The Boston Globe has a Business feature today on a local company’s efforts to create a compression format several times better than the current standard for movie downloads on the Internet (mpeg-4). Below is a selection from the article by Hiawatha Bray (which will not be available for long–the Globe archives its stories and requires payment).

A Concord company called Euclid Discoveries says it has invented a video-compression technology that could spawn a lucrative new market for Hollywood or a major new crisis.

The firm says its EuclidVision system can compress digital images to make them much smaller than today’s most common compression technologies, MPEG-2 and MPEG-4,which were created by the Motion Picture Experts Group. MPEG-2 is the compression system used on today’s DVD movie disks. MPEG-4 is a next-generation system that can reduce the size of a movie even further.

But EuclidVision promises to squeeze video files more than ever before. Euclid Discoveries chief executive Richard Wingard said EuclidVision will let movie companies shrink a video so small that it becomes easy to distribute films over the Internet. He said that his company has filed 15 US patents on its compression system and is in discussions with a number of companies to bring it to market.

That could be good news for Hollywood, which launched new services last week to sell downloadable copies of recent films. Reducing the size of these downloads could boost Internet movie sales. But it could also popularize Internet movie piracy, just as MP3 music compression caused a global boom in illiicit music downloads.

It will be interesting to see whether the EuclidVision codecs will become available for use in programs like Sorenson Squeeze, or whether Euclid will be offered only as a stand-alone solution at greater cost to developers.