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http://www.insanely-great.com/news.php?id=659
MPEG LA backs down, royalties capped
By ron carlson, Insanely Great Mac
July 16th 2002
The move could prevent MPEG-4 from self-immolating before it reaches consumers
News.com reports that QuickTime 6''s sudden availability is due at least in part to an
eleventh hour agreement between MPEG LA the group that represents the 18 patent
holders with claims on underlying MPEG-4 technology, and would-be licensees.
Many vendors, notably Apple, balked at the terms initially offered by MPEG LA in
February. At the time, the licensing body proposed, among other things, royalties
without caps or thresholds.
"We''ve made a lot of progress as an industry working with MPEG LA, moving them
considerably from where they were six months ago," Frank Casanova, Apple''s director
of QuickTime product marketing, told News.com.
Under terms announced yesterday, Internet media content owners with fewer than 50,000
subscribers needn''t pay royalties. Licensing fees have been set at $0.25 per
subscriber or $0.02 per hour with a $1 million cap per year.
Also, content owners can pay $1 million annually up front to avoid reporting on usage.
"We''ve met a lot of the concerns that have been expressed in the marketplace,"
Lawrence Horn, MPEG LA spokesman told News.com. "We''ve built a licensing model
that''s usable in the industry."
A twisted plot line
In many instances, Apple for example, those licensing MPEG-4 are also the same
entities that own the 18 patents behind this technology. In a very real way, patent
holders are licensing their own technology and paying themselves royalties for the
right to use it.
Also, although unspoken, MPEG-1/2/3 survived quite nicely in the marketplace without
per use fees. Apple''s iTunes and a dozen or more other mp3 players offer dozens of
"radio" stations that don''t collect or pay listener fees, and still mp3 is widely
viewed as the most popular and successful audio compression standard ever.
Moreover, MPEG-1/2/3 have been in use for years and its purveyors seem to have made
healthy profits without directly collecting data on the when and who of their use.
Those who purchased the codecs for MPEG-1/2/3 -- software and hardware tools -- for
encoding and decoding content do pay licensing fees and apparently there is still
enough money to go for both new research (i.e. MPEG-4) and to pay share holders.
However, Rob Koenen, president of the MPEG Requirements Group, told News.com that if
MPEG LA had not reconsidered per-use fees, the technology might well have withered.
That Mr. Koenen can make such a statement without qualification or hint of irony is a
test logic if not good taste.
"If the terms are acceptable for the markets, MPEG-4 will take off big time. If not,
it will be a serious impediment," Koenen is also quoted as saying. "MPEG-4 doesn''t
exist in a vacuum. It has to be economically feasible, too."
It is good that a technology integral to Apple''s future is now available on terms
apparently agreeable to reasonable men. That this technology introduces user
data-collection requirements and per-use fees is not a good thing.
This is a land grab pure and simple.
Post your comments at:
http://www.insanely-great.com/news.php?id=659
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