Raystream tells me they’ve got a new proprietary video compression that can chop down the size of streaming HD video an average of 70%, without a loss of quality. You know me, I’m skeptical about numbers that large so I did some further investigation.

The crux of the Raystream claim is their new compression algorithm, which of course we can’t peak into since it basically amounts to the whole basis for their company. But they say that there is no loss of quality in the compression. It’s a pretty big claim if you ask me.

HD Video Streaming Bandwidth Reduced 70%?

Then again, remember when Netflix branched out to Canada and was fighting against the metered bandwidth as a lot of people weren’t streaming and so Netflix dropped their stream size around 70% with a ‘mild impact on quality’? They obviously accomplished a pretty large feat in that, but again lost some quality.

Here is what Raystream says they can do:

Before Raystream, a one hour video converted to 720p using the best compression algorithms resulted in files in excess of 1 GB, far too large to be streamed over commercial Internet connections.

Using Raystream, the same one hour 720p video can be compressed up to 90% of its original file size, which makes it easily streamable over connection speeds ranging from 0.4 to 1.0 Mbs per second.

Now do you see why I’m skeptical? It’s a pretty bold statement. If it holds up, it could certainly do wonders for online video streaming and with the dawn of Ultra HD, which is coming faster than you might think, this could be the way that we all have amazingly clear and fast video streams without all the buffering or massive bandwidth needs.

In fact, I can see companies like AT&T attempting to buy this up and make it so expensive that most won’t use it. As you know AT&T and Verizon are bucking for bandwidth metering themselves and both have already set bandwidth caps on their “unlimited” users. If Raystream compression comes into widespread use, it could simply kill their plans. That would be great for consumers and online video services alike, but I wouldn’t put it past them to buy it up and try to limit its adoption.

So far, only edgefactory OMNIMEDIA (EMMY nominated special event video producition firm) and Laterna Magica (European video ad production company) have signed up with Raystream to date, but as word spreads, I imagine a large number of video editing software companies like Sorenson, Avid, Adobe and Corel and transcoding services like Zencoder and Encoding.com could be looking into incorporating this in the very near future. After all, we all want faster video streaming, better quality and lower bandwidth usage, don’t we?

I’m talking with Raystream to get more information on their product and a demo. If their claims hold up under scrutiny, you can bet your backside I’ll be carrying a torch for them.