[M4IF Discuss] To those concerned about MPEG- 4 Licensing ...

[William J. Fulco]

Rob,
I agree - that's my point. Once a license is established, raising the prices
an arbitrary amount is very hard to do - because people need certainty...
people with BIG stakes won't take the chance without some "limits" and as I
suggested small players may take the chance in hopes of being big players.
This is the dance we all do.  All I am saying is the current usage model
doesn't work for the non-existent model - so the current price is not going
to get MPEG-4 adopted - the "market" at the moment is too information-poor
so no one can make a rational decision.
That's all - if they want to jump-start it - they need to create a long
enough "window of certainty" for an early-adopter "acceptable fee"... I
think you're arguing that the end-game must be negotiated up front with this
window being a grace-period (it does give more certainty certainly :).
That's one way of doing it. I'm just saying that there are other structures
uses in contract negotiations all the time - from middle-east peace to
leasing a car...  they all hinge on trading off information-risk for money.
I'm just offering other possibilities.  I would like a decent end-price now
and a grace period (SEVERAL years at least)... however, I think we still
suffer from lack of information about what deals will work in the
not-yet-existent market (I'm leaving out things that MPEG-2 already does -
MPEG-4 replacements can be sanely priced today based on the cash-flow of the
MPEG-2 market).
++Bill
> Let's face it Bill - once the license gets established you
> cannot in good reason make things cost more.
> Increasing the price would be the tactic of a drug dealer,
> and one could well argue that it is "unreasonable".
>
> I believe the term of the MPEG-2 license is 5 year, and
> that there are strict limits on the cost increase after
> the term of the license -- if there are any such increases
> at all.
>
> "Side deals" are a non-starter, because the license needs
> to be non-discriminatory. (Unless everyone, big and small,
> gets the same side deal...)
>
> The only reasonable market building strategy is the grace
> period.
>
> > Yes- but have the been explicit as to how long and under what
> > terms?
>
> http://www.mpegla.com/news/n_02-01-31_m4v.html gives the answer:
> The period is a year from start of licensing and the terms
> are "free".
>
> Best Regards,
> Rob
>
> > -----Original Message-----
> > From: William J. Fulco [mailto:wjf   NetworkXXIII.com]
> > Sent: Wednesday, May 08, 2024 1:14
> > To: rob.koenen   m4if.org; ramizer   wmr.com; 'Rob Koenen'
> > Cc: discuss   lists.m4if.org
> > Subject: RE: [M4IF Discuss] To those concerned about MPEG- 4 Licensing
> > ...
> >
> >
> > Rob,
> >
> > > The licensors had already announced that there would be a
> > grace period.
> >
> > Yes- but have the been explicit as to how long and under what
> > terms?  I'm
> > suggesting a long-ish "grace period" - given it takes years
> > to develop a
> > market.
> >
> > > Thinking as a potential licensee, I would rather know right
> > away what I am
> > > dealing with before making major investment decisions, than
> > having it free
> > > now but with unknown fees down the road.
> >
> > Yes - I'm also suggesting that the structure of the fees for
> > some things
> > like "MPEG-2 replacement" type uses be defined early and
> > rationally.  More
> > esoteric things like "movies on demand" or "Surf-beach WebCam
> > network" can
> > be fleshed out with some guidelines - without the exact
> > details. Or - you
> > can put a "reasonable" license in place for a fixed period of
> > time - say 5
> > years - "$0.25/encoder" and same for decoder now - and that
> > license will be
> > good for 5 or 6 or 10 years. Then you can have a
> > "renegotiation" phase...
> >
> > > Having it clear as soon as possible is the best option for the
> > > entire market.
> >
> > Yes - but what I'm saying is that when there is no market you can not
> > honestly tell what something is worth - and when the "time
> > comes" - some
> > applications will die...  some will feel ripped-off and some
> > will say "cool,
> > not as bad as we thought" - if we believe in the concept that
> > it is THEIR IP
> > and they do get to charge whatever they want - then if they
> > get greedy later
> > on and kill a golden-egg-producing-goose - then so be it -
> > they're stupid
> > and nuts... on the other hand, we KNOW that the fees needed
> > to launch a
> > market with little money in it have to be much lower than
> > what the market
> > can sustain later on.... so like the baseball player that has
> > a couple good
> > years and wants a more money at contract-renegotiation time -
> > it's his right
> > to ask and the team's right to pay or not.
> >
> > In short to launch the market, we need a "cheap" (possibly too cheap)
> > license to get going - and IF / WHEN the market develops
> > later on, there
> > will be money available for the IP holders to get greedy with
> > - or not.
> > Either way, there will be more information to make a rational
> > decision in
> > the matter.
> >
> > If you're going to "invest" huge amounts of money in content
> > - then your
> > time-horizon is going to be longer and your need for
> > certainty is greater -
> > and you may cut a side-deal with the MPEG-LA guys to keep
> > yourself 'safe' -
> > on the other hand, if you're a small-time company - with
> > little content -
> > that can't support just the overhead of the accounting for
> > the use-fee -
> > well then, if in 4 years it suddenly gets onerous - you can
> > change... in the
> > mean time if you want to know the end-game now and you won't
> > do anything
> > until you do - well you'll be sitting on your hands saying "I won't do
> > anything until you give me guarantees" while YOUR competitors
> > are taking the
> > risk and making the move....
> >
> > Business is about risk - unknown future - years out is the
> > least of many
> > company's problems that need to get a product out today.
> >
> > ++Bill
> >
> > ---------------------------------
> > William J. Fulco
> > wjf   NetworkXXIII.com
> > 310-927-4263 (Cell)
> >
> > Ne cede malis sed contra audientor ito!
> >
> >
> >
>