January 21, 2014

New Proposed H.265 Licensing Agreement Means Content Creators Will Never Pay Royalties

What might seem like a boring announcement on the surface, is very important for the future of the web, and more specifically, 4K video. MPEG LA, the group that handles licensing for H.264 -- and now the HEVC codec -- have worked with major companies on a new licensing agreement to settle any royalty issues for using the codec. While the agreement isn't 100% final yet, at least there are now guidelines going forward about who will be asked to pay for the usage of the codec. Click through for more on this announcement and how it may affect you.

Here is Streaming Media on the announcment:

The terms are better for content publishers. Specifically, there are no content-related royalties; if H.264 video is sold via pay-per-view or subscription in sufficient quantities, royalties will apply. With HEVC, there will never be any content-related royalties.

And:

The terms are more expensive for encoder/decoder vendors. Both H.264 and HEVC excepted the first 100,000 units, and both charge $0.20 per unit after the first 100,000. However, with H.264, the royalty dropped to $0.10 after 5 million units and is capped at $6.5 million through 2115. The HEVC royalty never drops, and is capped at $25 million.

This means that HEVC is going to be more expensive in general for those who sell software/hardware that encodes or decodes H.265. In the long run it may not make too much of a difference, but it could mean that H.265 is slower to get off the ground because of the added expenses. The codec at its best should be 50% more efficient, but it's going to come down to who really needs it in the beginning. For HD it's not going to be as important to switch over, but 4K really benefits from the added efficiency, especially as streaming is going to be the first way that most people get 4K content.

The issue in the past regarding H.264 was that at the end of 2015, the MPEG LA group was set to start charging anyone and everyone who used the H.264 codec to upload or distribute video online. That includes anyone uploading videos on the web to sites like Vimeo and YouTube. While being impossible to enforce in the first place, MPEG LA did respond by extending the 2015 deadline indefinitely (which also means that they can essentially revoke it at any time). Now with the new H.265 codec, that will never be something content creators will have to worry about.

We'll just have to wait and see how H.265 adoption rolls out -- which in the end could mean money saved on bandwidth for everyone, especially mobile devices. To read more about the announcement head, on over to the Streaming Media and MPEGLA sites.

Link: MPEG LA Announces License Terms for High Efficiency Video Coding (HEVC/H.265) -- MPEG LA Website

[via Streaming Media]

Your Comment

17 Comments

Now that Manufacturers are jumping onto Google's VP9 CoDec...

January 21, 2014 at 8:35AM, Edited September 4, 11:45AM

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Tulio

Yeah, I mean we all know how prominent VP8 is nowadays ;)

January 21, 2014 at 10:07AM, Edited September 4, 11:45AM

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alex

That is what Blackberry said of the ipHone.
Check how many manufacturers signed up for VP9 as it is 100% free.

January 21, 2014 at 4:17PM, Edited September 4, 11:45AM

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Tulio

One can only hope that vc9 will finally neuter MPEG LA and consign them to the trash bin.

January 21, 2014 at 8:36AM, Edited September 4, 11:45AM

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Frank

Anyone that actually still thinks that Google's codec is going ANYWHERE is utterly delusional. Hate on MPEG and be all "fist in da air to da man!" as much as you want, with all the equally delusional "FREE and OPEN!!" motivated blather that comes with Google (Android etc.) crap.

Oh but wait... VP8 was already going to overtake the world, right?! Erm... OOPS. Oh right. This time everything is going to be TOTALLY different. I forgot.

January 21, 2014 at 9:39AM, Edited September 4, 11:45AM

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Shorty

Well, it is a bit different.

With VP8, Google never had a chance because they didn't have chipmakers featuring hardware support for VP8 decoding, while H.264 was an already-entrenched standard with hardware support.

With VP9, Google DOES have hardware support. And H.265 is not an entrenched standard yet.

Does it guarantee success for VP9? No. But you can see that the situation is more competitive. Hence today's announcement from the H.265 folks. They wouldn't have done this if they were feeling totally confident and relaxed about H.265's adoption.

January 21, 2014 at 2:27PM, Edited September 4, 11:45AM

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Bring on the x265!

January 21, 2014 at 10:36AM, Edited September 4, 11:45AM

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Hampus

Pretty big news, should this be ratified. Google/YouTube was obviously an important factor for the free use permit for the streamers. The hardware rates are peanuts as well. $25M cap for a major manufacturer is an insignificant amount, since it applies across the board. (which is why the HEVC adoption was never a problem for them in the first place) This also allows major streaming sites not named YouTube to save face while adopting a more efficient compression codec. FWIW, I expect the major networks to begin offering free 4K content for their prime time shows beginning this fall (aka 2014-15 TV season). Hulu, YouTube, Amazon Prime should be there as well. Vimeo? You'd think they ought to be eager not only to join the crowd but to lead the rest of the contenders ... but then you'd be wrong.

January 21, 2014 at 10:48AM, Edited September 4, 11:45AM

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DLD

I concur with all of this, including the timescales.

January 21, 2014 at 1:45PM, Edited September 4, 11:45AM

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marklondon

...ah, except some shows would need to be upscales to be fully 4K, particularly Sleepy Hollow, Intelligence, Almost Human (if that's still on the air) etc. Hollow only just makes its SFX deadlines now, and that's in 1080.....

January 21, 2014 at 1:47PM, Edited September 4, 11:45AM

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marklondon

Right. One expects the upscale for the Arri Alexa made shows, which is not too bad of an up-res off ~ 2.9K, especially in these early days of 4K streaming. A lot of programs will, however, be switching to 4K cams over the summer, while downscaling for the OTA.
.
PS. The free HEVC stream use doesn't help Netflix, Amazon Prime, Hulu as much because they are defined as paid streamers. This is why Netflix is using their own EyeIO codec. Using one from an outsider may be a tad risky but Hulu and Amazon may not have much choice but to go with VP9. The major network streams will probably be considered "free" like most of the ad-supported YouTube clips and thus royalty free.

January 21, 2014 at 9:40PM, Edited September 4, 11:45AM

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DLD

Both sound good to me, but will they be added to Adobe Media Encoder CC?

January 21, 2014 at 4:27PM, Edited September 4, 11:45AM

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Rob

There's an article on Yahoo tech about the 4K TV's and streaming. It has some good point and some not so good. But decide for yourself.
http://www.yahoo.com/tech/all-these-things-muddy-the-picture-for-uhd-732...

January 21, 2014 at 11:11PM, Edited September 4, 11:45AM

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DLD

Cool, but how long until a publisher can distribute *only* in non-h264? As it is, there are too many iPads out there which support hardware decoding of only h264 and software updates won't change that.

January 22, 2014 at 4:10AM, Edited September 4, 11:45AM

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Netflix shares zoomed up today in the after-market trading following their earnings/subscriber total announcements. Also, Hastings came out and said that the recent "net neutrality" ruling will not effect them.

January 23, 2014 at 12:00AM, Edited September 4, 11:45AM

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DLD

Trans code into certain formats and the footprint no longer exists.

If, a piece goes past 100,000 then it likely will be part of the production costs along with all other license fees.

That is a welcomed problem to have at that point.

A judge would laugh the suit out of court anyway as Canon or Nikon promo pieces demonstrate that these devices are meant for and sold as film production tools, and h.264 LA would be left holding their collective members.

January 23, 2014 at 9:26PM, Edited September 4, 11:45AM

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Rob Manning

well, for 25million HEVC year cost, one can pay the enhancement of VP9 to be closer to HEVC and then forget such payments.

February 13, 2014 at 5:39PM, Edited September 4, 11:45AM

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bgm