[M4IF Discuss] Summary of Discussion

[Peter Haighton]

Hello Everyone,
As the creator and moderator of the MPEG-4 Industry Forum email lists, it
is time to provide a brief summary of the discussion so far. I hope this
will refresh some memories, and inform those who recently joined this
list.
First some information about this list. The list was developed so that
list subscribers could discuss non-technical issues related to MPEG-4.
Issues of a technical nature can be discussed on a sister list known as
technotes (technotes   lists.m4if.org). To subscribe to any of these public
lists plus an additional one, see http://www.m4if.org/publiclistreg.html.
This list has an archive of all emails sent to date and you can find the
archive at http://lists.m4if.org/pipermail/discuss.
The first hot topic on this list has been the MPEG-4 Patent royalty
debate. Thoughts on the royalty payment scheme range from "The death of
MPEG-4" to "This is acceptable", depending on the differing lines of
business.
First some history. In December 1999, the MPEG-4 Industry Forum (M4IF -
http://www.m4if.org) was created. It's goal "To further the adoption of
the MPEG-4 Standard, by establishing MPEG-4 as an accepted and widely used
standard among application developers, service providers, content creators
and end users." has been instrumental in bringing MPEG-4 to the world. As
part of it's work, it has helped the holders of patents related to MPEG-4
to set up patent pools for the different parts of MPEG-4 (Systems, Visual,
and Audio). Although the M4IF has helped in organizing the pools, it has
not been party to any of the patent royalty discussions, and will not
receive any royalties from the patents. The patent pools and the M4IF are
separate organizations. Since the December '99 meeting, the patent pools
have been established and royalty discussions have taken place.
The first patent pool to release a description of the MPEG-4 patent prices
is the "Visual Patent Holders Group" for the simple and core visual
profiles. It currently has 18 members in the pool and is administered by
MPEG LA (http://www.mpegla.com) which also administers some of the MPEG-2
patent pools. The press release was sent out on January 31,2002, and a
copy can be found at http://www.mpegla.com/news_release31Jan2002.html. The
terms in the release are as follows:
"
· US $0.25 per decoder (in hardware or software) for a license to make and
sell and for personal use in receiving private video (i.e., not video for
which a service provider or content owner receives remuneration as a
result of offering/providing the video for viewing or having the video
viewed), subject to a cap of $1,000,000 per year/per legal entity.
· US $0.25 per encoder (in hardware or software) for a license for
personal use only to create private video data (i.e., not video for which
a service provider or content owner receives remuneration as a result of
offering/providing the video for viewing or having the video viewed),
subject to a cap of $1,000,000 per year/per legal entity.
· US $0.00033/minute or portion (equivalent to US $0.02/hour) based on
playback/normal running time for every stream, download or other use of
MPEG-4 video data in connection with which a service provider or content
owner receives remuneration as a result of offering/providing the video
for viewing or having the video viewed (including without limitation
pay-per-view, subscription and advertiser/underwriter-supported services).
This royalty, to be paid by entities that disseminate the MPEG-4 video
data, is not subject to a cap. (In the case of MPEG-4 video for which the
number of uses cannot be directly determined (e.g., video supplied as part
of a basic cable service or to a transmitter for broadcasting), a
surrogate (e.g., standard industry audience measurement) is under
consideration.)
· US $0.00033/minute or part (equivalent to US $0.02/hour) based on
playback/normal running time of MPEG-4 video data encoded (for other than
personal use) on each copy of packaged medium. This royalty, to be paid by
the packaged medium replicator, is not subject to a cap.
· For one year from the start date of the license program, parties that
sign the license (or a memorandum of intent to sign a license) will be
forgiven their payment of royalties for all MPEG-4 Visual Simple and Core
products during and before that one year period.
· The initial term of the License has not yet been finalized but when
decided, will be subject to renewal on reasonable terms and conditions for
the useful life of any patents in the Portfolio.
" (extracted from the press release)
It should be noted that this is only a press release, and the terms have
not fully been drawn up yet. They are subject to change.
Comments on the terms:
Now that the press release is out, the discussions have begun. As only a
press release has been issued and not the actual terms, there are a number
of unknowns that need to be worked out, and all discussions have been
about the terms in the press release.
A brief sampling of comments shows that the encoder royalty of $0.25 is
very reasonable, and few have any issues with paying this amount,
particularly since it is much lower than current MPEG-2 royalties.
The decoder cost of $0.25 is considered good for some, and bad for others.
It is felt to be good for companies that use traditional business models
such as hardware companies that can easily include the cost inside their
device, e.g. cell phone developers. Companies that have typically given
away decoders, for example streaming media feel that this is very hurtful
to MPEG-4 since internet consumers have grown accustomed to receiving
codecs for free.
The fee of $0.00033/minute for streaming is considered the most
objectionable by most licensees. It is also the least understood royalty.
Again, the streaming companies feel that this will kill their business
since many do not receive direct payments from the consumer (pay per view)
but from advertising. It is also felt that it will be hard to calculate
and pay these royalties since many of these companies have never been
involved in royalty issues before and do not have the technology
necessary. This is one area, it is felt, that will need improving before
the licensing takes affect.
Although there has been some comments on the $0.00033/minute for packaging
of MPEG-4, it has not nearly been as contentious as the streaming.
I hope this has provided everyone with a synopsis of the current MPEG-4
licensing schemes, and I hope the next summary will be much shorter.
Peter
--
Peter Haighton
VideoSpheres Inc.
84 Hines Road
Kanata, Ontario
Canada, K2K 3G3
Tel: (613) 270-9646 x3022
Fax: (613) 271-9442
email: peterh   VideoSpheres.com
email: peter.haighton   m4if.org
See http://www.m4if.org for the latest on MPEG-4