J2K TODAY

One of the benchmarks of technology adoption is when the venture capital market becomes aware of the opportunity and backs that position up with investment. So, what do VCs think of JPEG2000? Hard to say at this point as I have yet to see a public announcement around a VC based investment specifically guided towards JPEG2000. There have been a number of investments being made in digital cinema, but that too is rather difficult to classify.

Be it known, we have decided to test the VC waters at BroadMotion. We are strong believers in both JPEG2000 and the advantages our technology brings to the encoding/decoding process for the format. It’s always a tough call whether to pursue external investment because that process introduces new headaches to running a business. However, we decided that if our time-to-market could be accelerated then it was worth further exploration.

On the Road Again 

I will not go into too many details about our specific activities primarily because we want to keep that private. But I can say that we have spent the past month or so pitching our plan and ideas to VCs located in Vancouver and the Valley (San Jose, Palo Alto, Menlo Park). In and of itself, this has been a great learning experience because it really forces you to refine your business model, optimize your value proposition and hone your presentation skills. We had an opportunity to pitch to many groups located in the Valhalla of venture capital…that being Sand Hill Road in Menlo Park.

If you ever get a chance to pitch a business plan to one of the top tier VCs in the Valley I highly recommended the experience. You will encounter some of the best technical minds with the business savvy to back it up. We could go into a long debate on the efficiency of the venture capital market, but its their money and their rules…go play the game. These guys are smart and you need to be extremely prepared on every detail of the market, your business and your technology.

Big Picture

But do they know much about JPEG2000? In terms of the technical specifics of J2K, I would conclude the VCs lacked knowledge of the format. But that’s to be expected, their focus is a few levels above that. More importantly they recognize a number of big trends that are making JPEG2000 an interesting technology play:

1. Bandwidth as a point of friction is dropping rapidly (as is processing power)
2. Video is being moved around from point to point and to lots of different devices, it’s now common behavior
3. Video quality is becoming increasingly more important now that capable displays are within reach of everyday consumers

That said, the value proposition of JPEG2000 as it applied into specific solutions for various markets is really quite compelling. Does that make it viable for investment…time will tell. If it was 1999 and you had the ability to invest in an online music service that was coupled with a trendy and expensive device would you take it?

P.S. - Good Eats and Drinks

Special Kudos to Vino Locale in Palo Alto (www.vinolocale.com). We snuck into this beautiful victorian house after a long day of meetings. Randy, the owner, introduced us to the wine producers of the Santa Cruz valley. He made fantastics selections for us that we nicely paired with small plates that were absolutely delicious. If you get into the Palo Alto for dinner, make a stop there and tell Randy that Chris and Jeff sent you.

The most common question I get asked about JPEG2000 is, “That’s JPEG, right”? It’s a natural question really; I’d probably assume the same thing if I wasn’t in the image compression business. And as most people aren’t “in” the image compression industry, that’s why it gets asked a lot. In my opinion, it is the single biggest reason why JPEG2000 has not taken off the way it should, but that’s slowly changing.

So why did they call it JPEG2000? JPEG stands for Joint Photographic Experts Group, which is the name of the committee responsible for the formation of the original JPEG standard. Work on JPEG began in 1982, culminating with the publishing of the standard in 1992 after which people started widespread adoption.

The foundation of JPEG compression is based on DCT (Discrete Cosine Transfer), which at the time, was “cutting edge” in compression theory and technology. JPEG has enjoyed tremendous success since; it is the most widely used compression format for continuous tone (full color) images on the planet. It has found itself at home on the web, handheld devices such as digital cameras, cell phones, iPods, scanners, printers and just about anywhere you have full color images. And because of it’s widespread use and adoption most people know the name and are familiar with it. So, when they hear “JPEG2000”, they naturally assume “That’s JPEG, right”?

Regarding JPEG2000, the only thing similar between it and JPEG is that the same ISO committee was involved in its development and standardization! The underlying technology at the heart of JPEG2000 is based on DWT (Discrete Wavelet Transform) compression which is fundamentally different from the DCT used in JPEG. In fact, it is an order of magnitude more complex and offers a rich set of features not found in JPEG or in any other ISO still image formats.

JPEG2000 is to JPEG as the internal combustion engine was to the steam engine. The steam engine got things started but the world really changed after the internal combustion engine gained widespread use.

JPEG2000 solves many of the limitations found in standard JPEG. It has interactive client/server features, functions extremely well in noisy environments such as wireless channels, offers both lossless and lossy compression in the same codec and on average yields 40% smaller file sizes when compared to JPEG images compressed to the same quality level. So all the shortcomings of standard JPEG are solved with JPEG2000 and then some.

So the ISO committee did a great job on the technology but missed horribly on the name. In the long run, I do not think the name will be a factor but clearly in the short term it sure has caused a lot of confusion in the marketplace.

Could they have chosen a different name which may have resulted in less confusion and helped drive adoption? I think so, and most people I have spoken with in the JPEG2000 business all agree. The similarity in names has resulted in the need for continual market education and that is always an expensive process!

So the next time someone asks you “Have you heard of JPEG2000”, you’ll know not to answer “That’s JPEG, right”?