VC-1 is a video codec standard. Its most popular implementation is Windows Media Video 9. It is an evolution of the conventional DCT-based video codec design also found in H.261, H.263, MPEG-1, MPEG-2, and MPEG-4. It is widely characterized as an alternative to the latest ITU-T and MPEG video codec standard known as H.264/MPEG-4 AVC. VC-1 contains coding tools for interlaced video sequences as well as progressive encoding. The main goal of VC-1 development and standardization is to support the compression of interlaced content without first converting it to progressive, making it more attractive to broadcast and video industry professionals.
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A key issue on VC-1 is the external standardization as SMPTE 421M. Where the ITU is heavily dominated by government, telecommunications and computer industries, the SMPTE (Society of Motion Picture and Television Engineers) serves the specific standization needs of the film and television industries.
VC-1 is being adapted to the internal needs of broadcasters to handle legacy composite NTSC and PAL (i.e. interlace and transparent transcoding) as well as current and future digital broadcasting and motion picture production standards.
The broadcasters and television equipment manufacturers made it clear to Microsoft that WM9 would be considered only if standardization was moved external to Microsoft. Competition exists in the form of numerous custom MPeg4 implementations.
Microsoft is interested in this market for prestige and because they are willing to pay higher licensing fees than the typical Microsoft customer.