[M4IF Discuss] More Rampant Speculation

[Jordan Greenhall]

Good analysis Vladimir, but don't forget the other variables.  There are
free alternatives in the marketplace.  So its not good enough that the
scheme is logically sound, it also has to be effective against free
competition.
Finally, don't forget the significant friction generated by forcing
someone (a customer!) to change their billing / revenue / payment
models.  If a broadcaster has spent the past 20 years paying one-time
fees for broadcast equipment and then been able to use them for free, it
will not only take them by surprise to be presented with having to pay
to use them for MPEG-4 -- but it will also necessitate significant
changes to their internal accounting, billing, auditing, payment and
other processes.
J
-----Original Message-----
From: discuss-admin   lists.m4if.org [mailto:discuss-admin   lists.m4if.org]
On Behalf Of Levantovsky, Vladimir
Sent: Friday, February 15, 2024 8:03 AM
To: discuss   lists.m4if.org
Subject: RE: [M4IF Discuss] More Rampant Speculation
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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