[M4IF Discuss] More Rampant Speculation

[Levantovsky, Vladimir]

Hello all,
I believe the conclusion on whether the proposed scheme works or not will
depend on making a determination on what the remuneration for the content
is. I would like to present different scenarios (as I see them) for
discussion:
1. Content is created to be sold "for profit" in multiple copies - DVDs,
CDs, etc.
Every copy sold will have generated revenue for the content creator and have
MPEG royalty as a part of its cost structure - the scheme works fine!
2. A video rental store bought DVDs (and paid royalties as part of the
price) and, in turn, generated revenues by renting the content on DVD for
viewing - according to the current license, no additional royalties due and
the scheme still works fine!
3. A cable company bought the same content and provided it for pay-per-view
programming - analog broadcast will resemble the previous video rental
(royalty free) business model. However, digital broadcast requires the
content to be encoded and then distributed to many viewers - will royalty be
due on the duration of the content (the scheme will work, but I don't
believe it's the provision of the current license) or royalty will be due on
"per viewer" basis - the scheme still may work because of the high profit
margin, but it's no longer competitive with analog broadcast and video
rentals in term of the cost structure.
4. A cable company broadcasts open channels. It does not resell the content
and charges its customers for the service. Applying same logic from the
previous scenario, analog broadcast programming is not subject to royalties
but digital broadcast is, and royalties will become significant part of the
profit margin. The proposed scheme will not work and even becomes a barrier
for adoption of the MPEG4 technology in the market.
5. A company (business, educational institution, etc.) created a content for
free distribution in multiple copies - DVDs, CDs - at their own expense! No
royalties due and the scheme works! They also engaged another company (Web
hosting service provider) to host the content for streaming and paid for the
services - again, an additional expense for them. According to proposed
scheme, the hosting company is now considered to receive remuneration for
the distribution of MPEG4 content - a service they provide regardless of
what the content is - and is obligated to pay royalties! (which is just an
additional expense for content creator) - the scheme doesn't work and it's a
show-stopper for MPEG4 adoption.
Based on the analysis of these scenarios, it seems to me that a careful
consideration should be given to the definition of "remuneration for the
MPEG4 content" in order for the proposed royalty structure to work and not
to be a burden for those who want to adopt MPEG4 standard.
Thank you,
Vladimir Levantovsky
-----Original Message-----
From: Rob Koenen [mailto:rkoenen   intertrust.com]
Sent: Thursday, February 14, 2024 11:48 PM
To: 'Craig Birkmaier'; discuss   lists.m4if.org
Subject: RE: [M4IF Discuss] More Rampant Speculation
Craig, all,
I don't see why it is our business to understand how the licensors
(not "how MPEGLA") come to their decisions. It is our business to 
discuss if these decisions work in the market. 
Yes, ther is a great deal riding on this, but it rides on the terms 
themselves, not on the process that created them. 
This is in the same category as discussing which internal processes 
led Apple to come to its recent decision on MPEG-4 licensing, or 
which process led to Envivio's MPEG-4 pricing. 
> How many of the companies with patents that are essential to MPEG-4 
> visual also hold essential patents to MPEG-2?

That's easy. Compare
http://www.mpegla.com/news_release31Jan2002.html
and http://www.mpegla.com/l_patentlist.html
> ISO/MPEG and the ITU have formed the Joint Video Team to develop a 
> new video codec for MPEG-4, currently called 26L. Based on 
> information I have seen, there appears to be a desire by many parties 
> to offer this codec on a royalty free basis.

There exists a common desire by many parties to have MPEG-4 free of
royalties, too. Draw your own conclusions.
I would like to keep the discussion to understanding if the currently
announced scheme works or not. To understand such, I would like to see
concrete examples, especially for claims that it doesn't work. E.g., I
recently heard someone claim that for a specific example with a short
clip + advertisement, the royalty would be 90% of the profit margin.
(Checking that one now). That's the kind of calculations I like to see.
Best,
Rob
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