[M4IF Discuss] hourly usage fee for MPEG4

[Ben Waggoner]

on 2/21/02 4:00 PM, McClenny, John Doc at JMcClenny   sandstream.com wrote:
> MPEG-4 in the cable/satellite world must justify not just the cost per hour,
> but the cost of replacing the existing MPEG-2 STBs.  The cable guys aren't
> bandwidth depleted like the satellite people are and have a larger installed
> base.  On the other hand, they are more capable of trying experiments in
> limited geographical areas than DBS.  If the Echostar/DirecTV merger happens,
> MPEG-4 would have a brief window of opportunity as the existing STBs will be
> junked to support the new merged service.

    While cable is somewhat less constrained, there still are substantial
revenue opportunities for them in freeing up bandwidth, in increasing the
number of channels, and freeing up channels for use with the increasingly
oversubscribed cable modems.
    It is my belief that those additional revenue opportunities are
substantially greater than the $0.02/hour.  Doesn't take that much of an
increased cable modem subscription rate to make up for that.
> MSOs/DBS people can live with one time capital charges that get depreciated
> across a long time period.  Hourly charges directly impact cash flow and are a
> bad thing that will keep many people from seriously considering MPEG-4.

    Is it the size of the fee, or the fact of the fee?  Those are very
different issues.  My contention is that the size of the fee doesn't matter
to most of those making these arguments.  How many think it would be
acceptable if it was $0.01/hour instead?  How many people think that $0.02
works, but $0.04 wouldn't?
> Only in the bandwidth constrained DSL world will paying to get the maximum
> video quality in a 1 mbps stream make economic sense because there are not
> viable alternatives.  It is not obvious if there is DSL providers could
> compete against existing TV sources.
> 
>> 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.
> 
> Yep.  Won't even be in the game to be evaluated.
> 
> Will MPEG-4 be relegated to places where lower cost alternatives exist?  Where
> are those places?

    Well, MPEG-4 is unlikely to displace QuickTime, Windows Media, and
RealVideo for computer-based playback, at least based on the current ISMA
profiles.  New, better ones are in the works.
    Also, there are further MPEG-4 video codecs coming down the pike, and in
some cases with different members of the patent pool.  All we have now is
the pricing for Simple Visual, which ISN'T the profile I'd go for if I was
looking to replace my whole system.
    I'd be aiming for H.26L derived profiles, which will offer MUCH better
compression, and aren't that far away at this point.  I doubt we'll see any
Simple STBs.
Ben Waggoner
Interframe Media <http://www.interframemedia.com>
Digital Video Compression Consulting, Training, and Encoding