[M4IF Discuss] sniff sniff

[Craig Birkmaier]

At 3:06 PM -0500 2/4/02, Jeff Handy wrote:
>  > While I know it is every patent holders dream to get a piece
>>  of the content pie,
>
>
>That's just it.  In our case, we don't charge for content.  Its part of
>the whole package.  Then there comes the question of: how important is
>that piece?  If we have to pay a use fee every time someone wants to
>view their lectures, we'll end up sticking with QuickTime.  I really
>don't want that.  I want my cake and to eat it in one big gulp.  Why not
>use the same licensing model as MPEG-2?  Its not perfect, but it works
>well enough for the bandwagon to move.  Or why not limit the use charge
>to a percentage rather than a flat rate - say .0002 percent of proceeds?
>But then I can see objections there too.  How did MPEG-2 ever make it
>off of the ground??
>

There was a high level of commitment (and involvement) among 
companies that needed MPEG-2 to realize the benefits of digital 
compression. Many of the companies involved with commercial 
implementations also participated in the development process and have 
essential IP in the royalty pool.
There were two key areas that helped get MPEG-2 off the ground:
1. DBS, which needed the bandwidth conservation benefits to compete with cable.
2. DVD-V which needed the bandwidth conservation benefits to fit a 
high quality movie onto an optical disc.
In both cases, the tools in MPEG-2 to encode interlaced  ITU-R BT 601 
source was a key consideration.
With DBS it was quite simple to deal with the decoder royalty as it 
was collected by the chip vendors. This was also true for DVD-V 
players.
And with DVD, the "usage fee" is collected by the disc replicators, 
which is quite easy to administer.
It is also worth noting that the CE manufacturers who have used 
MPEG-2 have long been accustomed to paying royalties for essential 
patents. In fact, it is part of the culture. We have seen this time 
and again with VHS, CD-Audio, DVD, video games, etc. It is also worth 
noting that cable, DBS and DTV broadcasters have never paid usage 
fees for a basic video distribution technology (they have paid Dolby 
royalties on some essential audio technology - but not usage fees).
But the Internet and streaming media have evolved in a much different 
culture. One way of portraying this is that essential technology is 
frequently offered on a royalty free basis - at least for the mass 
market components; compensation for these essential patents is 
generally obtained via royalties on encoders and tools, or simply 
from the profits generated by reaching critical market mass.
MPEG-4 is thus caught in the middle of a cultural war. The old 
business model of licensing may no longer be an effective approach; 
the success of MPEG-4 is not assured, as there are competitive 
options.
-- 
Regards
Craig Birkmaier
Pcube Labs