With the video industry balking at its original royalty rates, a new patent group attempting to exploit the HEVC compression standard has come up with a new fee structure.
The new HEVC Advance fee structure is more in line with those of older tech standards like H.264. For one, liability for royalties is now capped, with the highest tier of payments limited to $40 million.
Fees have been reduced across the board as well. For instance, rates in the U.S., Europe and Japan for 4K TV sets drop from $1.50 per unit to $1.20. For connected devices, they've been decreased from $1.10 per unit to 80 cents. For mobile devices, they've been halved to 40 cents a unit. (Analyst Dan Rayburn's Streaming Media blog has a detailed rundown of all the changes.)
HEVC Advance, headquartered in Boston, was formed in April with a goal of compiling 500-plus patents related to High Efficiency Video Coding (HEVC), an essential compression standard for streaming 4K video. The group appointed Barcelo, Harrison & Walker LLP as the independent patent evaluator in July and began the evaluation process on Aug. 1.
The group claims to have a roster of potential clients such as Technicolor, Dolby, Philips and Mitsubishi Electric.
"After our initial pricing announcement we reengaged with key segments of the HEVC community, including content owners and distributors as well as device manufacturers, to better align our licensing structure and rates with the industry's long-term technology goals," said HEVC Advance CEO Peter Moller. "We are pleased with the results of our industry engagement and confident that the revised pricing structure and rates balance the needs of both HEVC users and patent owners."
Writing about the patent pool in July, Rayburn called the group's rates "unjust and unfair."
"Considering that most content owners and distributors plan to convert all of their videos over time to use the new High Efficiency Video Coding compression standard, companies like Facebook, Netflix and others would have to pay over $100M a year in licensing payments," he said.
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