[M4IF Discuss] hourly usage fee for MPEG4

[Rob Koenen]

While I share the concerns over broadcast and all one-to-many use cases, 
we need to be a bit cautious here. There have been multiple remarks to the 
effect that: 
* the model for broadcast still needs to be worked out
* according to current thinking, it would be based on statistical measures 
   not actual usage. So there is no need for logging of actual hours viewed.
Also be careful with talking about the 'cost to the consumer' as the
consumer.
the consumer is not asked to pay use fees. 'The cost per consumer' is more 
accurate (Yes, of course, in the end it is likely that the consumer pays 
something anyway.)
Rob
-----Original Message-----
From: Ken Goldsholl [mailto:kgoldsholl   oxygnet.com]
Sent: Thursday, February 21, 2024 9:09
To: discuss   lists.m4if.org
Subject: Re: [M4IF Discuss] hourly usage fee for MPEG4
Ben,
Even at $30/year, over four years, that would mean the cost to the consumer
for this technology is $120!  What other technology embedded in a low cost
consumer electronic product costs that much?
In regards to the five cents per hour example, in a few years the cost of
VOD servers will be next to nothing (<$20/stream for the server), and with
servers located at the head end or DSLAM, the bandwidth costs will also be
free. If 30-year old tv shows and movies are avilable for free on broadcast
tv, there will be a limit to how much people will pay for this.  Maybe its
five cents or ten cents per show, maybe its $7.95 for a whole month of
reruns, talk shows, and other low value content that the subscriber watches
75 hours per month of.  The MPEG tax could represent almost 20% of that
cost.  In the long run, content retailers will have incentive to switch to
alternative formats that do not impose an hourly fee to use.
I actually don't think the billing part would be that difficult, but it
could ned up costing someone alot of money.  If a system is all MPEG4 (the
STB probably would be fixed for one delivery mode), then the subscriber mgmt
system just has to log the hours the STB is on.    If a viewer keeps their
STB on all the time, the license fees could run almost $15/month.
Given that a video display is required for viewing MPEG content, it is
unlikely that the cost of any product with a decoder in it would be greatly
affected by a one-time license fee of $3-5.  There won't be too many $25
STBs around.  If someone does come up with a low cost product that utilizes
MPEG4 (like a cell phone), then they can negotiate a different deal.
Ken
----- Original Message ----- 
From: Ben  <mailto:ben   interframemedia.com> Waggoner 
To: discuss   lists.m4if.org <mailto:discuss   lists.m4if.org>  
Sent: Wednesday, February 20, 2024 3:53 PM
Subject: Re: [M4IF Discuss] hourly usage fee for MPEG4
Ken,
    Bear in mind that the total cost per consumer per day of the license fee
would be like $0.08 for someone watching four hours of MPEG-4 TV a day.
Nation-wide, we're only talking about $16M/day assuming 200M Americans watch
four hours of MPEG-4 content a day - this is really a rounding error
compared to the size of the entertainment industry.
    I don't see the actual cost of the license fee being a problem, but the
administration that it would require. I'm looking at doing some on-line
education for video compression, and based on the realistic audience for my
niche, I'd be looking at something under $30/year (1500 user-hours).
    As for the $0.05/hour for watching archival content, I'm confident
customer price sensitivity doesn't exist at that point - you wouldn't lose
80% of your audience by going to $0.25 an hour, so no one would ever charge
that little. Maybe for radio, but certainly not for video. Anyway, bandwidth
costs and server amortization would be many times $0.02/hour, so the extra
fee really wouldn't make or break a business (especially since your
competition would have to pay it too).
    So, again, I feel the problem with the fee isn't the amount, but the
administrative burden it implies. If MPEG-LA can make the terms very clear
to implement. I'd hate to spend $900 of my time figuring out how to pay them
$10.
    Perhaps waive the fee for anything under $100/year, easy to use
accounting integrated with servers, and a clear and generous definition of
what content isn't revenue producing?
Ben Waggoner
Interframe Media <http://www.interframemedia.com>
Digital Video Compression Consulting, Training, and Encoding
on 2/20/02 3:27 PM, Ken Goldsholl at kgoldsholl   oxygnet.com wrote:
When viewed in the context of paying $4 for watching a feature film, two
cents an hour does not seem unreasonable.  However, for video on demand
service to become ubiquitous, much more content than recently released
movies must be available on the system, as that kind of service can not
succeed with just a handful of titles.  If content that is offered on free
television is also included in a service like subscription video on demand,
then the hourly usage fee can render such a service unfeasible, which would
have the ripple effect of suppressing demand for all VOD.  There could very
well be reruns of old TV series that may cost viewers say, five cents per
hour.  This usage fee then eats up a big portion of the revenue.
When viewed in the context of other technology, this proposal makes even
less sense.  Yes, a significant investment was made by the patent holders to
develop the MPEG4 intellectual property.  But the same can be said for
virtually all other kinds of technology, almost all of which is paid for by
the user when they purchase the product.  What is so special about MPEG4
that the creators deserve a perpetual revenue stream?  There are no
recurring payments to the developers of the technology utilized in cars,
computers, audio systems, basically every other electronic device.  
The idea that reducing the upfront cost of the equipment to spread the
proliferation of MPEG4 devices should be quickly dismissed, as a $2.50
royalty for the decoder in a set-top box will not slow down adoption of that
device.  An what about the other technology used in these products?  MPEG4
is just a small part of the technology needed for the digital video
end-to-end solution. Will they be subject to hourly usage fees?
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