[M4IF Discuss] Slashdot discussion of Salon article

[Mikael Bourges-Sevenier]

Dear Craig, All,
> The money is in content and access to content. The CE industry has 
> learned a thing or two about revenues  AFTER the box is sold. Video 
> games are a prime example - a huge chunk of Sony's profits come from 
> the royalties on the sale of PS2 games. DVD was a breakthru product. 
> MPEG-LA and the DVD Consortium figured out how to cash in on the box 
> (traditional royalties), AND by creating ongoing revenue streams via 
> royalties on the IP. Every DVD movie includes a usage fee. A small 
> but humble start.
> 
> Damian Cave came close to hitting the nail on the head in the Salon 
> article. Unfortunatley he was not as aggressive as he could have been 
> in pointing out the real issues that are in play here.
> 
> The proposed usage fees are about control over an emerging medium. 
> Several times this week I heard people ask how we have reached the 
> point where it has become possible for the developers of a 
> technology to place a tax on content.
> 
> These things can happen when powerful industries act in concert to 
> protect a highly profitable legacy.
> 
> Internet streaming is NOT  "a whole new market" as Sanjay suggests.
> 
> It is a whole new business model.
> 
> The "whole" of MPEG-4 is to this new business model what linear 
> video/MPEG-2 is to the old dumb TV business model.
> 
> Focusing on another linear video codec - JVT - misses the point.
> 
> The effort that will be required to migrate to the new business model 
> supported by MPEG-4 will be massive. For the technology to be a 
> success, every penny in royalties on the IP should be plowed back 
> into promotion of the standard. Something tells me that this is not 
> what MPEG-LA has in mind.

Thanks for this excellent analysis.
Exactly, this is the point. IMHO, this is what MPEG-LA has completely
missed. One thing that surprised me is that no content creator
companies, no massive content production, no content distributor has
been involved in the discussions. It's like making lots of technology
available without consulting the prime users, but worse by restricting
access to this technology.
On the business side, if you restrict access to the technology as
MPEG-LA did, content may not be created at a scale for massive adoption.
No content, no adoption. And, in the internet era, content distribution
business models are already well-known and have made some companies very
successful, Macromedia come to my mind which equipped 75% of the web
sites, lots of CD-ROM, some games and with the advent of Director 8.5
already has more than 20% of 3D market on the web (Macromedia numbers).
The whole MPEG-4 competes just in this category. No wonder why so many
MPEG-4 centric companies have written converters (incuding me) from
Flash to MPEG-4! With such policy, MPEG-LA has just said to content
creators: continue using Macromedia (and others) tools. 
Yes it's proprietary but who cares when you can distribute your contents
freely, when thousands of people use your tools, when you have millions
of players out there that can view your contents on virtually any
platforms. In other words, when you have a business model where both
content creators and companies using your tools find a win-win
situation.
To me, it looks like MPEG-LA had in mind to make patent holders win on
everything, but by doing so, they may also loose everything. And for
those of us who spent many years in MPEG-4 committee, what could be
worse than to see this technology not deployed as envisioned or when
markets MPEG-4 was targeted for are shrinking or even lost (remember NTT
DoCoMo speech at M4IF last year)?
Let's hope that MPEG-LA will come with reasonable terms soon, before
it's too late.
Best,
Mike