[M4IF Discuss] News: MPEG-4 GOES AGAINST SPIRIT OF SHARING THAT BUILT THE NET

[Craig Birkmaier]

February 20, 2024 12:00am
Source: Knight Ridder Business News
The Boston Globe: Feb. 18--MPEG-4 GOES AGAINST SPIRIT OF SHARING THAT 
BUILT THE NET: Nothing's free, not even on the Internet. Everybody 
pays. Still, that leaves plenty of room for haggling over price.
Consider the example of MPEG-4, the latest advance in video 
compression technology. Ever since the early 1990s, the Motion 
Picture Experts Group has rolled out a series of MPEG standards for 
making high-quality compressed copies of TV shows, movies, and music 
recordings. That favorite of digital music-swappers, MP3, is a sample 
of the group's handiwork. So is the digital video compression used on 
DVD players and direct-broadcast satellite dishes.
The organization's newest development is MPEG-4. The idea here is a 
system that can work in everything from high-end digital broadcasting 
to low-speed Internet streaming. Supposedly, MPEG-4 will display 
decent quality video even on a wireless palmtop computer. It's just a 
matter of getting software makers to add the necessary MPEG-4 "codec" 
software to their video servers and playback programs.
Perhaps the most attractive thing about MPEG-4 is that it's an "open 
standard." That's not the same as "open source" software such as 
Linux, which is available free of charge. In this case, an open 
standard merely means that any company willing to pay a royalty fee 
can build video software based on MPEG-4.
That holds out the hope of finally giving the Internet a single 
digital media standard, instead of the various incompatible codecs 
created by Apple Computer Inc., Microsoft Corp., and RealNetworks 
Inc. Someday, just as you can view a Web site with any kind of 
browser, you may be able to view the same video with any media 
player. Creators of digital media won't need three different brands 
of compression software, and Internet providers that stream the 
videos won't need three different brands of server. MPEG-4 could 
become a video lingua franca, much like the HTML used to create Web 
pages.
There's no charge for using HTML -- a major reason for its success. 
But even with royalties, MPEG-4 could be a hit. After all, MP3 
software makers pay royalties, too, and their products are used by 
tens of millions. But the MP3 royalty payment is a one-shot fee. Not 
so with the proposed MPEG-4 fee.
Imagine an Internet provider that sells a streaming video service. 
Customers come with their MPEG-4 videos and pay to have them pumped 
over the Web. This company expects to pay for MPEG-4 server software, 
just as it now pays for the software it uses to distribute RealAudio, 
Windows Media, or Apple Quick Time files.
But MPEG LA, the company that manages the licensing of MPEG-4 
technology, wants something more -- a per-minute fee for each data 
stream leaving the server. The fee works out to 2 cents per hour. 
That's $2,000 per hour for every 100,000 users, or $20,000 for a 
million users. The bill for a company like Cambridge-based Akamai 
Technologies, which runs streaming video servers worldwide, would run 
into the millions. And that doesn't count the cost of an automated 
monitoring system to calculate the amount of royalties owed to MPEG 
LA.
To Phil Schiller, Apple Computer's worldwide product marketing 
honcho, the MPEG-4 royalty plan violates a basic rule of Internet 
business. People will pay once for a box of software, or once a month 
for some all-you-can-eat online service. But they hate to pay by the 
minute, no matter how cheap the rate.
"Consumers don't want to buy things that way. Vendors ... don't want 
to provide it that way," Schiller says.
Apple certainly doesn't. So this week, the company announced it was 
halting a plan to include MPEG-4 support in the next version of its 
Quick Time software. Until the price comes down, users will be 
limited to videos compatible with the existing Quick Time format. To 
resolve the impasse, Apple favors a flat fee applied to the software, 
with no additional usage fees.
RealNetworks says it's also rethinking a plan announced in December 
to add MPEG-4 support to its products, due to the per-minute license 
fee. Microsoft, for now, remains above the fray, because the company 
hasn't committed to using the MPEG-4 standard.
Larry Horn, MPEG LA's vice president of licensing, says his 
organization is open to negotiations.
"Nothing has been cast in stone," he says. "You've got to find a 
balance in the marketplace that works."
It's all vaguely depressing. There's nothing wrong with MPEG LA 
wanting to get paid for its labors. And, yet, think of all the other 
data protocols that make the Internet work -- TCP/IP, HTML, SMTP, the 
whole Scrabble set of wonders, all donated to the world without cost. 
If MPEG LA had gotten hold of these protocols, they'd have been 
encrusted with royalties and license fees and we'd probably have to 
pay a dime for every e-mail.
In the MPEG-4 saga, we catch a glimpse of the mercenary future, when 
no good deed of Internet innovation goes unrewarded. From now on, 
everybody pays.
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