[M4IF Discuss] hourly usage fee for MPEG4

[Ben Waggoner]

Ken,
    The question is whether or not content providers get more than
$0.02/hour out of using MPEG-4 instead of alternative technologies.
    Take, for example, digital cable and satellite companies.  If MPEG-4
allows them to double their number of channels, it'll let them add a lot of
revenue, by increasing the number of channels and pay-per-view orders they
get.  If it allows them to save money in set top boxes by using commodity
chips, that can also add up quickly ($30/year is less than the real cost of
modern digital STBs).
    If MPEG-4 can't provide that kind of value, it isn't going to work one
way or the other.
    Also, content providers are going to make sure they aren't charged for
all the time the box is on, through some mechanism or another (e.g., not
counting any content viewed if the remote control hasn't been used in two
hours).
Ben Waggoner
Interframe Media <http://www.interframemedia.com>
Digital Video Compression Consulting, Training, and Encoding
on 2/21/02 9:08 AM, Ken Goldsholl at kgoldsholl   oxygnet.com wrote:
> 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.