CableLabs: HEVCAdvance, MPEG-LA patent pools need to merge, codec licensing costs are too high

CableLabs, citing the licensing confusion that slowed adoption of the MPEG-4 digital video codec, is urging the separate patent pools MPEG Licensing Authority (MPEG-LA) and HEVCAdvance to reconcile or merge lest the same fate befall HEVC, the latest MPEG-4 codec.

Having two licensing groups for HEVC could force licensees to sign agreements with both to protect themselves against infringement. This could result in "substantial financial impact" for device vendors and content distributors, which could trickle down to consumers in the form of increased prices, wrote Greg Rutz, lead architect of the Advanced Technologies Group at CableLabs, in a blog post on the company's website.

The MPEG-LA plans to charge a flat per-device royalty for vendors shipping more than 100,000 HEVC-compatible devices to end-users, and no fees to anyone shipping less than 100,000, while also eliminating royalty fees for content distributors.

HEVC Advance, on the other hand, originally planned to charge a higher per-device fee and assess an "attributable revenue" fee for content distributors while not offering any royalty caps. Following some backlash, HEVC Advance in late 2015 modified its terms, lowering its per-device fees and varying royalty rates depending on the type of device. HEVC Advance won't charge royalties for free, over-the-air and Internet broadcast video but its per-title and per-subscriber royalties remain, and it can charge for past per-title and subscription-based unit sales.

For its part, HEVC Advance, which in January began accepting requests for licenses, sounds confident its licensing terms will work for the market.

"After receiving a positive response from market participants to our recently announced updated royalty rate structure, we are excited to facilitate accelerated adoption of HEVC/H.265 patented technology," HEVC Advance CEO Pete Moller said in a statement. "Our efficient licensing process will allow organizations of any size to quickly and easily secure necessary patent rights to integrate HEVC/H.265 technology into their products and services."

In response to concerns over HEVC licensing fees, CableLabs' Rutz said that Google (NASDAQ: GOOG) has been working on its royalty-free VP8 and VP9 digital video codecs, and the Alliance for Open Media has enlisted Google, Cisco, Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), Intel, Microsoft (NASDAQ: MSFT) and Mozilla to collaborate on a free alternative to MPEG-4-based codecs.

"Not sure we can say this statement with utmost confidence; but it seems clear that the confusing landscape of IP-encumbered video codecs is driving industry towards a future where digital video -- the predominant leader in video traffic on the internet -- may truly be free from patent royalties," wrote Rutz.

For more:
- see this CableLabs blog post
- see this HEVC Advance press release

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