[M4IF Discuss] News: RealNetworks: MPEG-4 could be DOA

[Craig Birkmaier]

http://zdnet.com.com/2100-1105-892259.html
RealNetworks: MPEG-4 could be DOA
By Stefanie Olsen
Special to ZDNet News
April 25, 2002, 11:55 AM PT
LOS ANGELES--Proposed licensing fees for MPEG-4, a next-generation 
video compression standard, could mean its early death on the 
personal computer, RealNetworks CEO Rob Glaser said in a press 
conference Wednesday.
"The licensing structure is putting the technology on a path to 
become irrelevant in the PC industry," Glaser said after giving a 
keynote speech at the Streaming Media West conference here.
His remarks address a fee structure put forth in early February by 
MPEG LA, a licensing body representing 18 patent holders of the 
technology. Still under consideration by the group, the plan would 
require licensees to pay 25 cents for each MPEG-4 product, such as an 
encoder or decoder, with fees capped at $1 million a year. The plan 
also suggests charging a per-minute use fee, equivalent to 2 cents 
for each hour encoded in the format, that includes content on DVDs.
Such fees would make it cost prohibitive for media players such as 
RealNetworks' RealOne or Apple Computer's QuickTime to support the 
emerging standard. Apple immediately rejected the proposed licensing 
terms, leaving the future of its QuickTime multimedia technology in 
limbo.
The licensing impasse over MPEG-4 could help Microsoft, which has 
refused to sign on to the standards effort. Even if acceptable terms 
are eventually hammered out, the delay will give Microsoft more time 
to push its proprietary Windows Media format.
MPEG-4 is the successor to MPEG-1 and MPEG-2, technologies behind 
digital broadcast transmissions over cable, satellite and the 
Internet. Like its predecessors, MPEG-4 comprises audio and video 
technologies that condense large digital files into smaller ones that 
can be easily transferred via the Web. It also adds such features as 
interactivity, e-commerce and digital rights management to audio and 
video files.
RealNetworks is pursuing a dual strategy, Glaser said, partly to 
offset uncertainty over MPEG-4's future in light of the licensing 
issue. The company's proprietary media player system, RealSystem, 
supports MPEG-1 and MPEG-2 as well as MPEG-4. Meanwhile, the company 
on Wednesday backed the new standard by launching a site that 
promotes interoperability between different codecs, or video and 
audio compression and decompression technology.
Larry Horn, vice president of licensing and business development at 
MPEG LA, said he disagrees with Glaser's assessment, saying "it's 
premature" since the group is still defining the licensing terms.
"Final terms of the license have not yet been developed, and we're 
working on them," Horn said. "The marketplace can see that the patent 
holders are working hard to address some of the concerns, and we will 
come up with a license that is acceptable to the marketplace and 
everything should work out just fine."
Horn said MPEG LA and patent holders met last week to discuss the 
concerns of prospective licensees as well as alternate royalty 
approaches. The group is considering, for instance, use-based 
payments that place royalties on products and services that receive 
remuneration, such as encoding MPEG-4 for DVDs. Horn said he expects 
a final licensing structure to be in place in a few months.
Some streaming media experts said there are few signs so far that 
MPEG LA feels pressured to drastically overhaul the proposed 
licensing structure.
"Given the fact that the media player companies bear the brunt of 
these licensing fees--they would have to pay the encoding and 
decoding fees--I wonder if MPEG LA is listening," said Derek Top, 
managing editor of Streaming Media Research.
News.com's Gwendolyn Mariano contributed to this report.
-- 
Regards
Craig Birkmaier
Pcube Labs