[M4IF Discuss] More Rampant Speculation

[Craig Birkmaier]

At 8:48 PM -0800 2/14/02, Rob Koenen wrote:
>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.

I agree in general with this. I would venture to say, however, that 
the consensus I have seen - both in the discussions on this list and 
in private responses to the questions I have raised -  is that the 
usaage fees are NOT workable in the marketplace. And some people are 
even questioning the encoder and decoder fees. The common thread is 
that it will be difficult for MPEG-4 to compete with royalty free 
products.
>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.

While I agree that we do not have the right to private information 
and discussions, I believe that it is important to understand the 
motivations behind the decisions made by MPEG-LA.
It is one thing to seek fair compensation for ones intellectual 
property. It is quite another issue if rights holders are attempting 
to seek unrealistic compensation, motivated by the desire to protect 
other business interests. In fact, in some cases it is illegal.
I am not trying to suggest that something illegal is taking place 
here, just  pointing out that there may be motivations OTHER THAN the 
desire to maximize the royalties collected via a license such as 
this. If the license terms are being structured to disadvantage 
MPEG-4, then we have a serious problem, and our feedback may fall 
upon deaf ears.
One must then decide how best to achieve the desired goal of fair and 
reasonable licensing terms, or determine that nothing can be done, 
and proceed with market development.
>  > 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

Thanks.
>  > 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 am trying to keep an open mind, however, the evidence suggests that 
we have a problem.
>
>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.

I agree that it is important to provide a well documented case to 
MPEG-LA. A case that substantiates that the current licensing terms 
are either unworkable, or at the very least, will severely 
disadvantage MPEG-4 in the marketplace. I am not suggesting that M4IF 
do otherwise.
My post was a not too thinly veiled attempt to gather information 
that may be useful in bringing pressure upon the MPEG-4 licensors, 
via other avenues, to give the technology a chance in the marketplace.
Sadly, I have had too many private responses that confirm my suspicions.
-- 
Regards
Craig Birkmaier
Pcube Labs