What are MS betting on with VC-1?

From their own website:

"VC-1 minimizes the complexity of decoding HD content through improved intermediate stage processing and more robust transforms. As a result, VC-1 decodes HD video twice as fast as the H.264 standard, while offering 2-to-3 times better compression than MPEG-2. * VC-1 offers superior quality across a wide variety of content types and bit rates, which has been well documented by independent sources: * DV Magazine found VC-1 to be superior to both MPEG-2 and MPEG-4. * TANDBERG Television found VC-1 produces significantly better quality than MPEG-2 and comparable quality to H.264. These results were presented at the 2003 International Broadcasting Convention (IBC). ...."

What does that mean? MS say only that VC-1 quality is better than older MPEG4 codecs and that decoding is faster than H.264. MS are even admitting that VC-1 quality is slightly worse (=comparable) than H.264. Alle of these statements are proposed to be valid for HD only.

MS are clearly betting on once more finding the successful compromise. Although they might be wrong in spite of all the mistakes MPEG has made and will continue to make MS will still grab a significant if minority share of that market.

As to proprietary vs open vs standard: VC-1 and H.264 are both controlled and owned technologies with H.264 being able to claim the advantage of being owned by many greedy companies while VC-1 is dominantly owned by MS.

It is a pity that Theora cannot compete. I will follow closely what the BBC will be doing with DIRAC.

What will really happen in the Box world is multicodec chippety chip - see here - for example (in German). VLC Player is doing this on PCs already.