The consumer entertainment market is going through a momentous transition, accelerating toward high-definition media, embracing advanced codec technologies and adding new forms of digital rights management (DRM) security for the new age of digital media.

Perhaps bearing the largest impact on high-definition video demand is the upcoming high-definition standard for DVD video, HD-DVD, which is set to be finalized later this year. Lower-cost flat-panel and projection displays, which are coming on the market at increasingly aggressive prices, are providing additional fuel for demand.

As we move into the new era of high definition, which occupies six times the bandwidth of standard video, momentum has increased substantially for advanced codec technologies that can efficiently compress the content.

The DVD Forum has created a new specification for HD-DVD that requires three codecs: WMV9, H.264 and MPEG-2. On balance, this decision was a victory for both WMV9 as well as H.264, boosting the validity of both next-generation codecs. Furthermore, many analysts anticipate that the enthusiast community will soon switch to WMV9, since it offers unparalleled tools for PC-based authoring, and now, assurance of support from future mainstream players.

The combination of Windows Media Video, the new HD-DVD standard and the increasing movement toward HDTV is creating demand for a new mixture of technologies. Adding the right mix of DRM components, front-end interfaces and system peripherals raises the bar even further.

Companies that have the skills to offer a strong combination of advanced codec technologies at high-definition levels will be able to compete for the majority of next-generation IPTV set-top boxes, digital media adapters, networked DVD players, portable media players and current HDTV products.

Thinh Tran, President, Chief Executive Officer and Chairman, Sigma Designs Inc.,Milpitas, Calif.