[M4IF Discuss] FW: [M4IF News] RE: [OpenDTV] MPEG-4 Licensing analysis

Jordan Greenhall jgreenhall divxnetworks.com
Fri Feb 1 13:12:33 EST 2002


-----Original Message-----
From: Jordan Greenhall 
Sent: Friday, February 01, 2024 10:48 AM
To: 'Rob Koenen'
Subject: RE: [M4IF News] RE: [OpenDTV] MPEG-4 Licensing analysis
Rob,
In reference to your call for responses from service providers, DivXNetworks
cuts the gamut.  We are a technology provider, but we are also a service
provider (we actually deliver quite a bit of content over the Internet right
now for our content partners).  In this light, here are my immediate
thoughts:
1. Current license is a sweetheart deal for the Enterprise space.  Unless the
"use fees" somehow apply to teleconferencing and "e-learning", you are
looking at a very cheap license in that space.
2. Current license effectively kills broadcast and "streaming" markets,
possibly excluding VOD.  By example, an MSO using MPEG-4 to deliver 100
channels to 500,000 subs would run roughly $1.5M in "use fees" alone - or
roughly 9% of their gross margin.  Not a chance.  What is particularly
concerning as a service provider is the lack of distinction between different
content-monetization models.  Ad-supported broadcast video monetizes viewers
very differently than, say, VOD.  More specifically, a $0.02 per hour fee has
much less of an impact on a $20 per viewer WWF Smackdown PPV than it has on a
$0.30 per viewer ad-supported episode of Smallville.  This lack of
distinction in the license could have profound negative effects on the entire
market.
3. The decoder fee for software decoders is a big problem.  The model is
straight-forward: big companies (companies that can afford to pay a $1M cap
per year) can attempt to promote their MPEG-4 decoders in software.  Everyone
else is more or less out of the game.  I share the concern that when the
competition is proprietary technologies such as WMA and Real that give away
their software decoders for free, it is going to be difficult for MPEG-4
vendors to establish an adequate footprint to jumpstart the market.  I also
find it odd that the licensing fees are identical for encoders and decoders
when margins for those products are certainly *not* the same in the market.
In general, I match the consensus that licensing fees arranged more around
encoding than decoding or content would be considerably more likely to
promote the standard and generate the kinds of synergies necessary to ensure
its comprehensive success.  I look forward to the committee's release of
additional licensing models as the market develops over the coming year.
Jordan Greenhall
CEO
DivXNetworks


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