Action! MPEG-4 set for launch

[NeVeRLiFt]

http://zdnet.com.com/2100-1105-944079.html




MPEG LA, a group of patent holders governing MPEG-4, on Monday finalized licensing terms for the media delivery standard, bowing to market pressure for manageable royalty rates.

[Infophreak]

What do you mean with "managable"? They want to charge per encoder/decoder, so XviD is right out. You still have to pay MPEG-LA for putting an MPEG-4 video up for free download on your website. Granted, the fee is low, but it won't make normal people use it for anything. If anything, this will mean that WMV 8 or MS's new Corona will be used more, unfortunately.

And just exactly how are they planning on administrating it? If I run a company that let's people download MPEG-4 videos from my website for a monthly fee (this is that could have happened had gamespot.com chosen DivX or QT 6 for their downloads - not that I like gamespot anymore though), it is in my interest not to tell the truth about how much video that has been downloaded. The ONLY logical solution to it is that all MPEG-4 content on the web must be stored on some servers run by MPEG-LA or at least trusted by MPEG-LA.

All in all, while MPEG-4 is nice, I think that these licensing terms will spread it from becoming widely used for anything other than DVD-ripping (who cares about not having paid MPEG-LA licensing fees, when MPAA can sue your ass off for a lot more?)

[NeVeRLiFt]

Doom9 posted the link on the front page. I posted the link here so people could discuss it. Hope you enjoyed reading it.

[mpucoder]

@Infophreak: Did you miss this part "Also, MPEG LA set a minimum threshold so that content owners with fewer than 50,000 subscribers aren't subject to royalties."?
That's almost 4 times the number of subscribers to this forum.

[mikemikez]

Well, what troubles me bigtime is that word SUBSCRIBERS.

With all the weirdness currently being forced upon people by so called anti-piracy measures it wouldn't surprice me if the idea is that larger websites (also below that limit)have to use some sort of registration service controlled by the MPEGLA.

And don't be fooled! Once again this whole licensing structure is the work of mega companies and yes, it's also made to only favour mega companies. Bassically, if you as a company want to do something a bit serious in online streaming of content in MPEG4 you need to break that $1million limit by far to be able to be competitive to the real biggies. In other words, to as a company do anything serious in the business of streaming stuff to the hardware we will see popup sometime soon you need to pass the unwritten requirements for being part of that group of media companies that dominates the industry.

These's even a pure BLACKMAIL clausule in this licensing scheme. If you don't want your stats to be published you need to pay $1million anyway!!!

Oh, and people. Please don't forget about the people getting rich of this sort of shit! When will people finally wake up and track these people down and force them to put their money back into ouw public services again, where it belongs!

Mike

[Infophreak]

The fees on the en- and decoder are killers too. If they decide to go after XviD (which they obviously could because source code is NOT free speech according to the DeCSS trial), it's the end of free (both as in speech and beer) video implementations until Theora is completed (and even then, I really doubt how good it will be because VP3 is hideously bad).

AAC hasn't really taken off either - Dolby Digital's fees are insane (0.12-0.25$ per channel, IIRC, for a decoder - be it free or commercial)

Personally, I don't think they'll be going after XviD, at least not if it stays geekish enough, because it will be a public relations disaster (big conglomerate of companies hits spare time developers in the head with a patent - such a head line would NOT be good)

[Latexxx]

The fees won't kill xvid because they only distribute the sources, not encoder or decoder. None of the binaries are official. Same thing has been going on with lame some years.

[ChristianHJW]

Originally posted by Latexxx The fees won't kill xvid because they only distribute the sources, not encoder or decoder. None of the binaries are official. Same thing has been going on with lame some years.

... true, but only because MP3 patent holder Fraunhofer has been tolerating it deliberately, at least this is my point of view ..... i am no lawyer, but as stated above it was decided that spreading source code is NOT subject to freedom of speech ( DeCSS trial ), so the whole 'educational project' approach would not withstand a real trial in court, i am pretty convinced about that.

Lets not forget, even the source code will contain patent protected contents, so its not only about licensing, its also about patent violation.

I still dont think this will cause the XviD team any problems as long as they dont get commercial, because all big license holders will only invest the money necessary for such a trial if they see any profit or ROI in the end, and as XviD developers are not rich they cant pay huge royalties, so there is nothing to win that would justify such a trial. The only reason i see why MPEG-LA could act against XviD is incoming complaints about profit losses from license holders, such as DivX Networks .... but they are very well aware they would kill their companies by doing such actions, so it wont happen.

[Antti]

Lame's existence is not because of Fraunhofer's generosity. It's just because it's source-only. Patent issues have nothing to do with free speech and DMCA (as DeCSS case has). Fraunhofer has gone after binary MP3 encoders, just like Dolby did with AAC. And Dolby can't forbid distributing FAAC source, it hasn't even tried to.

IANAL, but quite certain about what I said.

[auenf]

Bladeenc is only officially distributed as source as well, and i remember it WAS cause of fraunhoffer pressure.

Enf...

[primitive]

Umm, I was under the impression from that link that you are not required to pay any royalties unless you collect payment for services rendered.

Relavant link: http://www.mpegla.com/news/n_02-07-15_m4v.html

Quote:

"The license terms tie royalties for use only to MPEG-4 Visual products or services for which the content or service provider receives remuneration, and are consistent with the expected flow of MPEG-4 Visual transactions."

Really, if you read that link the license terms are straightforward. You don't have to pay unless you get paid, which seems fair to me.

Let me say that again in different words. DivX5 is a commercial MPEG-4 product being produced by a company for profit. DivX Networks will be paying license fees for any codec it distributes after the grace period expires, which is currently December 31, 2003. Not 2002, 200_3_. XviD, since it's not a commercial product, doesn't owe any royalties. If a company were to take XviD and make a product out of it (as is their right, under the GPL) they would owe royalties for their commercial product because they would be using MPEG-4 for "products or services for which the content or service provider receives remuneration."

Since the XviD team isn't a content provider or a service provider, they will never get stuck with royalties. Let's say that I host an XviD download page on a site where I have banner ads and I receive payment directly from those banner ads; technically I am receiving renumeration, so I am required to pay. However, even in that case I don't have to pay a cent for the first 50,000 downloads in a year, and I don't have to even think about paying anything until 2004.

Let's kill the MPEG-4 FUD right now.

@Infophreak

I: "They want to charge per encoder/decoder, so XviD is right out."

By my reading you are only liable for royalties if you collect payment for services, and only then after the first 50,000 are distributed in a year, and only then after December 31, 2003, which is when the grace period ends.

I: "You still have to pay MPEG-LA for putting an MPEG-4 video up for free download on your website."

Only if your website is commercial. If it's a personal page, you're in the clear. "The license terms tie royalties for use only to MPEG-4 Visual products or services for which the content or service provider receives remuneration." Even if your site IS commercial, you're still not looking at paying that much. Let's do the math: say you have a 50MB MPEG-4 clip that's 10 minutes long that you provide for free. Let's say that it's wildly popular and gets 100,000 downloads.

100,000 * $.002 = $200 MPEG-4 license fee
100,000 * .05GB = 5 TERRABYTES transferred

The BW costs for distributing 5TB of data will bankrupt you long before MPEG-4 knocks on your door looking for their 200 dollars. If you can afford 5TB of bandwidth, 200 dollars is chump change, anyway.

@mikemikez

M: "...it wouldn't surprice(sic) me if the idea is that larger websites...have to use some sort of registration service controlled by the MPEGLA."

Umm, what kind of websites? Sites like doom9 are noncommercial; I can't imagine doom9 raking in the dough running a place like this. According to the terms of the agreement, "The license terms tie royalties for use only to MPEG-4 Visual products or services for which the content or service provider receives remuneration."

M: "These's even a pure BLACKMAIL clausule(sic) in this licensing scheme. If you don't want your stats to be published you need to pay $1million anyway!!!"

Lemme get you a tinfoil hat. If you read the terms of the license, you will realize how truly ridiculous a sum like $1million is in this license, anyway. Look at the math I performed up above, except think of a popular site (such as a porn site). Let's say this is the biggest porn site, ever, and gets 10,000,000 downloads a year of 50MB, 10 minute MPEG-4 files. They will be transferring 500TB of data a year, yet owe only $20,000 in licensing costs. Again, if you can afford 500TB of bandwidth a year, $20,000 in MPEG-4 licensing will be petty cash.

@Infophreak (again)

I: "The fees on the en- and decoder are killers too."

Fees? What fees? Who is selling XviD? "The license terms tie royalties for use only to MPEG-4 Visual products or services for which the content or service provider receives remuneration."

---

As I read through the License document I got the impression that it was written so as to not be hostile to free implementations of MPEG-4. I can't say it enough, if you don't sell anything, you don't owe anything. Also, even if you do sell something, you don't have to start paying anything until 2004. This clause was specifically designed to increase MPEG-4 market penetration as rapidly as possible.

It is obvious that people have have problems with this royalty agreement haven't read the terms. Please read them; they are remarkably clearly written, with a minimum of bullshit legalese.

http://www.mpegla.com/news/n_02-07-15_m4v.html

-p

[mpucoder]

Pretty much agree with that analysis except for the "grace period". That is only effective if you sign the agreement within the next 6 months, it is not automatically extended to everyone.

[trbarry]

From watching the M3IF Discuss mailing list for the last few months it seems fairly certain to me that if you accept any advertising revenues then you will be considered commercial.

So the MPEG-LA is going to have to be very careful here. It would only take a couple stories of small sites being harrassed and these license terms would start to not look so nice. And anyone with MPEG4 downloads would have to seriously consider whether accepting any advertising revenue would gain enough bucks to offset maybe opening the door to MPEG-LA license fees or reporting requirements.

It is going to be very hard not to equate sites large enough to have advertising revenue and sites large enough to pay license fees. I'll bet the Internet advertisers won't like this very much.

- Tom

[Infophreak]

IANAL and English is not my native language, but I'll try to analyze the terms anyway:

*******************************************************
1. In the case of current cable television, direct satellite television and over-the-air broadcast that one day may allow a broadcaster to address its broadcast to a specific viewer or subscriber (but not for environments which involve the Internet or are principally intended to be mobile), the manufacturer will pay a royalty of US $0.25 for the right to manufacture and sell each decoder and encoder (subject to annual caps per legal entity for the manufacture and sale of decoders and encoders in #2 below) and the party having the unique relationship of providing content service to the subscriber (e.g., cable television system or direct satellite provider) will pay a royalty of US $1.25 for the paid-up right to use a decoder to decode and use encoded MPEG-4 Visual information.
*******************************************************
For end users, this is pretty much irrelevant.

*******************************************************
2. In the case of Internet (wired and wireless) or mobile, annual royalties with annual limitations and thresholds will apply: (a) for the manufacture and sale of decoders and/or encoders: US $0.25 per activated decoder and/or encoder subject to an annual cap per legal entity of $1,000,000 for decoders and $1,000,000 for encoders (to be paid by the manufacturer that offers functioning product for sale or distribution, either directly or through a chain of distribution, to the end user), but there is no royalty for the first 50,000 decoders and first 50,000 encoders in a calendar year sold or distributed by a legal entity (applies to no more than one legal entity in an affiliated group); (b) for the use of decoders and encoders to decode or encode MPEG-4 video (to be paid by the party that is the apparent source of such video to the consumer), a licensee may choose to pay US $0.25 per subscriber per year or US $0.000333 per minute of MPEG-4 video used, each subject to an annual cap of $1,000,000 per legal entity, or a $1,000,000 annual paid-up fee (with no royalty reporting obligation), but no royalty is payable on the first 50,000 subscribers during a calendar year (applies to no more than one legal entity in an affiliated group). Subscriber refers to each unique viewer for any part of a year, but where the content provider’s remuneration is not directly from subscriptions (e.g., advertiser-supported services), MPEG LA will work directly with Licensees to come up with a consistent method of counting subscribers that works with their business models.
*******************************************************
@(a): A question: What do they mean with "activated encoder"? I have not run across such a wording anywhere before, and to me, it seems like they have grabbed it from thin air. Are they saying that it must be ready for encoding/decoding when the end user receives it? If that's the case, then XviD can just keep going and release source code. UManiac, Koepi and Nic will probably have to stop making binaries avaiblable though. Note, that you have to pay for both the manufacture of said "activated encoders/decoders" and the sale of them. Nice going MPEG-LA, this way, you get the licensing fees twice or more.
@(b): XviD is still not in the clear, because end users have to pay to actually use the encoder/decoder. OK, the first 50,000 pieces of software are free, but the internet is a huge place, and 50,000 downloads really isn't that much. Obviously, it is going to be pretty tough for MPEG-LA to actually prove that 50,000 source packages have been downloaded, compiled and used, and as long as XviD remains relatively small (as in: no companies use it for anything), MPEG-LA doesn't stand to gain much by going after it.

*******************************************************
3. In the case of Stored Video (packaged media and video transmitted and stored for viewing for which a transactional fee is paid), the replicator or content provider will pay (a) US $0.01 per 30 minutes or part to a maximum of US $0.04 per movie; (b) US $0.005 per 30 minutes or part thereof to a maximum of US $0.02 per movie where the content of the Stored Video is 5 years or older (after it was copyrighted or subject to be copyrighted), and (c) US $0.002 for a Stored Video of 12 minutes or less.
*******************************************************
This seems reasonable enough, but it is going to be hell to administer. As I said before, what would stop a pay per download site to report falsified information? Nothing! MPEG-LA can't prove anything without a search warrant, which I don't think they'll get that easily.

Finally, let's consider the possiblilities of these terms changing all of a sudden. This is most of all a case of market penetration. If MPEG-4 becomes a huge success and pretty much eliminates the use of MPEG-2 in the digital broadcast area, what's stopping them from slamming some new and much more restrictive licensing terms on it? Not the DoJ, because we all now how MS has been able to/will weave it's way out of all of the penalties from the antitrust trial. As far as I can see, nothing would really stop them from doing this other than their benevolent(???) nature.

I don't really mind licensing fees for MPEG-4, because it has taken a lot of time and money to develop, but as much as I don't mind that, I really do mind software patents, and I find it sad that EU are on the brink of adopting the same policies as USA to them.

[primitive]

You bring up some good points. Let me take a look at them.

I: "@(a): A question: What do they mean with "activated encoder"? I have not run across such a wording anywhere before, and to me, it seems like they have grabbed it from thin air. Are they saying that it must be ready for encoding/decoding when the end user receives it? If that's the case, then XviD can just keep going and release source code. UManiac, Koepi and Nic will probably have to stop making binaries avaiblable though. Note, that you have to pay for both the manufacture of said "activated encoders/decoders" and the sale of them. Nice going MPEG-LA, this way, you get the licensing fees twice or more."

Here's what "activated encoder" means. Let's say that DivX Networks releases a DivX 6 in such a way that when you download their binary codec package the decoder part is enabled but the encoder is locked unless you pay DivX Networks 20$. In this case, DivX would owe money for the decoder portion of the product, but would owe royalties only on the people who "unlocked" the encoder portion of the codec. This lets DivX Networks ship encoders with every package without paying through the nose (because it's obvious that not everybody who wants an MPEG-4 DECODER needs an MPEG-4 ENCODER).

UManiac, Koepi, and Nic would not have to pay royalties for distributing their builds of the XviD MPEG-4 codec, as they do not make money for distributing those builds. "The license terms tie royalties for use only to MPEG-4 Visual products or services for which the content or service provider receives remuneration." The per-encoder and per-decoder royalties apply only to content and service providers who provide their own codec.

Also, notice that the three points (1, 2, and 3) in the license agreement are referred to as "business environments"; I couldn't hardly call what Koepi, Nic, and UManiac do by building XviD for our use a "business environment", could I?

I: "@(b): XviD is still not in the clear, because end users have to pay to actually use the encoder/decoder. OK, the first 50,000 pieces of software are free, but the internet is a huge place, and 50,000 downloads really isn't that much. Obviously, it is going to be pretty tough for MPEG-LA to actually prove that 50,000 source packages have been downloaded, compiled and used, and as long as XviD remains relatively small (as in: no companies use it for anything), MPEG-LA doesn't stand to gain much by going after it."

Where does it say that end users have to pay to use the codec? I see this sentence: "for the use of decoders and encoders to decode or encode MPEG-4 video (to be paid by the party that is the apparent source of such video to the consumer)" Relavant part bolded; the "apparent source of such video to the consumer" is going to be the content or service provider, not the consumer himself.

I: "This seems reasonable enough, but it is going to be hell to administer. As I said before, what would stop a pay per download site to report falsified information? Nothing! MPEG-LA can't prove anything without a search warrant, which I don't think they'll get that easily."

You have to realize the nature of the business. I thought I had noted the impossibilities of scale surrounding the royalties the MPEG group is demanding, but I'll restate them:

Let's say a porn site transfers 10,000,000 50MB 10min MPEG-4movies a year. This translates into 500TB of bandwidth and 20,000$ of MPEG-4
royalties. If you have a porn site that moves this kind of traffic, how many subscribers must it have? How much must that bandwidth cost? Truthfully, it'd be much too much trouble to go and falsify that information when the 20,000$ license fee is such chump change when compared to the other costs of running that kind of business. (To put it in perspective: 500TB of bandwidth a year corresponds to using 16mbps solid 24 hours a day, 7 days a week, 365 days a year.)

It would be too much trouble to go out of your way to falsify that information. The fees are too low. It's easier to catch flies with sugar than with vinegar.

I: "Finally, let's consider the possiblilities of these terms changing all of a sudden. This is most of all a case of market penetration. If MPEG-4 becomes a huge success and pretty much eliminates the use of MPEG-2 in the digital broadcast area, what's stopping them from slamming some new and much more restrictive licensing terms on it? Not the DoJ, because we all now how MS has been able to/will weave it's way out of all of the penalties from the antitrust trial. As far as I can see, nothing would really stop them from doing this other than their benevolent(???) nature."

"The initial term of the license will run through Dec 31, 2008"

If they tried to make any radical changes to the license agreement before 2009, they would get the pants sued off them. Let's say that they get greedy around 2005 and try to play the license agreement shell-game; they'll get stuck between a rock (the courts and the people sueing their pants off) and a hard place (free implementations cutting into their bottom line once people realize that the MPEG group is trying to rip them off and take away their cool stuff).

I really think XviD will become a force for MPEG-4; because of the GPL, companies can freely take the XviD MPEG-4 implementation and deploy it in their products, spreading XviD far and wide. Eventually, you may even be able to choose between a free and Free XviD implementation, and a commercial one that ships with closed-source editing and development tools for 50$, which is the best of both worlds: a Free, compatible codec, paired with quality tools and support.

I know there's been a lot of paranoia, but I think most of it is unfounded.

-inq

P.S. I hate software patents.

[tanksimpson]

Based on what I've read of the licensing terms, I think primitive is right, xvid is in the clear. If this is true, though, can anyone think of any reason xvid.org can't just start distributing binaries themselves? Since xvid is a research project and not a business, there's nothing stopping them from distributing binaries, right? It would be nice to have "official" binaries so that when people discuss results with this codec we all know that we're using precisely the same version, with the same set of features/bugs.

[Marc FD]

I think there is not any XviD "official" binaries because XviD is in ALPHA stage of devellopement (not beta, alpha!!).
There is no interest to distribute a so "immature" codec.
uManiac,nic and koepi make a greate work because they let the XviD team concentrate on the source code, and not on the distribution.
And it's what XviD really need.

(I'm an alpha-tester :cool: , all XviD users are alpha-testers :) )

PS : Don't misunderstand me here : I think even in alpha-stage, XviD is the "better MPEG-4 codec (ever)"(tm) and you can compare it with a finalized MPEG-4 codec like, let's say DivX 5.02 :rolleyes:

[NeVeRLiFt]

@Marc FD


I second that!

Everyone I have got to use XviD could not believe it was still alpha and doing this good ;)