 percent of the $53 billion spent by consumers at all U.S Internet retail sites (TIA, 2002b) Further, surveys of American convention and visitor bureaus show that essentially every bureau maintains a Web site, with some offering more advanced ecommerce capabilities, and surveys of the Internet indicate that over 75 million Web pages exist supporting the travel and tourism industry (Wang & Fesenmaier, 2002) This chapter presents an overview of many of the uses of the Internet by travelers and the firms and organizations that compose the travel and tourism industry The next section provides a brief synopsis of the structure of the industry and the role of Internet technologies, focusing on four major sectors: hotels, airlines, travel agents (and related intermediaries), and destination marketing organizations (DMOs) Following this introduction to the use of Internet-based technologies in travel and tourism, emerging marketing and management strategies are considered and various issues related to the development and use of Web sites and online management information systems are discussed The subsequent section focuses on the role of the Internet from the travelers’ perspective A variety of consumer-related technologies are considered, including travel “brochure” Web sites, virtual tours, and mobile devices As part of the discussion, changing patterns of use and their impact on the travel experience are considered The last section of this chapter identifies five global technology-related trends affecting the future role of the Internet in travel and tourism In addition, some possible ways in which the Internet will shape the future of the travel and tourism industry are discussed THE TRAVEL AND TOURISM INDUSTRY Structure of the Industry and the Role of Information Technologies The travel and tourism industry can be characterized as comprising all organizations that are involved in the production and distribution of travel and tourism products It can be viewed as an umbrella industry (see Figure 1) containing a set of interrelated businesses, such as transportation companies, accommodation facilities, attractions, catering enterprises, tour operators, travel agents, and providers of recreation and leisure facilities (Werthner & Klein, 1999) To respond effectively to the dynamic character of the industry, information must be able to flow among the clients, intermediaries, and each of the suppliers involved in serving the clients’ needs As a result, information technology (IT) has become an almost universal distribution platform for the tourism industry IT reduces the cost of each transaction by minimizing print, coordination, communication, and distribution costs It also allows short-notice changes, supports oneto-one interaction with the customer, and enables organizations to reach a broad audience (Poon, 1993) However, the Internet has not affected all sectors equally Certain sectors such as airlines have been aggressive adopters of technology, using it to help manage and streamline their THE TRAVEL AND TOURISM INDUSTRY Consumers NGO Tourists NTO Travel agent Government bodies Suppliers Note: Intermediaries Tour operator RTO DMO, Planners & Administration 461 CRS/GDS Incoming agent LTO Hotel chain Primary Suppliers NGO = Non-Governmental Organization RTO = Regional Tourism Organization CRS = Central Reservation System Airlines NTO = National Tourism Organization LTO = Local Tourism Organization GDS = Global Distribution System Figure 1: The travel and tourism industry and the Internet Source: Werthner & Klein (1999) Reprinted with permission operations and to gain strategic advantages (McGuffie, 1994) Others, such as the hotel sector, have been less enthusiastic and have only recently begun to take advantage of many of the benefits that the technology can bring (Connolly & Olsen, 1999) Many traditional travel agencies are also lagging behind other sectors in terms of technological adaptation, and it is increasingly evident that experienced consumers are often better informed than professional advisors However, given the way in which information technology is reshaping the basic structure of both commerce and society in general, its importance to the success of all types of tourism companies can only grow in the future As a result, tourism companies have changed dramatically the way in which they conduct their business and are under pressure to invest further in new technology in order to maintain their competitiveness Hotels The hotel industry bases much of its distribution on direct contact with customers (WTOBC, 1999) Historically, hotels have distributed information through print-based media such as brochures, travel planners or regional guides, and received reservations by mail, phone, and fax More recently, hotel rooms have been made accessible for booking through global distribution systems (GDSs) and through direct access to hotels using central reservation systems (CRS) However, such technologies have been inadequate as customers have traditionally not had access to these systems and travel intermediaries have experienced difficulty and delay in finding and booking appropriate hotels, whereas hotels have experienced high clerical costs attracting and processing bookings from customers The emergence of new information and communication technologies (i.e., Internet technologies) presents new opportunities to make these processes more accessible and more efficient The use of the Internet in the hotel industry is growing exponentially and this enables hotels to reconsider the way they are doing business Although the hotel sector overall has been slow to use the Internet as compared to other industry sectors (Connolly, Olson, & Moore, 1998), many hotel managers are becoming increasingly aware of the potential distribution, promotion, and interactive marketing advantages of the Internet The Internet offers several advantages for hotels of all sizes One of the advantages is increased effectiveness due to cost reduction and revenue growth Another advantage is higher quality customer relationships due to the possibility of personal contact services and dialogue with the customer (Morrison, Taylor, Morrison, & Morrison, 1999; Sterne, 1999) For example, customers can answer questions about their personal preferences for rooms, and based on this information, a customer receives services at the hotel that are adapted to his/her preferences It is now generally agreed that Internet-related technologies are the single greatest force driving change in the hotel industry and will continue to have dramatic and sweeping implications on how hotels conduct business in the future Hotels are expected to position themselves strongly on the Internet to take advantage of its distribution capabilities such as reach, content dissemination, feedback collection, interactivity, and one-to-one marketing Further, current trends indicate that this greater involvement in IT by the hotel industry will increasingly encompass customer-centric approaches to capitalize on the cost structure and long-term potential of the Internet while at the same time differentiating products and building lasting value propositions 462 TRAVEL AND TOURISM Airlines Air transportation systems worldwide are being dramatically affected by technological developments Many of these developments focus on the use of Internet technology to improve the efficiency of operations (Sheldon, 1997) The first applications of computer technology to airline operations emerged in the 1950s when central reservation systems (CRSs) were designed The primary function of computerized airline reservation systems was to simplify the process of booking flights by allowing travel agents to find relevant flight information and make reservations directly from their terminals without having to call airline reservations offices (Klein & Langenohl, 1994) Because of their many operational and cost-related advantages, CRSs became essential for the distribution of airline tickets through travel agencies Until the mid 1970s, airline computer reservation systems were used only for proprietary airline information and the major airline companies all had their own CRSs (Sheldon, 1997) Some of the CRSs were combined to become global distribution systems (GDSs), which provided multiple carrier information and constituted important electronic distribution channels The major GDSs include Galileo, Amadeus, Sabre, and Worldspan, and these are now available through the Internet These airline reservation systems provide a number of functionalities to travel agencies including flight schedules and availability, passenger information, fare quotes and rules, and ticketing Most of the systems now also enable consumers to view schedules, fares, and fare rules and to book flights In addition to developing reservation systems as the predominant distribution channel, many airlines have invested heavily in information systems to automate other areas of airline operations and management, which can be categorized into two sections: (1) systems for streamlining operations such as baggage and cargo handling systems, cabin automation, and safety systems, and (2) decision support systems to aid in decision-making related to flight scheduling and planning, crew scheduling and management, gate management, and departure control Travel Agencies/Online Intermediaries Travel agencies are intermediaries that arrange and distribute travel information to individual travelers, with some agencies specializing in certain market segments or products In addition, many travel agencies function as tour operators, designing their own package tours and selling them either directly to the traveler or through other agents Travel agencies use information intensely and therefore need IT to process that information In fact, information on travel products, destinations, schedules, fares, rates, and availability is their most important product and defines their existence The more information a travel agency can access electronically, the more timely, accurate, and efficient services it can provide to its clients The most prevalent application of IT in travel agencies is the GDS terminal, which was first placed in travel agent offices by major airlines to facilitate airline bookings in the 1970s (Sheldon, 1997) GDS terminals are still the major information and booking tools used by travel agents for all types of travel products However, the advent of the Internet has significantly changed the way travel and tourism products are distributed Increasingly, consumers can access information online and travel agents have been forced to adapt to this change Travel agents have an ambivalent relationship with the Internet because it can be a threat in that it makes products available directly to the consumer and yet it also provides additional business opportunities Many travel agencies offer services on the Internet, giving them a much broader geographic consumer base than if they operated in traditional ways They can receive bookings from clients through the Internet and can even book the passenger on flights without issuing paper tickets Travel agents can also use the Internet as a research tool, and this might be particularly important in the future as some travel products become available only via the Internet In addition, IT applications can be used by travel agencies to create value-added products or services through the online provision of their travel expertise in combination with the wider range of travel products and services available on the Internet However, realizing that physical location is irrelevant in today’s electronic marketplace, new types of travel agencies which exist only on the Internet, such as Expedia and Travelocity, are emerging and continue to raise the level of competition among travel agencies Destination Marketing Organizations Destination marketing organizations (DMOs) are typically not-for-profit, small and medium-sized, informationintensive organizations that perform a wide range of activities to coordinate the diverse components of the tourism industry (Gartrell, 1988) DMOs act as a liaison, collecting and providing information to both the consumer and the industry in order to facilitate tourism promotion and development of a specific area In general, destination marketing organizations have been slow to adopt IT in their operations and marketing activities It was not until the late 1980s that computer systems were adopted by the larger DMOs to enhance publications and information operations and, to a lesser extent, to support reservation services During the late 1990s, as desktop computing technologies became more widely available, DMOs began to use IT more extensively More and more DMO directors realized that Internet marketing was an inseparable, often critical part of their overall marketing endeavor They have since developed a high level of interest in the Internet because the use of the Internet offers the potential to reach a large number of consumers at relatively low cost and provides information of greater depth and quality than traditional media In other words, using Internet technology enables DMOs to promote their destinations’ tourism products and services better, present associated organizations more equally, and collect customer information for effective customer relationship management (CRM) More importantly, the Internet allows them to improve business processes, conduct marketing research, provide customer service, and facilitate destination management and planning with less dependency on time and space THE TRAVEL AND TOURISM INDUSTRY Despite this potential, DMOs have not been particularly quick in establishing a sophisticated Internet presence Several factors have contributed to the current status of DMOs’ Internet strategy One factor is related to the complex structure and relationships of the various constituents DMOs represent The travel and tourism industry has a very complex structure, with a large percentage of the organizations classified as small businesses (Gartrell, 1988) Among the DMOs’ constituents are marketing organizations at different levels, suppliers, and distributors Although each entity maintains critical relationships with other entities in order to deliver the desired products and services, the enormousness of this diverse industry as well as the different benefits these constituents are seeking make the job of DMOs complex and difficult The unique characteristics of the Internet and the capabilities required of DMOs for implementing effective Internet marketing have also been identified as important influences Marketing is a creative and adaptive discipline that requires constant regeneration and transformation in accordance with changes in the environment (Brownlie, Saren, Whittinton, & Wensley, 1994; Cronin, 1995) Thus, conventional marketing activities cannot be implemented on the Internet in their present form (Hoffman & Novak, 1996) For Internet marketing strategies to be successful, DMOs have to be aware of the capabilities and characteristics of the Internet and need to start developing new marketing concepts and paradigms, because the Internet presents a fundamentally different environment for marketing activities than traditional media (Connolly & Sigala, 2001) Despite these problems and challenges, DMOs have begun to recognize the opportunities that emerge from using the special features of the new medium, in particular the interactivity and multimedia capabilities it provides As a result, the number of DMO Web sites is rising rapidly, offering online destination information with increasing quality and functionality Emerging Marketing and Management Strategies The adoption of information technology has transformed the way in which the tourism industry conducts business With the assistance of new technology, especially the Internet, new opportunities have emerged for tourism organizations, which enable them to market their travel products and services and manage their daily business activities more effectively In particular, innovative marketing and management strategies have evolved in the areas of Web development, Web advertising/promotion, e-commerce activities, customer relationship management, and the use of online destination management systems Web Site Development Hanson (2000) observed that there are three major stages in Web site development: (I) publishing, (II) database retrieval, and (III) personalized interaction Stage I sites provide the same information to all users Though a Stage I site can contain thousands of pages, pictures, sound, and video, it is limited in the dialogue it affords between the 463 travel Web site and the user because it only broadcasts information from the Web site to the viewer Modern Web tools make Stage I travel Web sites easy and inexpensive to develop in that almost any document can be converted and moved online With experience and investment, the travel organization moves to Stage II Web sites, which combine the publishing power of Stage I with the ability to retrieve information in response to user requests The responses are dynamically turned into Web pages or e-mail Interactivity and dialogue have started, although this activity is limited to a series of “ask–respond” interactions However, the ability to use Web sites as points of access to images, sound, and databases is particularly valuable A Stage III travel Web site dynamically creates a page catering to an individual customer It moves beyond an “ask–respond” interaction into a dialogue and may anticipate user choices and suggest possible alternatives A Stage III travel Web site does more than just react to requests typed into forms or selected by clicking on an image It requires the capabilities of Stages I and II plus the customization of content and functions to the needs of a specific user Destination marketing organizations use Web-based technologies in different ways and with varying intensity, owing to different backgrounds, financial resources, and marketing objectives (Yuan & Fesenmaier, 2000) Some DMOs are at a preliminary stage of utilizing Web technologies for marketing activities, and these Web sites are typically only used to broadcast information by providing brochure-like information Others are more advanced and sophisticated in this regard, taking advantage of Web technologies to make business activities more effective and efficient, or even to re-engineer whole business practices More advanced DMO Web sites typically include more sophisticated capabilities such as interactive queries and request forms, personalization, and recommendation functions Web Advertising/Promotion The Internet is an almost pure manifestation of marketing principles and practices (Inkpen, 1998) It is a tourism marketer’s dream because (1) it enables travel companies of different sizes to compete on more equal terms and (2) it allows a travel company to open up a direct and potentially personalized channel of communication with its customers In other words, travel companies of all sizes are much more equal in their competition for consumers’ attention on the Internet Travel is the most important business on the Web in terms of the volume of advertising and promotion (eMarketer, 1999) It is also most likely to generate revenues and achieve profits through its Web presence However, in order to be successful in Web advertising/promotion, tourism organizations have realized that the Web is a medium that combines the elements of other media Hoffman and Novak (1996) describe the new form of communication that the Internet provides as an “interactive multimedia many-to-many communication model” where interactivity can also be with the medium in addition to through the medium Travel and tourism fit especially well with interactive media because 464 TRAVEL AND TOURISM they constitute an information intensive industry where transactions can be rather easily made online E-commerce Activities Before the onset of the Internet, electronic commerce was usually conducted over a proprietary network connecting a group of organizations such as airline companies, travel agents, and hotels with each other through CRSs or GDSs The nature of the transaction was purely business-to-business Tourism businesses now use the Internet as a means of redefining their focus, creating new products, finding new distribution channels, and creating new markets For example, the major airline sites now offer customer reservations, electronic tickets, seat selection, in-flight merchandise, and reward points; in addition, some of the airlines have enhanced their sites to offer lodging, transportation-package deals, and cruises through their alliance partners (Harrell Associates, 2002) The use of the Internet in the travel and tourism industry has also been driven by the convergent forces of the shift of consumer behavior toward more intensive uses of online environments and the successful adaptation of marketing and sales strategies by the industry For many consumers, online booking of travel is already the norm, and this can only be expected to strengthen in the immediate future Travel is a product that online consumers want to purchase; indeed, according to Forrester Research (1999), it is the product that those who are online, but have not yet purchased online, want to purchase most From the point of view of travel and tourism suppliers, however, there is some reticence from certain sectors of the industry, such as the cruise line industry, to compete directly with their traditional intermediaries by making the move to direct sales, whereas others, such as the airline industry, have embraced the new online channels with great enthusiasm E-commerce solutions are gaining momentum and are expanding beyond reservations to include supplychain management (e.g., procurement), internal business applications through intranets, and other business-tobusiness transactions as well as business-to-customer sales It is certain that the Internet will continue to become faster, more reliable and secure, and also more featurerich In addition, it will become more mobile through portable devices such as personal digital assistants (PDAs) and cell phones that can communicate with ambient intelligent devices embedded in appliances and will increasingly be enabled by speech, thus truly giving customers anytime, anywhere access in a format conducive to their needs Customer Relationship Management Customer relationship management (CRM) is a managerial philosophy that calls for the reconfiguration of the travel organization’s activities around the customer Successful CRM strategies evolve out of the ability to effectively capture exhaustive data about existing and potential customers, to profile them accurately, to identify their individual needs and idiosyncratic expectations, and to generate actionable customer knowledge that can be distributed for ad hoc use at the point of contact (Newell, 2000) Further, the success of CRM initiatives is dependent on the ability to collect, store, and aggregate large amounts of customer information from various sources One of the major driving forces of CRM using the Internet is the ability to target each individual interactively With the Internet, individuals and travel marketers can interact, and this direct interaction creates customer value and sets the stage for relationship building Travel marketers continue to seek ways for compiling accurate databases of personal information such as sociodemographic, socioeconomic, geographic, and behavioral characteristics for potential customers Such a database creates a wealth of relationship marketing opportunities Crucial to the establishment of such comprehensive customer databases is the ability to use software agents, without human intervention, to collect, categorize, and store large amounts of personal customer information in a cost effective manner for later data mining A second important issue is the ability to collect the desired information directly from the primary source rather than having to purchase it from secondary sources such as travel and tourism consultants Online Destination Management Systems The term “destination management system” (DMS) has come into use in recent years to describe the IT infrastructure of a destination marketing organization and may be defined in a number of ways depending on the capabilities of the system Increasingly, a DMS is regarded as having to support multiple functions An integrated DMS supports not only the DMO’s Web site, but also a wide range of other promotion, marketing, and sales applications (Sheldon, 1997) These might include the design and production of printed materials, tourist information center services (for information and reservations), call center services, kiosks, database marketing, project/event management, and marketing research DMSs can greatly enhance a travel destination’s Web presence by integrating information from various suppliers and intermediaries and are increasingly used as the informational and structural basis for regional Web portal sites TRAVELERS AND THE INTERNET Internet technologies have not only changed the structure of tourism and its related industries They have also had a profound impact on the way consumers search for tourism information, construct and share tourism experiences, and purchase tourism products and services In contrast to many consumer goods and services, the consumption of tourism experiences involves often extensive pre- and post-consumption stages, in addition to the actual trip, which itself can spread over several weeks (Jeng & Fesenmaier, 2002; Moutinho, 1987) These stages of the tourism consumption process are typically informationintensive, and Internet-based technologies have come to play a significant role in supporting consumers throughout this multistage process The specific ways in which the various technologies are used in the different stages depend on the particular communication and information needs they are expected to serve (see Figure 2) For instance, Internet technologies are used in the preconsumption phase to obtain information necessary for planning TRAVELERS AND THE INTERNET Pre-Consumption Planning Expectation Formation Decision-Making Transactions Anticipation 465 Consumption Post-Consumption Connection Navigation Short-Term Decision-Making On-Site Transactions Sharing Documentation External Memory Re-experiencing Attachment Figure 2: Communication and information needs in the three stages of tourism consumption trips, formulate correct expectations, and evaluate, compare, and select alternatives, as well as to communicate with the providers of tourism products and services to prepare or execute transactions In contrast, the functions served by technologies during the actual consumption of tourism experiences are more related to being connected and to obtaining detailed information relevant at a specific place and moment in time During the postconsumption phase, Internet technologies are used in ways that allow sharing, documenting, storing, and reliving tourism experiences, as well as establishing close relationships with places, attractions, or product/service providers, as in the case of Frequent Flyer programs For example, e-mail will typically be used in all stages, but mainly to obtain information or make reservations in the preconsumption phase, to stay connected with family and friends while traveling, and to share pictures and stories with members of one’s travel party or other individuals after concluding a trip Although all Internet technologies are probably used by travelers at some point or in some way, several applications have been identified as being of particular importance in the context of tourism experiences The following provides an overview of these technologies, how they tend to be used, and the impact they have on consumers during the various stages of the tourism consumption process Preconsumption It is in the initial phase of the tourism consumption process that most of the impacts related to Internet-based technologies are currently experienced Consumers use the Internet and its diverse applications in this first stage of the tourism experience to gather information, formulate expectations, inform/support their decision-making, and reserve or purchase the various components (transportation, accommodation, etc.) to be consumed during their trips Brochureware Brochureware refers to Web sites or Web pages created by transferring the contents of printed tourism brochures directly to digital environments Brochureware was one of the first Internet applications made available to tourism consumers, owing to the fact that tourism businesses quickly recognized the value of the Internet as a powerful publishing medium Web sites designed as brochureware represent the simplest form of Web design and completely ignore the content presentation and communication possibilities the World Wide Web offers (Hanson, 2000) Nevertheless, brochureware is the most common way in which tourism information is currently made available to consumers and, consequently, constitutes an integral part of tourism-related online experiences Despite their obvious limitations, digitized tourism brochures on the Internet still support consumers in that they enable potential travelers to browse and evaluate tourism products without temporal or spatial limitations Furthermore, even the very basic implementations of brochureware make use of hypertext and provide hyperlinks that allow consumers to move through online tourism information in ways that are typically not supported by printed brochures Brochureware is expected to give way to more interactive forms of Web site content presentation as more and more tourism businesses recognize the value of engaging consumers in experiential ways Virtual Tours Virtual tours are tools that enable the potential consumers of tourism products to explore and immerse themselves within an interactive Web environment in order to gain the needed experiential information about a destination or tourism establishment (Cho & Fesenmaier, 2001) The term “virtual tour” is widely used on the Web and can range from a series of pictures or slide shows to streaming video and highly interactive virtual reality settings The realism provided through virtual tours creates immersion, which, in turn, leads to immediate, direct, and real experiences that generate a strong sense of presence As a result of this telepresence experienced through virtual tours, consumers are able to construct a more vivid picture of the tourism product and are therefore more likely to reach well-informed decisions Thus, the significance of virtual tours in the context of tourism lies in providing consumers with an opportunity for “product trial” before the actual purchase Tourism products are, in large part, experience-oriented intangible goods (Vogt & Fesenmaier, 1998) that are typically consumed at a place far away from the point of purchase and often cannot be experienced without being consumed in their entirety Consequently, product trial is usually not available to the potential consumers of tourism products However, tourism bears many risks because its components are consumed in unfamiliar environments, constitute a significant expenditure for most consumers, and typically entail high involvement from the part of the consumer Given DIGITAL VIDEO SIGNAL REPRESENTATION 539 Table Data Rate and Corresponding Compression Ratio Required for Several Well-Known Applications Application Network Data Rate Video Parameters Compression Ratio Mobile customer service video iMode About 9.6 kbps About 320 × 240 × 16 at 15 fps About 1920:1 Video-conferencing, Shopping POTS ISDN, FOMA (initial) GPRS FOMA (planned) UMTS About 56 kbps About 64 Kbps About 320 × 240 × 16 at 15 fps About 320 × 240 × 16 at 15 fps About 329:1 About 288:1 About 128 Kbps About 384 kbps Up to Mbps About 320 × 240 × 16 at 15 fps About 320 × 240 × 16 at 15 fps Up to 1024 × 768 × 24 at 29.97 fps About 144:1 About 48:1 About 566:1 Digital Movie Broadband About 500 kbps–1.5 Mbps Up to 1024 × 768 × 24 at 24 fps About 905:1 Digital Television Cable HFC About 1.5–4 Mbps Up to 1080 × 1920 × 24 at 60 Hz (29.97 fps) About 746:1 Digital Versatile Disk DVD distribution About 6–10 Mbps Up to 720 × 480 × 24 at 29.97 fps About 42:1 Digital Cinema Satellite About 60–80 Mbps over 45 Mbps line Up to 2560 × 1080 × 30 at up to 29.97 fps About 55:1 Operations and Infrastructure Supported by Digital Video Video compression facilitates system functions comprising storing, retrieving, transmitting, receiving, nonlinear editing, indexing, manipulating, restoring, and denoising digital video sequences Video compression technology provides a significant component of infrastructure for familiar systems including digital, interactive, or time-shifted television, video-on-demand, home and in-flight entertainment or shopping, interactive games and multimedia, streaming media, video editing suites, camcorders, security cameras, and medical scanners DIGITAL VIDEO SIGNAL REPRESENTATION source In view of the widespread use of existing analog display devices, digital video sequences are frequently converted to analog form and current digital television standards are expressed in terms consistent with existing analog television systems International Telecommunication Union (ITU) Recommendation ITU-R BT.470–6 (11/98) records characteristics of conventional analog television systems including the National Television Standards Committee (NTSC), phase alternating line (PAL), and System` Electronique Couleur Avec Memoire e (SECAM) adopted by a number of countries worldwide Although discussion of analog video input types is outside the scope of this article, they may be classified as composite, component analog, or S-Video In contrast, a serial digital interface provides connections for ITU-R BT 601–5, composite digital video, and four channels of digital audio with a transfer rate of about 270 Mbps Anatomy of a Digital Video Sequence Interlaced Digital Video A motion picture scene is a subsequence of images (frames) usually resulting from continuous camera action The images that define a digital video sequence comprise an ordered set of pixels A pixel may be defined as the smallest distinguishable and resolvable area in an image The number associated with an image pixel may refer to any information of interest including sampled measurements of light, temperature, image feature location, or visual object trajectory The pixels of multidimensional images are labeled by at least two quantities referred to as dimensions A hyperspectral image records a collection of subimages each of which is gathered from a distinct region of the electromagnetic spectrum An inhomogeneous image records a collection of diverse information An ensemble is a collection of images described in statistical terms According to ITU-R BT.470–6, all the television systems listed in Annex of that recommendation employ an aspect ratio of the picture display (width/height) of 4/3, a scanning sequence from left to right and from top to bottom, and an interlace ratio of 2/1 resulting in a picture (frame) frequency of half the field frequency Odd and even scan lines are traversed on successive scans Sources of Digital Video Color Models A digital video sequence may be captured or created directly in digital form or converted from an analog video The Commission Internationale de l’Eclairage (CIE) defines standards for color illuminants and observers Noninterlaced (Progressive) Digital Video In contrast with the Recommendation ITU-R BT.470–6, noninterlaced (progressive) video sequences result from scanning all the lines of a picture frame once per field resulting in a picture (frame) frequency equal to the field frequency In principle, video frames may be scanned in any order such as a depth-first tree search widely used for tiled images 540 VIDEO COMPRESSION including the chromaticity coordinates diagram defined in a joint ISO/CIE standard ISO/CIE 10527:1991, which supersedes CIE S002(1986) The range (gamut) of colors visible to the human eye is described by the LAB gamut in the CIE chromaticity diagram, larger than the EKTA film gamut which is, in turn, larger than the RGB digital media gamut Poynton (1999a,b) described aspects of color specification and coding relevant to video signal processing in the form of Frequently Asked Questions available online The CIE home page (Commission Internationale de l’Eclairage, 2000), the HyperPhysics Web site (Nave, 2001), and the Color Metric Converter Web pages (Dawes, 1999) serve to encourage further online exploration of human vision and color concepts The analog NTSC television standard SMPTE 170M1999 specifies the system reference white and the primary color channels (green, blue, red) in terms of chromaticity coordinates The system reference white has been chosen to match the chromaticity coordinates of the D65 illuminant defined by joint ISO/CIE standards ISO/CIE ISO 10526:1999 and CIE S 005 E-1998 intended to represent average daylight with a correlated color temperature of approximately 6500K According to SMPTE 170M-1999 section 5, a cathode ray tube display has an inherently nonlinear electrooptical transfer characteristic and to achieve an overall system characteristic that is linear, it is necessary to specify compensating nonlinearity elsewhere in the system In NTSC, PAL, and SECAM systems, the signal is pre-corrected for non-linearity at the signal source assuming the display is intended to be viewed by human observers in a dimly-lit environment Although Table of ITU-R BT.470–6 (conventional television systems) lists the assumed gamma of the display device for which a precorrection of a monochrome signal is made to be typically 2.2 (in some countries 2.8), the operating values of the respective transfer characteristics may vary from the precise values given in sections 5.1 and 5.2 of the standard to meet operational requirements in practical systems ITU-R BT.601–5 defines a method in section 3.5 for constructing digital video luminance and color difference signals (Y, CR, CB ) comprising the steps of constructing analog luminance EY and color difference signals (ER − EY , EB − EY ) as weighted sums and differences of the corresponding gamma-corrected analog television color signals (ER, EB , EG ), renormalizing the analog television luminance and color difference signals to the ranges EY ∈ [1.0, 0.0], (ER − EY ) ∈ [+0.5, −0.5], (EB − EY ) ∈ [+0.5, −0.5], and quantizing these renormalized analog luminance and color differences signals (chrominance) to a uniformlyquantized 8-bit binary encoding equivalent to a decimal range [0, 255] to provide digital luminance and color difference signals (Y, C R, C B ) The digital luminance occupies only 220 levels to provide working margins with black at level 16 and the color difference signals occupy 255 levels with zero value at level 128 It is usual to limit the gamut of digitally coded (Y, C R, C B ) signal value to that supported by the corresponding ranges of (R, G, B) signals Sampling, Quantizing, and Coding We conventionally think of images as sampled and quantized at a sampling rate large enough to preserve the useful information When we sample light measurements, we usually record both the brightness (luminance) and color (chrominance) information associated with an image pixel In a motion picture application we often record the frame number (or time code) to indicate the position or presentation time of the frame relative to the start of the scene or video image sequence The frame aspect ratio of a rectangular image frame is the ratio of its width to height International Telecommunications Union Recommendation ITU-R BT.601–5 (formerly known as CCIR 601) specifies methods for digitally coding standard 4:3 and wide-screen 16:9 television video signals for both 525-line and 625-line television systems In particular, the pixel aspect ratio (defined as the ratio of pixel height to width) may be more or less than 1/1 resulting in rectangular (nonsquare) rather than square pixels Aho (2002) showed how to deduce the ratio 11/10 for rendering data from 525-line systems and 54/59 for 625-line systems from analog standard video sampling rates ITU BT.601–5 recommends co-siting the samples representing digital luminance and color difference signals (Y, C R, C B ) to facilitate the processing of digital component video signals and further recommends subsampling to reduce the data rate Horizontal subsampling of the color difference signals by 2:1 yields a 2/3 saving in data rate over (R, G, B ) with almost imperceptible change in visual quality when implemented with proper decimation and interpolation filters The 4:2:2 nomenclature indicates luminance samples for every color difference samples in a scan line Horizontal and vertical subsampling by 2:1 is denoted by the 4:2:0 and yields about 1/2 the data rate for (R, G, B) In turn, 4:1:1 denotes horizontal subsampling by a factor of without vertical subsampling If a fourth parameter is mentioned—as in 4:4:4:4—it refers to the alpha channel required for keying applications Note that digital luminance levels and 255 are reserved for synchronization in 4:2:2 systems while levels to 254 are available for video Figure 2a illustrates the digital sampling of luminance and chrominance Each cell indicates a luminance sample while chrominance samples are indicated by cells designated by “C” and alpha channels by cells designated by “A.” The 4:4:4:4 sampling scheme samples chrominance and alpha channels with every luminance sample The 4:2:2, 4:1:1, and 4:4:4:4 schemes sample chrominance with luminance samples while the 4:2:0 scheme samples chrominance between luminance samples ITU-R BT.601–5 digital video is sampled at 13.5 million pixels per second (for both 525- and 625-line systems) A 525-line analog NTSC (ANSI/SMPTE 170M-1994) video signal is sampled at exactly 12 + 27/99 million pixels per second when sampling with square pixels A 625-line analog PAL (ITU-R BT.470–3) video signal is sampled at DIGITAL VIDEO SIGNAL REPRESENTATION 541 Figure 2: (a) Digital sampling of luminance and chrominance Each cell indicates a luminance sample while chrominance samples are indicated by cells designated by “C” and alpha channels by cells designated by “A.” The 4:4:4:4 sampling scheme samples chrominance and alpha channels with every luminance sample The 4:2:2, 4:1:1, and 4:4:4:4 schemes sample chrominance with luminance samples while the 4:2:0 scheme samples chrominance between luminance samples (b) Generalized Balanced Ternary Sampling and Addressing Scheme Seven hexagons, labeled to form an aggregate, which can be used to tile the plane The address “23” refers to the hexagon in position of the aggregate in position If we define the address to refer to an aggregate of hexagons, the address “077” indicates a pattern formed from the aggregation of aggregates of hexagons exactly 14.75 million pixels per second Although the ITUR BT.601–5 Recommendation states that the duration of the digital active line for either 525-line or 625-line video signals is 720 samples, the active line is not clearly defined Tables to of SMPTE RP187–1995 recommend values to quantify the center, aspect ratio and blanking of video images relative to a reference image lattice of width 1920 and height 1080 pixels, with derived pixel aspect ratios that Chris Pirazzi points out in his “Lurker’s Guide to Video” to be somewhat impractical and inconsistent with current industry practice A “full raster” image, coded at 10 bits per sample, contains timing, synchronization, closed-captioning, and other ancillary information Telecine, Pull-Down, and Inverse Telecine Time Code Tiling Techniques SMPTE 12M-1999 defines a time and control code for television, audio, and film systems operating at 29.97, 25, and 24 frames per second A video frame often contains a time code similar to hours, minutes, and seconds as an index for editing purposes According to section of SMPTE 12M-1999, “the exact field rate for NTSC television systems is 60/1.001 fields per second (59.94 Hz) with color frame rate 29.97 Hz so that straightforward counting at 30 fps will yield an error of approximately +108 frames in an hour.” “Drop frame time code” is an SMPTE time code option that allows the time code to agree with clock time In drop-frame time code mode, frames and are dropped on every minute with this correction negated at the beginning of every tenth minute so that the time code agrees with clock time as if the frame rate were truly 30 fps Note that 25-frame systems (PAL) for which the frame rate is exactly 50 Hz and 24-frame systems (film media) not require a drop frame option In principle, a pixel can be any suitable shape, not just square or rectangular Grunbaum and Sheperd (1980) classified the 81 isohedral tilings of the plane Herring (1994) of the U.S Army Construction engineering Research Laboratory pointed out that hexagonal tiles have uniform adjacency with six nearest neighbors and may be arranged hierarchically to establish a scalable domainspecific software architecture model for mapping virtual environments onto network computing resources Herring (1994) showed how a hexagonal tessellation organizes space into a hierarchy Teranex (Teranex, 2002) pointed out that the conversion of 24 fps film material to 29.97 fps digital video (telecine) takes place through a process commonly known as 2:3 (or 3:2) pull-down in which four consecutive film frames are padded out to five digital frames of 10 digital fields An encoder will often try to detect that it is receiving filmoriginated material and remove the redundant fields in an inverse telecine process to provide additional compression However, the motion and scene changes in the original material together with the editing post-processing of digital video can often lead to corrupt 2:3 sequences causing the encoder to spend additional resources on inverse telecine This can be corrected by pre-processing the material to create a correct 2:3 cadence Addressing Techniques Gibson and Lucas (1982) pointed out that the tiles of the aforementioned hexagonal scheme may be organized into rotational hierarchies of seven hexagons and addressed via a hierarchical place value system known as Generalized Balanced Ternary, occasionally used in image and 542 VIDEO COMPRESSION vision processing Figure 2b shows the Generalized Balanced Ternary sampling and addressing scheme Seven hexagons, labeled from to 6, form an aggregate that can be used to tile the plane The address “23” refers to the hexagon in position of the aggregate in position If we define the address to refer to an aggregate of hexagons, the address “077” indicates a pattern formed from the aggregation of aggregates of hexagons See Snyder, Qi, and Sander (1999) and the exploration of tesseral addressing schemes advocated by Bell, Diaz, Holroyd, and Jackson (1983), and Jackson, Bell, Stevens, Freedman, and Dickman (1986) DIGITAL VIDEO SIGNAL COMPRESSION Overview and Tradeoff Dimensions The video compression process typically trades communications or storage bandwidth for processor cycles and picture quality determined by the intended application of the digital video sequence In addition to considerations of image compression applied to each frame independently of the others (intraframe coding), scenes showing moderate motion may be effectively compressed by considering what has changed between frames (interframe coding and conditional replenishment) A motion picture will often have video sequences synchronized with audio tracks and ancillary information such as system parameters A video sequence may be coded at multiple bit rates or in multiple versions Digital Video Quality Assessment Measuring the quality of a video sequence reconstructed from compressed imagery is an application-dependent task While there may be well-defined criteria for acceptability of the compressed video sequence intended for machine use in a scientific or medical discipline, considerable research activity is still needed to close the gap between objective and subjective assessments of quality for video sequences intended for human viewing Human Visual Response Assessment of video quality by human observers, invited to view scenes encoded with varying parameters takes the human visual response (HVR) explicitly into account Jain (1989) and the HyperPhysics Web site (Nave, 2001) introduced the following key elements of the HVR Eye movements focus scenes onto the retina, which contains rod and cone photoreceptors The cones are clustered about the center of the retina ( fovea centralis) and are sensitive to red, blue, and green color stimulus ( photopic vision) Although the blue-sensitive cones number much less than the red- or green-sensitive cones, their sensitivity is far greater The rods are highly sensitive to peripheral motion at low light levels and relatively insensitive to color (scotopic vision) Humans perceive luminance in terms of relative contrast (Weber’s Law) The Mach Band effect demonstrates that perceived brightness is not a monotonic function of luminance (lateral inhibition) MacAdam ellipses demonstrate regions of just noticeable difference in color in the CIE chromaticity diagram Bloch’s Law states that “light flashes of different durations but equal energy are indistinguishable below a critical duration.” This critical duration depends on how well the eye is adapted to the dark and is nominally about 30 ms When a light flashes at a rate above the critical fusion frequency, the flashes are indistinguishable from a steady light of average intensity The eye is more sensitive to flickering of high spatial frequencies than low spatial frequencies Human attention is attracted by faces in video scenes but may be distracted by peripheral object motion Subjective Evaluation Subjective evaluation requires a group of human observers—preferably not expert in image quality assessment—to view and rate video quality in terms of a scale of impairments, which range from “not noticeable” to “extremely objectionable.” ITU-R BT.500–10, Methodology for the Subjective Assessment of the Quality of Television Pictures, recommends a specific system prescribing viewing conditions, range of luminance presented to the viewer panel, number and experience of viewers, monitor contrast, selection of test materials, and process for evaluation of test results The Double Stimulus Impairment Scale and the Double Stimulus Continuous Quality Scale are particularly noteworthy Subjective tests are costly and not highly reproducible ANSI T1.801.01–1995 provides a set of test scenes in digital format while ANSI T1.801.01–1996 provides a dictionary of commonly used video quality impairment terms Objective Evaluation Objective evaluation techniques range from simple test metrics that not take the HVR into account (such as the peak signal-to-noise ratio often quoted by researchers) to the vision system model metric developed by the Sarnoff Corporation (Sarnoff Corporation, 2001), which relies on comparison of maps of just noticeable differences between original and compressed video sequences, one frame at a time Annex A of ANSI T1.803.03–1996 lists a set of objective test criteria that may be used to measure video quality in one-way video systems, applying objective tests closely related to known features of the HVR Webster et al (1993) presented a scheme for combining subjective and objective assessments on test scenes based on objectively generated impairments Rate Distortion Relationships The Shannon (1948) rate distortion bound refers to the minimum average bit rate required to encode a data source for a given average distortion level If the data can be perfectly reconstructed, the bit rate at zero distortion is equal to the source entropy, a measure of the information contained in the source In practice, many DIGITAL VIDEO SIGNAL COMPRESSION researchers compare the effectiveness of video compression algorithms by plotting empirically determined quality measures as a function of observed bit rate for a given set of test sequences Almost invariably, the observed video quality improves with increased bit rate Principles of Digital Video Compression Digital video compression operates by eliminating redundant spatial, temporal, hyperspectral, statistical, or pyschovisual information A brief inspection of Figure 1a shows considerable overlap between frames 1232 and 1233 but a discontinuous change of scene (likely as a result of editing) between frames 1231 and 1232 All the frames shown exhibit strong local spatial correlation, the motion of the astronauts exhibits temporal correlation, the viewer’s attention is focused on the motion of astronauts and the expressions on their faces, and the space suit color contrasts well with the background Figure 1b illustrates the well-known video artifact of “dropped frames” when this movie is compressed at an average data rate less than the original 293 kbps Human Destination Compression of video sequences intended for human viewing may take place by a combination of lossy and lossless compression steps Local spatial correlation may be removed by intraframe coding techniques such as block matching or transform coding followed by quantization of the transform coefficients (see Data Compression) Temporal correlation may be removed by interframe coding techniques predicting the motion vectors observed in differences between successive frames Spectral correlation may be removed by applying temporal decorrelation or modeling techniques to the spectral dimensions of the hyperspectral imagery; coding redundancy may be removed through careful design of compression codes, while psychovisual redundancy may be addressed by techniques that drop frames and increase the bit rate in regions containing human faces, sharply contrasting regions and trajectories of distracting objects that move rapidly through the peripheral field of view Machine Destination In scientific and medical applications, imagery may be correlated in any of the preceding ways There are likely to be additional constraints on the compression which may include fidelity criteria (such as 90% of the encircled energy to remain within the pixel for remotely sensed land use data, or the peak difference in value reconstructed from the compressed imagery to be within 10% of the original value for 90% of the reconstructed pixels) together with processing constraints such as the bit rate must remain approximately constant within the communication channel capacity regardless of video quality or content and consume no more than 5% of the available processing resource As an example, Freedman, Boggess, and Seiler (1993) and Freedman and Farrelle (1996) set forth criteria for the experimental compression system developed to optimize real-time calculations on large diverse data sets from 543 NASA’s Cosmic Background Explorer mission in a clustered computing environment in which the application software exceeded 1M lines of code: Provide compression transparently without changing the application software Compress instrument pipeline and science analysis data products to better than 16–50% Process compressed data at a worst case throughput not less than 90% of uncompressed data processing Preserve required accuracy of instrument housekeeping and scientific data according to specified validation criteria Exceed bitwise reliability of 10–13 on average (flawless compression of 380 GB) Several times this factor is desirable Support full random access to data records Provide a capability to select specific classes of data for compression Provide a capability to select a compression scheme (representation) for each field of a data record Preserve overlaps in separately processed data segments Store search keys (e.g., time code and pixel address) in plain codes Optimize choice of representation, combining a priori scientific knowledge with adaptive knowledge of data Provide mechanisms for easy user configuration and database management of compressed data Pre- and Postprocessing Video source material is often pre-processed before encoding and post-processed before distribution Common preprocessing steps include digital nonlinear editing (Ohanian, 1998), transcoding from another compressed representation, and the conversion of film-originated material from 24 to 29.97 fps via the telecine process just discussed Common postprocessing steps include digital nonlinear editing, the inverse telecine process, and the manual deletion or recoding of specific frames Motion Estimation and Compensation Strong temporal correlation between successive video frames suggest that the bit rate of a video sequence may be reduced by interframe coding methods such as conditional replenishment, motion-compensated coding, and three-dimensional transform coding The conditional replenishment approach seeks to encode only the difference in pixel values which change between successive frames and requires considerably less processing power and simpler algorithms than either motion-compensated coding or three-dimensional transform coding Motion-compensated methods usually result in data rates below that resulting from conditional replenishment and comprise determining motion vectors from frames preceding the current frame by methods such as block matching, region matching, or analysis of optical flow, predicting the motion vectors for successive frames, estimating the prediction error of these motion vectors, and encoding the predicted motion vectors 544 VIDEO COMPRESSION buffer the video stream so that the user perceives the video streaming process to be in real time together with the estimate of their prediction error (Shi & Sun, 2000) The three-dimensional transform technique has become feasible due to recent advances in electronics manufacture and represents a growing area for research DIGITAL VIDEO COMPRESSION STANDARDS MPEG-1, -2, -4 Visual Codecs Rate Control of Compressed Digital Video Introduction The information content of digital video sources may vary in complexity from scene to scene Constant bit rate encoding forces the reconstructed video quality to vary in order to maintain a (near) constant bit rate for the channel coder Variable bit rate (VBR) has the goal of maintaining (near) constant quality by varying the bit rate allocated to scenes of varying complexity Popular methods of rate control include varying the quantization of transform coding in a feedback loop and embedded zero tree encoding (Shapiro, 1993) Koenen (2001) pointed out that the Moving Picture Expert Group (MPEG)—whose formal name is ISO/IEC JTC1/SC29/WG11—has developed the widely used MPEG-1, -2 and -4 codecs to facilitate and standardize infrastructure for the interoperability of multimedia MPEG-1 is still widely used on the Web, targeted at bit rates 64 kbs –1.5 Mbps, MPEG-2 is the basis for current digital television and Digital Versatile Disk (DVD) standards, targeted at 1.5 Mbps –7 Mbps or higher, and MPEG-4 is an extensible toolbox of algorithms that addresses the coding of audiovisual objects throughout an extended bit range from about bps to more than Gbps The standards address video compression, together with audio and systems elements The MPEG Web site (http://mpeg.telecomitalialab.com) provides much detailed information about the MPEG standards including an overview Psychovisual Modeling Human attention is often attracted to faces and facial expressions and distracted by the motion of peripheral objects across the field of view (see Colmenarez, Frey, & Huang, 1999) An encoder may choose to encode these regions of interest at a higher bit rate than others if the regions can be bounded (typically, by focus boxes) Intra-, Predictive, and Bidirectional Frames Table shows the relationship among intra (I), predictive (P), and bidirectional (B) frames referred to in the MPEG standards and introduced in the MPEG-1 standard (ISO/IEC 11172–2:1993) I frames are coded using information only from that frame P frames are coded using forward prediction from previous I or P frames B frames are encoded from previous and succeeding frames using I or P frames This, in turn, implies that the encoding order may be markedly different from the display order Since B frames require both past and future frames to be decoded before they can be decoded and displayed, the presence of B frames adds considerably to the encoder delay The MPEG-2 simple profile at main level requires only I and P frames, thus reducing delay Statistical Multiplexing Often, a broadcaster wishes to transmit several program streams on a channel Statistical multiplexing is a process by which the instantaneous encoding rates of multiple program streams are adjusted by VBR techniques to maintain either (near) constant quality or optimize the aggregate bit rate in the channel Network Transmission Issues In networks with quality of service guarantees such as the Internet, the varying availability of bandwidth leads to network congestion and packet jitter Approaches for addressing these issues include buffering the video stream and employing techniques that yield multiple bit rates for same stream Hunt (2001) filed a patent application that indicates a congestion management scheme—intended primarily for mobile videophone users—in which graphics and text may be displayed when it is necessary to Sequence, Group of Pictures, Slice, Macroblock, Block, and Pixel A group of pictures (GOP) contains I, and potentially P, or B frames During encoding the user selects the duration of the GOP as the number frames between successive I frames (N ) together with the distance between Table Display and Transmission of a Group of 18 NTSC MPEG-2 Intra (I) Display Frame Transmit Frame I B B I P B B P P B B P P B B P P B 10 B 10 P P 11 B 12 B 12 P 11 P 13 B 14 B 14 P 13 P 15 B 16 B 16 P 15 P 17 B 18 B 18 P 17 Note: Predicted (P) and bidirectional (B) pictures The P pictures are predicted from the previous I picture and the B pictures are interpolated from both the previous and next I or P pictures The decoder must buffer P frames and compute B frames The maximum length of a group of pictures (GOP) is 18 pictures on the NTSC system and 15 pictures on the PAL system DIGITAL VIDEO COMPRESSION STANDARDS nearest I or P frames (M ) Prediction errors are propagated throughout the GOP and accumulate until the next I-frame is reached If N is large, the accumulated error may become unacceptable If M is 1, the encoder will use only I and P frames A frame may be divided into slices, which contains rows of macroblocks, from a single macroblock row to a full frame A macroblock contains the luminance information Y for a × block area together with the subsampled chrominance information C B , C R, which, for 4:2:0 subsampled video sequences, may cover as small as one block Each block, in turn is defined to contain × pixels over which discrete cosine transform coding is performed (see Data Compression) MPEG-2 Test Model rate control depends on adjusting the quantization of the transform coefficients resulting from all the blocks of a macroblock slice in a feedback loop MPEG-4 System Decoder In the same way that MPEG-1 and -2 standardize only the bit-stream syntax and decoder algorithms, MPEG-4 standardizes a system decoder model The Koenen (2002) overview of the MPEG-4 standard showed the concept of encoding scenes containing visual objects and sprites The discrete cosine transform, quantization, inverse discrete cosine transform, inverse quantization (see Data Compression), shape coding, motion estimation, motion prediction, and motion texture coding all combine to optimize the visual layer of the video compression system for specific content Error Resilience Video compression typically uses interframe compression techniques to optimize the bit rate Furthermore, the channel coder receives variable length codes as input Any transmission errors, to which channels without quality of service guarantees (such as the wireless Internet) are especially prone, may cause loss of synchronization and the inability to reconstruct certain frames Error resilience techniques such as those defined in the MPEG-4 and H.263 standards serve to reduce this risk Resynchronization markers are inserted periodically at the start of a video packet, based on a predetermined threshold number of encoded bits and reversible variable length codes allow some of the data between resynchronization markers to be recovered if the data have been corrupted by errors Error Concealment Koenen (2002) pointed out that a data partitioning approach can improve on the simple expedient of copying blocks from a previous frame when errors have occurred A second synchronization marker is inserted into the bit stream between the motion and the texture information When errors occur, the texture information is discarded and the motion information used to compensate the previous decoded video packet In real-time situations, where there is a backchannel from the decoder to the encoder, dynamic resolution conversion may be used to stabilize the transmission buffering delay 545 Content-Based Compression The MPEG-4 standard supports content-based coding, random-access to content objects, and extended manipulation of content objects Shape and Texture Coding The shape-adaptive discrete cosine transform based on predefined orthonormal sets of one-dimensional discrete cosine transform functions (see Kaup & Panis, 1997) can be used to encode visual objects of arbitrary shape (not just rectangles) together with texture Sprite Coding MPEG-4 supports syntax for the efficient coding of static and dynamically generated sprites, which are still images representing backgrounds visible throughout a scene of a video sequence Object Coding MPEG-4 supports the coding of audiovisual objects Figure depicts an audiovisual scene containing scrolling text, audio, background sprite, arbitrarily shaped video, and graphics General Scalability The MPEG-4 Standard supports the scalability of visual objects through the following profiles described in Table MPEG-7 Visual and MPEG-21 Standards The MPEG-7 multimedia content description interface (Martinez, 2001) supports query-by-content via descriptors expressed in the extensible markup language In the visual case, the standard intends to convey basic and sophisticated information about the color, texture, shape, motion, localization of visual objects, and the recognition of faces The stated vision for the MPEG-21 multimedia framework (Bormans & Hill, 2000) is “to enable transparent and augmented use of multimedia resources across a wide range of networks and devices.” The standard is intended to support interoperable content representation and intellectual property rights management in a “scalable and error resilient way The content representation of the media resources shall be synchronisable and multiplexed and allow interaction.” MPEG-4 includes hooks for an open intellectual property management and protection scheme A more interoperable solution is planned for development in the MPEG-21 standard Bormans and Hill (2000) further described specific interactions and showed how the MPEG-7 standard supports transactions that produce and consume digital data items ITU-T Visual Codecs The ITU visual codecs H.261 and H.263, Video Codec for Audio Visual Services at px64 kbit/s and Video Coding for Low Bit-Rate Communications, are primarily used for video conferencing applications, in which data rate and end-to-end delay are important for lip synchronization, a situation not encountered in broadcast applications However, MPEG-4 contains many concepts derived 546 VIDEO COMPRESSION “welcome to the sunnyphone projectTM, universal video for a wealth of devicesSM.” Sprite Dr Immanuel Freedman explains the development of a low bandwidth video communications system Text Arbitraryshaped Video Audio Wireless Network Internet Transcoding Proxy Server Web cam Color Palmtop Downloaded video client Graphics Figure 3: Audiovisual scene containing scrolling text, audio, background sprite, arbitrarily shaped video, and graphics from H.263 ITU-T H.261 operates on a common intermediate format (CIF) source specified by section 3.1 CIF has an aspect ratio of 4:3 with 352 × 288 pixels and 2:1 horizontal and vertical decimation of the color difference signals Quarter CIF (QCIF) further decimates the spatial extent of the CIF picture ITU-T H.261 supports a capability to reduce the transmitted frame rate by skipping zero to three frames according to some external decision To reduce encoding delays, ITU-T H.261 supports intracoding macroblocks rather than pictures, requires Table MPEG-4 Standard Profiles Profile Objects Simple Visual Simple Scalable Visual Core Visual N-bit Visual Scalable Texture Visual Core Scalable Advanced Scalable Texture Advanced Core Rectangular video objects Temporal and spatial scalable objects Arbitrarily shaped and temporally scalable Core visual, but 4–12 bits pixel depth Spatial scalable coding of still (texture) objects Temporal and spatially scalable arbitrarily shaped objects Arbitrarily shaped texture and still images Arbitrarily shaped video objects and still image objects Fine Granularity Scalability Truncation of bit stream at any bit position to adapt delivery quality as required Use Mobile networks Internet Internet multimedia Surveillance Games, still cameras Internet, mobile, broadcast Image browsing Interactive multimedia streaming over Internet Any DIGITAL VIDEO COMPRESSION STANDARDS intracoding of at least one macroblock in every 132 The picture structure is based on the Group of Blocks, I and P frames According to section 4.2.2: Each picture is divided into groups of blocks (GOBs) A group of blocks (GOB) comprises one twelfth of the CIF or one third of the QCIF picture areas (see Figure 6) A GOB relates to 176 pels by 48 lines of Y and the spatially corresponding 88 pels by 24 lines of each of CB and CR ITU-T H.261 supports motion compensation at only full pixel resolution ITU-T H.263 improves upon ITU-T H.261 by using half-pixel precision for the motion compensation and provides support for additional negotiable 547 coding options for improved compression performance A new ITU-T standard (tentatively named H.263+) is being developed in cooperation with the MPEG committee Proprietary Codecs Cinepak (http://www.cinepak.com) and Indeo from Intel (http://www.intel.com) are in common use in streaming media applications The Aware MotionWavelets codec (http://www.aware.com) is a wavelet-based codec using only intra-frame compression Qubit from Quvis (http://www.quvis.com) is a three-dimensional wavelet codec, which provides both spatial and temporal compression Note, in passing, that the wavelet-based codecs soften the brightness edges in a manner that some viewers and video editors find objectionable These issues Table Additional Well-Known Applications of Video Compression, Together with Requirements and Possible Solutions Application Requirements Possible Solutions Video Conferencing (PSTN) 352 × 288 pixels at 29.97 fps, 24-bit color Compress about 73 Mbps to 56.6 kbps in real time (about 1289:1) H.261, H.263, MPEG-4, Aware wavelet I frames Desktop Video Editing 1024 × 768 pixels at 29.97 fps, 24-bit color Store 120-min movie on 18-MB disk Compress about 468 to 18 MB (26:1) Cinepak, Indeo, MPEG-4, Aware wavelet I frames Digital Cinema 1920 × 1080 pixels at 24 fps, 30-bit color Qualcomm ABS DCT (http://www.qualcomm com) (Morley, 2000), Qubit (http://www.qubis.com) Transmit movie to theater over 45 Mbps line Compress 1.5 Gbps to 45 Mbps (33:1) Wireless Video One- and two-way scalable real-time video from 160 × 120 pixels monochrome to 640 × 480 with 24-bit color over network without QoS at 9.6 kbps (iMode) and up to Mbps (Universal Mobile Telecommunication System) Display video on small screens with low resolution and with 33–200 MHz requiring low power consumption for extended battery life MPEG-4 Visual with Dynamic Resolution Conversion, MPEG-4 Facial Animation wavelet video (http://www.packetvideo.com, http://www.envivio.com, http://www drfreedmaninc.com) Home Shopping Customer sees and hears personal sales assistant on television and then customer speaks via telephone to assistant in call center equipped with camera, encoder telephone, call routing, and graphics workstation MPEG-2 (Simple Profile), MPEG-4 (http://www iseetv.net, http://www.avaya.com) Science When the Galileo spacecraft High Gain Antenna failed to deploy close to Jupiter, the mission required compression of science and engineering data streams from 13.4 kbps to 10 bps for transmission via the S-band antenna See Cheung and Tong (1993) noting particularly the low complexity encoding on a small onboard processor The encoded imagery could be unpacked with higher computing power on Earth This situation is also relevant to two-way wireless video Medicine Remote medicine and telesurgery—Full motion virtual reality stereo video compression over fiber optic, Internet 2, or satellite links (subject to delays of up to a few seconds) See Riva, Gamberini, and Davide (2001) and a simulator at http://synaptic.mvc.acc.uk/home html 548 VIDEO COMPRESSION require further research Macromedia Flash Animation (http://www.macromedia.com) provides vector graphics animation suitable for cartoon applications Cartoons may be arbitrarily spatially scalable without loss of quality Qualcomm’s Adaptive Block Size Discrete Cosine Transform uses a combination of quadtree and discrete cosine transform methods (see Data Compression) to encode high quality imagery for digital cinema applications Lastly (Fisher, 1995), pointed out a number of mechanisms for encoding video sequences via fractal compression methods How Standards Are Defined and Described When an industry sector perceives the need for a new standard, it communicates this information to the national standards body, which in turn proposes it as a Table Hypothetical Broadband Video-on-Demand Business Model1 Digital Video Business Model Broadband VoD Revenue Year Year Year Year Year Year Avg Subs % who use VoD Avg users per day Conversion Rate (daily) purchases/day Average Purchase Monthly Subscription per Sub Gross purchase revenue per day Gross subscription revenue per day Gross revenue per day days in year Annual Gross Revenue Content Partner Revenue Share 10,297,000 2.4% 247,128 6.7% 16,558 $4.00 $8 $66,230.30 $65,900.80 $132,131.10 365 $48,227,853 52% 13,248,000 2.4% 317,952 6.0% 19,173 $4.00 $8 $76,690.02 $84,787.20 $161,477.22 365 $58,939,186 52% 16,410,000 2.4% 393,840 5.4% 21,110 $4.00 $8 $ 84,439.30 $105,024.00 $189,463.30 365 $69,154,103 52% 19,491,000 2.4% 467,784 5.0% 23,506 $4.00 $8 $94,024.58 $124,742.40 $218,766.98 365 $79,849,949 52% 22,535,000 2.4% 540,840 4.4% 23,554 $4.00 $8 $94,214.33 $144,224.00 $238,438.33 365 $87,029,990 52% 24,989,000 2.4% 599,736 6.7% 40,182 $4.00 $8 $160,729.25 $159,929.60 $320,658.85 365 $117,040,480 52% Content Partner Net Revenue Service Provider Avg Revenue Share $25,078,484 48% $30,648,377 48% $35,960,134 48% $41,521,974 48% $45,255,595 48% $60,861,049 48% Service Provider Net Revenue $12,037,672 $14,711,221 $17,260,864 $19,930,547 $21,722,685 $29,213,304 10% 24713 200,000,000 580,000 72 $10,000.00 $50.00 $716,671.20 $1,235,640.00 $1,952,311.20 $555,214.24 10% 31795 200,000,000 580,000 92 $4,996.17 $50.00 $460,677.48 $1,589,760.00 $2,050,437.48 $1,177,269.74 10% 39384 200,000,000 580,000 114 $2,496.17 $50.00 $285,097.01 $1,969,200.00 $2,254,297.01 $1,890,689.14 10% 46778.4 200,000,000 580,000 136 $1,247.13 $50.00 $169,182.57 $2,338,920.00 $2,508,102.57 $2,292,285.65 10% 54084 200,000,000 580,000 157 $623.09 $50.00 $97,727.43 $2,704,200.00 $2,801,927.43 $2,683,311.14 10% 59973.60 200,000,000 580,000 174 $311.31 $50.00 $54,143.36 $2,998,680.00 $3,052,823.36 $2,893,965.57 Capital Costs Maximum Concurrent Usage New Streams Required Server Capacity (bps) Bandwidth per stream (kbps) Number of New Servers Cost per Server Cost per Stream New Server Costs New Stream Costs Total Server Costs Amortized Server Costs Operating Costs Bandwidth Costs Purchases per year Average 120-min movie (MB) Total Usage (MB) Bandwidth costs ($ per MB) Total Bandwidth Costs Cost per Rack Unit Rack Units (2RU servers) Racking Costs Total Network Costs Number of CSRs VoD Staffing Costs per CSR Total Staffing Costs Equipment Maintenance BadDebt (@ 2% of Revenue) Marketing/Promotion Total Operating Costs P&L Balance Sheet 6,043,515 6,997,965 7,705,086 8,579,743 8,597,057 14,666,544 4176 4176 4176 4176 4176 4176 25,237,719,642 29,223,499,936 32,176,438,134 35,829,007,979 35,901,311,828 61,247,487,243 5.E-05 8.E-06 1.E-06 2.E-07 3.E-08 4.E-09 $1,261,886 $900 36 $32,250 $1,294,136 51 $16,000 $823,760 $71,667 $964,557.06 $482,278.53 $4,191,613.13 $222,924 $900 46 $41,493 $264,417 66 $16,544 $1,095,875 $46,068 $1,178,783.72 $589,391.86 $4,351,804.41 $37,447 $900 57 $51,396 $88,843 82 $17,106 $1,403,547 $28,510 $1,383,082.06 $691,541.03 $5,486,212.38 $6,362 $900 68 $61,046 $67,407 97 $17,688 $1,723,784 $16,918 $1,596,998.98 $798,499.49 $6,495,893.87 $7,846,059 $10,359,416 $11,774,652 $13,434,653 Boldface type indicates results while roman type indicates intermediate values $973 $253 $900 $900 78 87 $70,580 $78,266 $71,552 $78,519 113 125 $18,289 $18,910.00 $2,060,713 $2,362,710 $9,773 $5,414 $1,740,599.79 $2,340,809.59 $870,299.90 $5,852,023.98 $7,436,248.79 $13,533,442.09 $14,286,437 $15,679,862 DIGITAL VIDEO COMPRESSION STANDARDS work item to the whole international standards organization Once the work item has been approved, working groups of experts define the scope, then proceed to negotiate the technical details of the specification In the final phase, the voting members put the standard specification to a vote If successful, the specification is published as a new standard The standards are revised periodically The simplest approach to verification of the implementation of standards is through test models and compliance bit streams 549 Intellectual Property Issues Although a standard may be defined and published, practicing that standard may require licensing a number of patents essential to performance of the standard The MPEG LA organization (which grew out of the MPEG Intellectual Property Rights Group) maintains a list of about 20 patent holders who have decided to pool their patents for common licensing, a practice which has raised questions of antitrust law violation Although the licensor MPEG LA did not collect royalties on MPEG-1, it did Table Hypothetical iModeTM Live Customer Service Business Model Digital Video Business Model iMode Live Customer Service Year Year Year Year Year Year Avg Subs % who use customer service Avg users per day Conversion Rate (daily) purchases/day Average Purchase Monthly Subscription per Sub Gross purchase revenue per day Gross subscription revenue per day Gross revenue per day days in year 27,000,000 1.0% 270,000 1.0% 2,700 $20.00 $10 $54,000.00 $90,000.00 $144,000.00 365 41,600,000 1.0% 416,000 1.0% 4,160 $20.00 $10 $83,200.00 $138,666.67 $221,866.67 365 56,200,000 1.0% 562,000 1.0% 5,620 $20.00 $10 $112,400.00 $187,333.33 $299,733.33 365 70,800,000 1.0% 708,000 1.0% 7,080 $20.00 $10 $141,600.00 $236,000.00 $377,600.00 365 85,400,000 1.0% 854,000 1.0% 8,540 $20.00 $10 $170,800.00 $284,666.67 $455,466.67 365 100,000,000 1.0% 1,000,000 1.0% 10,000 $20.00 $10 $200,000.00 $333,333.33 $533,333.33 365 Annual Gross Revenue Content Partner Revenue Share $52,560,000 90% $80,981,333 90% $109,402,667 90% $137,824,000 90% $166,245,333 90% $ 194,666,667 90% Content Partner Net Revenue Carrier Revenue Share $47,304,000 10% $72,883,200 10% $98,462,400 10% $124,041,600 10% $149,620,800 10% $175,200,000 10% Carrier Net Revenue Capital Costs Maximum Concurrent Usage New Streams Required Server Capacity (bps) $4,730,400 $7,288,320 $9,846,240 $12,404,160 $ 14,962,080 $17,520,000 10% 27000 200,000,000 10% 41600 200,000,000 10% 56200 200,000,000 10% 70800 200,000,000 10% 85400 200,000,000 10% 100000.00 200,000,000 Bandwidth per stream (kbps) Number of New Servers Cost per Server Cost per Stream New Server Costs New Stream Costs Total Server Cost Amortized Server Costs $10,000.00 $50.00 $10,000.00 $1,350,000.00 $1,360,000.00 $452,000.00 $4,996.17 $50.00 $0.00 $2,080,000.00 $2,080,000.00 $1,145,333.33 $2,496.17 $50.00 $0.00 $2,810,000.00 $2,810,000.00 $2,082,000.00 $1,247.13 $50.00 $0.00 $3,540,000.00 $3,540,000.00 $2,812,000.00 $623.09 $50.00 $0.00 $4,270,000.00 $4,270,000.00 $3,542,000.00 $311.31 $50.00 $0.00 $5,000,000.00 $5,000,000.00 $4,270,000.00 Operating Costs Bandwidth Costs Sessions per year 985,500 1,518,400 2,051,300 2,584,200 3,117,100 3,650,000 Average call (128-byte packets) 600 600 600 600 600 4176 Total Usage (packets) 591,300,000 911,040,000 1,230,780,000 1,550,520,000 1,870,260,000 15,242,400,000 Bandwidth costs ($ per packet) 3.E-02 4.E-03 6.E-04 9.E-05 1.E-05 2.E-06 Total Bandwidth Costs $15,373,800 $3,613,811 $744,840 $143,158 $26,345 $32,757 Cost per Rack Unit $900 $900 $900 $900 $900 $900 Rack Units (2RU servers) 0 0 Racking Costs $450 $0 $0 $0 $0 $0 Total Network Costs $15,374,250 $3,613,811 $744,840 $143,158 $26,345 $32,757 Number of CSRs 135 208 281 354 427 500 Vod Staffing Costs per CSR $16,000 $16,544 $17,106 $17,688 $18,289 $18,910.00 Total Staffing Costs $2,160,000 $3,441,152 $4,806,786 $6,261,552 $7,809,403 $9,455,000 Equipment Maintenance $1,000 $0 $0 $0 $0 $0 BadDebt (@ 2% of Revenue) $1,051,200.00 $1,619,626.67 $2,188,053.33 $2,756,480.00 $3,324,906.67 $3,893,333.33 Marketing/Promotion $525,600.00 $809,813.33 $1,094,026.67 $1,378,240.00 $1,662,453.33 $9,733,333.33 Total Operating Costs $19,564,050.00 $10,629,736.69 $10,915,706.27 $13,351,429.72 $16,365,107.75 $27,384,423.37 P&L Balance Sheet $27,739,950 $62,253,463 $87,546,694 $110,690,170 $133,255,692 $147,815,577 550 VIDEO COMPRESSION DIGITAL VIDEO BUSINESS MODELS on MPEG-2 and has proposed a licensing scheme for MPEG-4 that includes an hourly usage fee that could amount to as much as $0.25 per hour per user ITUT maintains a patent database (http://www.itu.int/ITUT/dbase/patent/) and, in general, prospective developers must negotiate with patent holders for license terms Video-on-Demand over Broadband Networks In this application, customers request movies delivered via cable modem or digital subscriber line service to their personal computer Brief inspection of the Intertainer Web site (http://www.intertainer.com) shows that full screen (800 × 600 pixels), full motion movies encoded at about 500 kbps are currently delivered via the Windows Media platform at 580 kbps or higher including overheads so that a 120-min movie causes almost GB of data transfer Table shows a hypothetical business model for a movie-on-demand service delivered in the United States DIGITAL VIDEO APPLICATION SOLUTIONS Table extends Table by indicating additional wellknown applications of video compression, together with requirements and possible solutions Table Hypothetical FOMA Live Adult Service Business Model Digital Video Business Model FOMA Live Adult Service Year Year Year Year Year Avg Subs % who use VOD service Avg users per day Conversion Rate (daily) purchases/day Average Purchase Monthly Subscription per Sub Gross purchase revenue per day Gross subscription revenue per day Gross revenue per day days in year 55,000 75.0% 41,250 0.8% 342 $25.00 $10 $8,559.38 $13,750.00 $22,309.38 365 235,000 75.0% 176,250 0.8% 1,463 $25.00 $10 $36,571.88 $58,750.00 $95,321.88 365 415,000 75.0% 311,250 0.8% 2,583 $25.00 $10 $64,584.38 $103,750.00 $168,334.38 365 595,000 75.0% 446,250 0.8% 3,704 $25.00 $10 $92,596.88 $148,750.00 $241,346.88 365 775,000 75.0% 581,250 0.8% 4,824 $25.00 $10 $120,609.38 $193,750.00 $314,359.38 365 955,000 75.0% 716,250 1.0% 7,163 $20.00 $10 $143,250.00 $238,750.00 $382,000.00 365 Annual Gross Revenue Content Partner Revenue Share Content Partner Net Revenue Carrier Revenue Share Carrier Net Revenue Capital Costs Maximum Concurrent Usage New Streams Required Server Capacity (bps) Bandwidth per stream (kbps) Number of New Servers Cost per Server Cost per Stream New Server Costs New Stream Costs Total Server Costs Amortized Server Costs $8,142,922 90% $7,328,630 10% $732,863 $34,792,484 90% $31,313,236 10% $3,131,324 $61,442,047 90% $55,297,842 10% $5,529,784 $88,091,609 90% $79,282,448 10% $7,928,245 $114,741,172 90% $103,267,055 10% $10,326,705 $139,430,000 90% $125,487,000 10% $12,548,700 10% 4125 200,000,000 384 $10,000.00 $50.00 $10,000.00 $206,250.00 $216,250.00 $70,750.00 10% 17625 200,000,000 384 35 $4,996.17 $50.00 $0.00 $881,250.00 $881,250.00 $364,500.00 10% 31125 200,000,000 384 61 $2,496.17 $50.00 $0.00 $1,556,250.00 $1,556,250.00 $883,250.00 10% 44625 200,000,000 384 88 $1,247.13 $50.00 $0.00 $2,231,250.00 $2,231,250.00 $1,558,250.00 10% 58125 200,000,000 384 114 $623.09 $50.00 $0.00 $2,906,250.00 $2,906,250.00 $2,233,250.00 10% 71625 200,000,000 384 141 $311.31 $50.00 $0.00 $3,581,250.00 $3,581,250.00 $2,906,250.00 124,967 115200 533,949 115200 942,932 115200 1,351,914 115200 1,760,897 115200 2,614,313 4176 14,396,184,000 4.E-04 $5,614,512 $900 $3,650 $5,618,161 $3,664,315 $1,000 $162,858.44 $81,429.22 $9,598,513.80 61,510,968,000 6.E-05 $3,659,922 $900 17 $15,593 $3,675,516 $15,656,618 $0 $695,849.69 $347,924.84 $20,740,408.17 108,625,752,000 9.E-06 $986,068 $900 31 $27,537 $1,013,605 $27,648,921 $0 $1,228,840.94 $614,420.47 $31,389,037.70 155,740,536,000 1.E-06 $215,690 $900 44 $39,481 $255,172 $39,641,224 $0 $1,761,832.19 $880,916.09 $44,097,394.00 202,855,320,000 2.E-07 $42,862 $900 57 $51,425 $94,287 $51,633,527 $0 $2,294,823.44 $1,147,411.72 $57,403,299.52 10,917,369,000 3.E-08 $352 $900 70 $63,369 $63,721 $62,743,500 $0 $2,788,600.00 $6,971,500.00 $75,473,571.15 −$2,269,884 $10,572,828 $23,908,804 $35,185,054 $45,863,755 $50,013,429 Operating Costs Bandwidth Costs Sessions per year Average 5-min call (128-byte packets) Total Usage (packets) Bandwidth costs ($ per packet) Total Bandwidth Costs Cost per Rack Unit Rack Units (2RU servers) Racking Costs Total Network Costs Number of CSRs Total Staffing Costs Equipment Maintenance BadDebt (@ 2% of Revenue) Marketing/Promotion Total Operating Costs P&L Balance Sheet Year REFERENCES The number of subscribers is based on the projected number of broadband users from Lathen (1999); the usage of video on demand (VoD) is projected from the Broadwing Investor Relations (1999) report on the usage of the Cincinnati Bell Zoomtown movie-on-demand system; the buy rates and studio paybacks are based on the most conservative model described in Video on Demand 2001 (2001) Projected server and stream costs are those indicated by Real Media (http://www.real.com) combined with Moore’s Law (costs halve in 18 months) with software costs amortized by straight line depreciation over three years and hardware costs depreciated over five years; bandwidth and racking costs are from the New York Band-X exchange with double Moore’s Law (costs halve in months); staffing profile of customer service representative (CSR) per 200,000 customers with burdened labor rate similar to the minimum wage in the United States and relatively conservative marketing and promotional costs of 1% gross revenue Customer Relationship Management over Third Generation Mobile Networks As the saying goes, “People prefer to buy from people they trust.” Many people trust information presented visually Video-enabled commerce, developed independently by Avaya (http://www.avaya.com) and Media Logic Systems Ltd (http://www.iseetv.net) can facilitates sales, develop customer relations, and prevent churn Lucent Technologies (1996) announced a multimedia call center which makes skilled employees available to customers at remote computers and kiosks via H.320 and T.120 video conferencing links over telephone lines According to Lucent “video infomercials can educate or market the caller while in queue or on hold.” Table shows a hypothetical business model for a live video customer service application in Japan using MPEG-4 facial animation at 2000 bps (Tekalp and Ostermann, not dated) delivered over NTT DoCoMo iMode screen phones with 9.6 kbps connectivity Bandwidth costs and revenue share are based on the current iMode pricing model together with double Moore’s Law cost reduction Subscriber numbers are based on a current figure of 27,000,000 adding 40,000 subscribers per day (from http://www.imode.com) Table shows a hypothetical business model for a live video adult services application in Japan using ITU-T H.261 over H.324 terminals at 384 kbps delivered over the freedom of mobile multimedia access (FOMA) packet-switched system Bandwidth costs and revenue share are based on the current FOMA pricing model (Imazu & Kuroda, 2001) together with double Moore’s Law cost reduction Subscriber numbers are based on a current figure of 55,000 (Ovum Research, 2002) adding 15,000 subscribers per month CONCLUSION AND FUTURE OUTLOOK Three significant business opportunities have been presented with hypothetical business models together with areas for future progress in video compression research It 551 may be thought that the advent of high-performance highbandwidth connection such as Internet2 would obviate the need for video compression However, we have seen that increased availability leads to increased demand for bandwidth with applications such as remote telesurgery leading the way The primary risks in the video compression field relate to ongoing patent litigation Since “people prefer to buy from people” and many people trust information presented visually, video compression facilitates commerce by providing a significant component of infrastructure for visual electronic communications More research is need in the areas of one and two-way mobile videoconferencing together with significant improvements of compression methods and more liberal licensing agreements GLOSSARY Frame Image from video sequence Hyperspectral Recorded in multiple spectral bands Lossless Reversible, exact Lossy Irreversible, approximate Scene Sequence of frames CROSS REFERENCES See Data Compression; Speech and Audio Compression REFERENCES Aho, J (2002, April 13) A quick guide to digital video resolution and aspect ratio Conversions Retrieved May 8, 2002, from http://www.iki.fi/znark/video/conversion American National Standards Institute (1996) Digital transport of one-way video signals-parameters for objective performance assessment [ANSI T1.803.03– 1996] Retrieved May 11, 2002, from American National Standards Institute Web site, http://www.ansi org Bell, S., Diaz, B., Holroyd, F., & Jackson, M (1983) Spatially referenced methods of processing raster and vector data Image and Vision Computing, 1(4), 211–220 Bormans, J., & Hill, K (2000) MPEG-21: Defining and standardising a multimedia framework Retrieved August 15, 2002, from MPEG Web site, http://mpeg telecomitalialab.com/documents/ibc2000 tutorial/ Bormans files/frame.htm Broadband Week (2002, March 1) Broadband direct [NTT Docomo sees Million 3G Subscribers by 2004] Retrieved May 10, 2002, from Broadband Week Web site, http://www.broadbandweek.com Broadwing Investor Relations (1999, October 22) Cincinnati bell delivers strong revenue and margin growth [press release] Retrieved May 12, 2002, from Broadwing Investor Relations Web site, http://investor broadwing.com/news/19991022–13188.cfm Cheung, K., & Tong, K (1993, April 2) Proposed data compression schemes for the Galileo S-Band contingency mission Paper presented at the 1993 Space and Earth Science Data Compression Workshop, Snowbird, Utah Chiariglione, L (1996) Coding of moving pictures and associated audio for digital storage media at up to about 1, Mbit/s [Short MPEG-1 description] Retrieved 552 VIDEO COMPRESSION May 12, 2002, from MPEG Web site, http://mpeg 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Face and 3-D mesh animation in MPEG-4 Retrieved May 12, 2002, from MPEG Synthetic/Natural Hybrid Coding Web site, http://leonardo.telecomitalialab.com/icjfiles/mpeg-4 si/8-SNHC visual paper/8-SNHC visual paper.htm Teranex (2002) Correct cadence [Application Note] Retrieved August 15, 2002, from Teranex Web site, http://www.teranex.com/pdf/01-TER-152 Correct Cadence App Note.pdf Video on demand 2001 (2001) Carmel, CA: Paul Kagan Associates, Inc Webster, A., Jones, C T., Pinson, M H., Voran, S D., & Wolf, S (1993, February) An objective video quality assessment system based on human perception Paper presented at Human Vision, Visual Processing, and Digital Display IV, San Jose CA Retrieved May 11, 2002, from CiteSeer, http://citeseer.nj.nec.com/ webster93objective.html ... 19 70 19 80 19 85 19 90 19 95 19 96 19 97 19 98 19 99 2000 25 .3 69 .3 16 5.8 2 86. 0 32 7.2 457.2 550 .3 5 96. 5 61 8 .2 62 6.4 65 0.4 69 8.8 2 .1 6. 8 17 .9 10 5 .3 11 8 .1 2 63 . 4 4 06. 2 435 .6 439 .6 442.5 455.4 475.8 Source:... Tickets—museum or festival Cruise Tickets—tour or excursion 80% 62 46 27 13 16 NA 77% 57 37 25 21 18 13 14 11 NA NA 12 11 6 Source: TIA (2002a) Trend #3 Changing Forms of Information Technology as a Medium... of U.S Travelers 19 97 19 98 19 99 2000 20 01 2002 18 25 30 33 31 21 33 40 46 45 Source: TIA (2002a) the number of Web sites, Web pages, and online sales volume (Werthner & Klein, 19 99) Indeed, recent