HEVC Advance: Warner Bros. deal shows adjusted royalty rate structure 'has been well received'

The addition of Warner Bros. Entertainment as a licensee of and a licensor to HEVC Advance indicates the patent pool effort is gaining steam, the administrator's CEO told FierceOnlineVideo.

"The addition of Warner Bros. Entertainment to the HEVC Advance Patent Pool represents the positive response received from content owners, and their excitement to deliver the UHD viewing experience to their customers using HEVC/H.265 technology," HEVC Advance CEO Peter Moller said.

And perhaps more importantly, Moller confirmed that the group's new royalty rate structure, introduced late last year, was a big part of the reason Warner Bros. signed on to the patent pool.

"The adjusted royalty rate structure announced in December has been well received, and is making a material impact on the growth of the HEVC Advance Licensing Program," Moller said. "Every day, we engage with potential licensees excited to bring UHD to their customers using HEVC/H.265 technology."

In December, HEVC Advance announced a new fee structure for the patents surrounding the compression standard for 4K and HDR content that is more in line with those of older tech standards like H.264. Essentially, the group reduced fees across the board: For instance, rates in the U.S., Europe and Japan for 4K TV sets dropped from $1.50 per unit to $1.20. For connected devices, they decreased from $1.10 per unit to 80 cents. And for mobile devices, they were halved to 40 cents a unit. HEVC Advance also capped liability for royalties, with the highest tier of payments limited to $40 million. 

However, those changes didn't appear to sit well with all of the players involved. As Streaming Media Magazine pointed out in February, vendor Technicolor announced that it wouldn't join the HEVC Advance patent pool and would instead "license its HEVC IP portfolio directly to device manufacturers rather than through the HEVC Advance patent pool."

"Since the emergence of the HEVC Advance pool, various players have delayed adoption of HEVC technologies and redirected their investment into alternative technologies," Technicolor said at the time. "However, HEVC is today the best video compression technology to meet industry needs, such as the shift towards next generation video formats like UHD and HDR. As a leading developer and proponent of HEVC technology, Technicolor strongly believes that the rapid and widespread adoption of a unified technology is the best outcome for the industry and for Technicolor."

The company added that it had already "signed a material patent license agreement for the use of its patents related to HEVC technologies."

However, HEVC Advance's Moller explained that Technicolor had never officially joined the group's patent pool, and so it wasn't exactly leaving. Further, he told FierceOnlineVideo this week that "all the [current HEVC Advance] licensors are/have committed ‎for at least 10 years." He added that the group expects to announce additional licensees and licensors like Warner Bros. "at the appropriate time."

Nonetheless, the space still remains cloudy. A top executive from Starz said recently that the company is treading carefully in the 4K and HDR space partly because both HEVC and HEVC Advanced suffer from onerous patent licensing issues that need to be ironed out before a programmer like Starz would be able to deploy the technology.

Further, companies like Amazon (NASDAQ: AMZN), Cisco, Google (NASDAQ: GOOG), Intel and Netflix (NASDAQ: NFLX) in April announced the Alliance for Open Media (AOMedia), an organization created to develop open-source codecs that are royalty-free as an alternative to HEVC.

For more:
- see this release
- see this FierceCable article

Related articles:
Starz: HDR likely will launch on OTT service first
Alliance for Open Media launches open-source video project for 4K, other codecs
HEVC Advance scales back on 4K patent cash grab

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