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H.264 is royalty free for Internet video that is free to end users (Internet Broadcast AVC) until at least December 31, 2016.
You need to pay a small licensing fee to use an encoder which Google would have to do with all the videos they encode on YouTube, but as far as including the codec in the browser, it's completely free of charge for at least another 5 years - by which time we will have probably moved on to something better.

Now is not the time to be pushing a private agenda, now is the time to get on board with established industry standards and get something more open into the next round.

http://www.mpegla.com/main/programs/AVC/Documents/AVC_TermsSummary.pdf

I am not a lawyer, but I do not believe that H.264 is (or is purely) a software patent. I would note that MPEG-LA claims a number of UK (GB) patents in its pool for H.264 :

GB 564,597
GB 630,157
GB 1,467,491
GB 1,487,113
GB 1,550,219
GB 0460751
GB 2,003,899
GB 2,003,900
GB 2,009,927
GB 2,009,928
GB 2,015,585

(there are more, but you get the picture). If these patents are valid, they could certainly claim intellectual property rights in the UK.

(Note : in the UK patent search system - the "REGISTER ENTRY FOR GB2003899" is

Title POLYMERS CONTAINING IMIDYL GROUPS AND SILYL GROUPS

which is curious, to say the least. I wonder how closely MPEG-LA double-checks and copy-edits the claims submitted to them.)

Pity about all the patents they use but don't actually own. Unfortunately, royalty-free seems to equal indemnity-free (FYI, not a good kind of freedom to have).

http://www.mpegla.com/main/pid/vp8/default.aspx

The linked page is a request for people to come forward if they have any patents covering VP8, not an indication that any such patents have been found. (Of course, with the current state of patents, realistically everything infringes some patent, it's just a matter of finding it.)

Pity about all the patents they use but don't actually own. Unfortunately, royalty-free seems to equal indemnity-free (FYI, not a good kind of freedom to have).

http://www.mpegla.com/main/pid/vp8/default.aspx

Very informative. Do you have a source?

SUMMARY OF AVC/H.264 LICENSE TERMS

AVC/H.264 Licensors

There are about thirty licensors, mostly industrial global giants in manufacturing like Mitsubishi, which began R&D in television 85 years ago.

AVC/H.264 Licensees

There are about 950 licensees, a list which reads like an Asian Fortune 750 in tech.

Very informative. Do you have a source?

SUMMARY OF AVC/H.264 LICENSE TERMS

AVC/H.264 Licensors

There are about thirty licensors, mostly industrial global giants in manufacturing like Mitsubishi, which began R&D in television 85 years ago.

AVC/H.264 Licensees

There are about 950 licensees, a list which reads like an Asian Fortune 750 in tech.

Very informative. Do you have a source?

SUMMARY OF AVC/H.264 LICENSE TERMS

AVC/H.264 Licensors

There are about thirty licensors, mostly industrial global giants in manufacturing like Mitsubishi, which began R&D in television 85 years ago.

AVC/H.264 Licensees

There are about 950 licensees, a list which reads like an Asian Fortune 750 in tech.

If you /can/ watch h264 on your Linux box, chances are you're doing it "wrong", at least from the perspective of the software patent holders that want to charge you for the privilege to do so. This is what the h264/vp8 fight is about.

This move from Microsoft is super-clever - it looks like they're bringing more choice to the table. But the reality is they're just further entrenching h264, because it's in their interests to do so - they can happily afford any patent licensing costs (oh, and they're one of the h264 licensors, of course).

It is free for now ONLY for internet videos offered for no charge.
Products and services other than Internet Broadcast AVC Video continue to be royalty-bearing.

http://www.mpegla.com/Lists/MPEG%20LA%20News%20List/Attachments/231/n-10-08-26.pdf

After all, Microsoft is a member of the H.264 Licensors. They stand to profit by the continued adoption of H.264.

Microsoft may not need to pay either, since as members they may get a free pass (just speculation on my part there).

Microsoft only gets a free pass on paying for their own patents in the pool. They still have to pay fees to every other company with a patent in the pool. They even spend more money paying such fees just to license for its use in Windows 7. So they aren't gaining much in doing this, money wise at least.

Upsmanship?

More like feathering ones own nest.
After all, Microsoft is a member of the H.264 Licensors. They stand to profit by the continued adoption of H.264.

Actually, I can't even see Google getting all fussed about this, because they will not have to pay a license fee in 2016 because its not part of Chrome proper. Microsoft may not need to pay either, since as members they may get a free pass (just speculation on my part there).

They don't profit. Microsoft is on record saying they pay more into the patent pool then they get paid. That's why the add-on only works on Windows. The OS already comes with a license for H.264, so you don't need another to run video in any particular application.

This isn't religion or about technical merit. Who wants to pay up to $6,500,000 a year to use this crap?
http://www.mpegla.com/main/programs/avc/Documents/AVC_TermsSummary.pdf
http://www.pcmag.com/article2/0,2817,2368359,00.asp

Adding support for H.264 is actually useful, unlike Theora support. Also, it's largely a game of upsmanship, basically saying, "here Google, we fixed your browser for you".

Upsmanship?

More like feathering ones own nest.
After all, Microsoft is a member of the H.264 Licensors. They stand to profit by the continued adoption of H.264.

Actually, I can't even see Google getting all fussed about this, because they will not have to pay a license fee in 2016 because its not part of Chrome proper. Microsoft may not need to pay either, since as members they may get a free pass (just speculation on my part there).

It isn't about Theora, and there are potential third party patent claims against Theora too.

The whole point Google Still, there is no reason to run head long into H.264 believing there will be no end to the free use of this rat's nest of patents. Did we learn nothing during the GIF saga? With the time available, the orderly move away from H.264 is clearly the way to go.

So view this Microsoft offering for what it is, not so much as a shot across Google's bow as it is a way of protecting their own pocketbook, even at the expense of their own browser offering. Its all about the future revenue.

This will make H.264 acceptable again for commercial use.

Badly in need of an update, I suspect, but still suggestive is this list from the Wikipedia:

List of video services using H.264/MPEG-4 AVC

There are 951 H.64 licensees, of which a breath-taking number are Asian - global giants in industry, tech and broadcasting. AVC/H.264 Licensees

Google is big. But not that big.

Google hasn't offered to indemnify anybody, as MPEG-LA has.

Who exactly are you claiming that MPEG-LA have offered to indemnify, and what do you claim that they have offered to indemnify them against?

From their FAQ:

Q: Are all AVC essential patents included?
A: No assurance is or can be made that the License includes every essential patent. The purpose of the License is to offer a convenient licensing alternative to everyone on the same terms and to include as much essential intellectual property as possible for their convenience. Participation in the License is voluntary on the part of essential patent holders, however.

MPEG-LA has pledged to "never" charge for serving "free of charge" content over the web right now. That doesn't mean they're not going to charge for it in the future, they revisit the question over and over.

Ok, that's wrong, and despite multiple accounts of being corrected, people here keep perpetuating this myth. They're not going to revisit it. The decision is final.

But the question comes down to what constitutes as "free view" over the web? If you look at major hits such as RayWilliamJohnson, people like that "profit" off of making videos on the internet. He's got t-shirt deals that now have his stuff being sold in Hot Topic stores across the country. He's a pretty big Youtube phenomenon as a result of videos being posted on the internet "for free".

MPEG LA's defines non-free view as "AVC video sold to end users for a fee on a title or subscription basis". So it's very simple: can you view the entire video without being required to purchase it? It's free. If you need to buy it/rent it/subscribe for it, it's not free. Having ads or merchandise or other indirect profit models around or over or in the video is irrelevant.

You're right that everything "costs money" and some things have direct and indirect costs. The difference is that to ensure the internet remains open and competitive for everyone, we need to make sure that as much driving force behind the technology standards used by the vast majority of it are for the public good.

Right, and who gets to decide what is good here?

1) A wide consortium of companies working together on creating H.264, academia, guided by respected standards organisations: ISO, IEC, Apple, DAEWOO, Dolby Labs, France Telecom, Fraunhofer, Fujitsu, Hitachi, Philips, LG, Microsoft, Panasonic, Bosch, Samsung, Sharp, Siemens, Sony, Ericsson, Columbia University, Toshiba and more...

2) Google. Which bought some small company making codecs.

And yet, the automatic assumption is Google has singlehandedly pulled a rabbit out of their hat, because all some people need to know is that it's "free", and may any other annoying details and facts be ignored.

On one side, we have H.264 designed with the feedback of a wide consortium of experts, companies and respected standardization organisations, and very clear and apt licensing rules.

On the other side, Google and their technically inferior, buggy H.264 clone with an untold number of IP violations. But don't take just my word for it.

In layman's terms, we call what the MPEG-LA doing as a "bait and switch".

The above clarifications renders this remark baseless. The problem in this debate is some people prefer to arm themselves with an ideology fueled narrative and a set of outdated or outright wrong talking points about supposed "bait and switch" threats and preserving "freedom", and don't bother to even check what they're talking about.

Q: Are all AVC essential patents included?
A: No assurance is or can be made that the License includes every essential patent. The purpose of the License is to offer a convenient licensing alternative to everyone on the same terms and to include as much essential intellectual property as possible for their convenience. Participation in the License is voluntary on the part of essential patent holders, however.

- AVC/H.264 FAQ

You should check the very careful wording in their own description of the license.

Let's start with basics: if you want to see actual license terms, you have to ask pretty-please will they send you a hardcopy. A unique, one-off artifact sent specifically to you.

When most companies offer a summary of a license, they include language like "while this description is believed to be a fair summary of the terms of the agreement, in the event of any discrepancy the text of the actual license must prevail".

MPEG-LA says its description "may not be relied upon for any purpose." Full stop.

You could call noticing that perhaps-excessive paranoia on my part, or wording it that way perhaps-excessive paranoia on theirs. It's worth considering.

So let's look at the details. I don't care about the viewer-pays scenarios, let's look at the ad- or donation- or plain old volunteer-supported scenarios.

For TV, if they're going to charge at all, they're going to charge either a one-time fee of $2,500 per encoder or recurring fees that start at $2,500/yr until you start getting into millions of reachable viewers. Very reasonable for even an indie TV station or the like.

No royalties at all on videos 12 minutes or less.

For service over the capital-I Internet, if viewers pay no fee (and if there's some unavoidable and ~no more than nominal~ fee they say they can probably arrange to treat that as no fee) to receive the video, there's no license fee either.

That last is new as of about five months ago; for the first ~90% of their existence they explicitly intended to charge you fees even if you weren't charging your audience any. Good luck getting $2500 in ad revenue on your blog.

So why did it take them seven years to momentarily give up on the attempt? They explicitly state they're going to revisit this issue next round: they intend to charge for it if they think they can get away with it. Why would they even consider that? Do they really believe they deserve an extra special tip for so clearly showing us your zits?

Why does MPEG-LA not say, as Thomson does for MP3,

Note:No license is needed for private, non-commercial activities (e.g., home-entertainment, receiving broadcasts and creating a personal music library), not generating revenue or other consideration of any kind or for entities with associated annual gross revenue less ahan US$100 000.00

[Thompson says that about MP3. MPEG-LA refuses to say that about H.264]

Google's taking a big hit to do what they're doing. It's true that H.264 currently has the best of the contending encoders, and probably the best hardware and industry support. It's difficult (not to say impossible) to believe they'd do this purely to kick MPEG-LA to the curb for this -- it's almost laughably low-grade moneygrubbing -- but that's certainly one effect of what they're doing, and there's not much else apparent in the license.

Except for one thing: mpla also say they might unilaterally eliminate their caps on yearly royalty payments.

Yeah. I have to believe Google might just be doing this just because a world in which they don't have to do business with these people is that much better than a world in which they do.

By the format in itself is not. It is 100% proprietary and full of patents.

Unlike H.264, the V8 video format is not a standard. It is 100% proprietary and Google owns some (not all) of the patents that rule the format.

So the going from a STANDARD to a PROPRIETARY video format is not an improvement. It is going from bad to worst.

WebM is not a format but a container that is a ripoff from Matroska (mkv).

Except you got your facts wrong - h.264 is also proprietary. Completely, 100% proprietary. As in over 1,000 patents proprietary, and a patent pool licensing scheme.

h.264 is encumbered. h.264 is proprietary.

-- Barbara

IIRC it also costs oodles for licensing for those making browsers, which in turn raises the costs of making a browser, which in turns hurts competition.

SUMMARY OF AVC/H.264 LICENSE TERMS

For...branded encoder and decoder products sold both to End Users and on an OEM basis for incorporation into personal computers but not part of a personal computer operating system (a decoder, encoder, or product consisting of one decoder and one encoder = "unit"), royalties...per Legal Entity are 0 - 100,000 units per year = no royalty (this threshold is available to one Legal Entity in an affiliated group); US $0.20 per unit after first 100,000 units each year; above 5 million units per year, royalty = US $0.10 per unit. The maximum annual royalty ("cap") for an Enterprise(commonly controlled Legal Entities) is...$6.5 million per year in 2011-15

The MPEG LA licensors are dominated by global giants in R&D and manufacturing. Think Cisco. JVC. Ericsson. Mitsubishi. NTT. Panasonic. Philips. Samsung. Toshiba.

The 940 H.264 licensees round out the list nicely.

The odds approach 1 in 1 that every piece of HD capable video hardware - every piece of hardware that supports data compressed video - in every market segment - supports H.264 out of the box.

There is no such thing as a studio production grade HD WebM camcorder.

No such thing as a WiFi WebM surveillance camera or mobile medical ultrasound scanner.

If the working mother can't monitor her nanny-cam in Chrome - then it is back to Windows 7 and Internet Explorer.

The geek is obsessed with the browser.

But Pandora and the Netflix client can be built into your HDTV. Your video game console. They support content protection. OnLive video gaming can be delivered and marketed the same way.

It is a more uncertain world for Google and AdSense.

But even more so for the geek.

Because the walled garden of the "app" and "app store" takes users away from the relatively open environment of the general-purpose PC. Because the new subscription service models "just work."

MPEG-LA isn't meant primarily to generate a profit

Maximizing profit is a core goal of the MPEG-LA. From http://www.mpegla.com/main/Pages/About.aspx (emphasis mine):

"Our goal is to provide a service that brings all parties together so that technical innovations can be made widely available at a reasonable price. Utilizing our collaborative approach, we help make markets for intellectual property that maximize profits for intellectual property owners and make utilization of intellectual property affordable for manufacturers, consumers and other users."

I'm sorry but it just seems like you have no real idea what you're talking about.

What, like this:

mp3 is not free..
http://mp3licensing.com/royalty/emd.html

h.264 is not free:
http://www.streaminglearningcenter.com/articles/h264-royalties-what-you-need-to-know.html

mpeg2 is not free:
http://www.mpegla.com/main/programs/M2/Pages/Agreement.aspx

(how do I make a proper link here - without the whole url showing up?)

http://www.mpegla.com/main/programs/AVC/Pages/Licensors.aspx for the record, btw - a veritable who's who in the video space.

Actually, the license for internet video is free as long as the content is available for free, in perpetuity. There is a license fee to the supplier of the encoder/decoder, but it's small for the decoder. I have not looked at encoder royalties.

Visit MPEGLA and look in the "Media" section for the press release issued Aug 26, 2010 for more info.

>I know H.264 has some sort of proprietary ties, but they're pretty weak

Weak is not the word I would use to describe the MPEG-LA.

1135 patents from 26 companies in 44 countries does not sound very weak either.

H.264 is not a free codec and consequently, you have to pay if you wish to encode content in it or decode content encoded with it. They just are gracious enough not to charge you for streaming it.

For...branded encoder and decoder products sold both to End Users and on an OEM basis for incorporation into personal computers but not part of a personal computer operating system (a decoder, encoder, or product consisting of one decoder and one
encoder = "unit"), royalties (beginning January 1, 2005) per Legal Entity are 0 - 100,000 units per year = no royalty

The maximum bite for an encoder/decoder is 20 cents a unit.

MPEG LA is geared for licensing production and distribution of H.264 video on a commercial scale. They don't give a damn about your wedding videos until you become a national franchise.

They don't give a damn about the geek's freely distributed Star Trek fan-flick.

For..where an End User pays directly for video services on a Title-by-Title basis (e.g., where viewer determines Titles to be viewed or number of viewable Titles is otherwise limited), royalties for video greater than 12 minutes (there is no royalty for a Title 12 minutes or less) are...the lower of 2% of the price paid to the Licensee (on first Arms Length Sale of the video) or $0.02 per Title (categories of Licensees include Legal Entities that are (i) replicators of physical media,
and (ii) service/content providers (e.g., cable, satellite, video DSL, Internet and mobile) of VOD, PPV and electronic downloads to End Users).

Where an End User pays directly for video services on a Subscription-basis (not ordered or limited Title-by-Title), the applicable royalties per Legal Entity payable by the service or content provider are 100,000 or fewer Subscribers during the year = no royalty

For...where remuneration is from other sources, in the case of Free Television(television broadcasting which is sent by an over-the-air, satellite and/or cable Transmission, and which is not paid for by an End User), the Licensee (broadcaster...) pays...according to one of two royalty options: (i) a one-time payment of $2,500 per AVC transmission encoder..or...annual fee per Broadcast Market starting at $2,500 per calendar year per Broadcast Markets of at least 100,000 but no more than 499,999 television households

The Enterprise Cap for H.264 in 2011 is $6.5 million a year. H.264 is deeply entrenched in theatrical production. Broadcast, cable and satellite distribution. Industrial and military applications. Home video.

There are over 900 H.264 licensees and collectively they dwarf Google.SUMMARY OF AVC/H.264 LICENSE TERMS

You check the button in the install process, Canoncial doesn't. With preinstalls it would be the OEM installing it for you, which makes the OEM a lawsuit target

Canonical licenses mp3 and H.264 for its OEM distributions:

Licensed Companies, Licensees - PC Applications
  AVC/H.264 Licensees

Walmart.com had 212 flavors of the Win 7 laptop and 95 Win 7 desktops on sale this holiday season - and all sold with licensed mp3 audio and DVD video play out of the box.

And as I replied too hastily, I'll continue - OK, you didn't imply that Adobe uses x264 in Flash Player (although you fail to point out how Adobe makes any money from x264). But when it comes to YouTube et al - first of all, I'm pretty certain that at least YouTube can afford the encoders, Google is certainly a big enough to be targeted with lawsuits if they didn't comply. Hell, they even provide a built-in decoder to be used with the tag in Chrome. Furthermore "MPEG LA announced today that its AVC Patent Portfolio License will continue not to charge royalties for Internet Video that is free to end users". So there's that.

There is prior art for the H.264 codec

I'd like to see a document citing prior art for every claim of every patent in the H.264 pool's patent list.

If I instead decided to use the de-facto x264 standard, I increase my browser compatibility across the board

But how much would it cost to either A. obtain a license from MPEG LA to encode your videos using x264, or B. emigrate from the United States? According to a summary of the license terms, the royalty for H.264 use over the Internet is zero until the end of 2016, then $2,500 per copy (the free TV rate) afterward.

Uhhh...sorry, but...are you high? "Not held for ransom" with HTML5, did Steve come out in support of OGG Theora while I wasn't looking? Might I remind you that Steve is backing H.264, which is probably THE most patented video codec on the planet and you seriously talk about open standards and a win for all? Are you serious?

Firefox does not embed IE by default. The user has to install a third-party addon to embed IE, and hardly anyone does that.

Yet you seem to be against even allowing a common API for third parties to add on codecs.

I never said that. Also, I have no idea how this is a reply to what you quoted.

IE's renderer exists on exactly one platform.

So? It's a platform with enough market share that a person could say the solution works for nearly everyone and is therefore acceptable. I just threw your own argument back at you, and you respond with special pleading.

Refusing to support native codecs is like refusing to support WebGL because the best GL implementations happen to be composed of both proprietary hardware and software.

No it isn't. The reasons I gave for not supporting native codecs simply do not apply to WebGL.

Or to make it up to the user whether or not to support that.

It already is up to the user. You're free to install any third-party modifications you want.

That's just a statement about today. Look at the qualifiers I italicized. They will change in the future.

How so?

It should be obvious what I was saying. In the future the statement could become "on some platforms Firefox supports, there is a native video API, and that native video API occasionally supports h.264"

If Linux adoption grows, the "rely on the OS" approach will cover fewer people.

So nVidia cards would become less popular among Linux users?

Yeah, probably. That's actually pretty likely. In any case, a wise decision maker does not assume that they can reliably predict the future.

Or is it that you don't think Linux will grow by vendor support, like Dell's Ubuntu, which includes codecs?

Not all vendors are necessarily going to bundle licensed codecs.

By encouraging the widespread use of H.264 now, we'd just be handing over free leverage to the patent cartel that is MPEG LA, and they will use it...

...for how long? Patents expire.

For 20 years, minimum. Or never. It keeps getting extended because they're always adding newly filed patents that they claim are essential for decoding H.264. Their list of patents for H.264 was last revised a few weeks ago. None of their lists are older than July 1st of this year. Just about two months ago. Even MPEG2, first available in 1996, is having new patents added to the pool. So the MPEG2 pool so far has a total lifespan of 34 years, and counting. And H.264 is likely to have a longer lifespan than MPEG2.

It looks to me like they already have control.

Not over Firefox. And without Firefox, they can't monopolize HTML5 video.

Out of curiosity, do you roll your own IP stack, too?

No, and that can't be done by Firefox, and it's not needed. The IP stack is already a hardened subsystem designed to handle untrusted data. Also, you're invoking the all-or-nothing fallacy.

Giving untrusted websites free reign to feed data to libraries provided by the OS

These aren't all libraries provided by the OS. You advocated loading up any arbitrary codec that happens to be on the system. And it would be a security risk regardless. A default Firefox won't pass ANY untrusted data ANY external libraries, OS-provided or otherwise. This is a security feature. It also won't launch programs to view files without prompting first. It even has countermeasures against sites tricking a user into opening a file, such as by trying to get

More importantly, developers of H.264 encoders/decoders are still are required to pay patent licenses, regardless of whether they make money or not. This makes it impossible to have legal open source implementations of H.264 in the US anywhere that respects our patents.

Canonical licenses H.264 for distribution to its OEM Ubuntu partners.

Explain to me how "open source" translates as "free-as-in-beer."

The fee is scarcely a back-breaker:

For branded encoder and decoder products sold on an OEM basis for incorporation into personal computers as part of a computer operating system, a legal entity may pay for its customers as follows: 0 - 100,000 units/year = no royalty (available to one legal entity in an affiliated group); US $0.20 per unit after first 100,000 units/year; above 5 million units/year, royalty = US $0.10 per unit. The maximum annual royalty ("cap") for an enterprise (commonly controlled legal entities) is $5 million a year in 2010. SUMMARY OF AVC/H.264 LICENSE TERMS

While the H.264 licensing summary might lead you to think otherwise, the MPEG-LA has made it clear that licensing is based purely on the number of units, not the amount of money made, and is absolutely required for free software.

It's a little broader: it appears to allow any "free-to-view" internet video to use the codecs royalty-free, even if that video is being used to make money through e.g. ads. It does exclude video where users are paying to watch it, like Hulu.

From the license summary [pdf], which hasn't yet been updated to indicate the indefinite moratorium:

In the case of Internet broadcast (AVC video that is delivered via the Worldwide Internet to an end user for which the End User does not pay remuneration for the right to receive or view, i.e., neither title-by-title nor subscription), there will be no royalty during the first term of the License (ending December 31, 2010) and the following term (ending December 31, 2015), after which the royalty shall be no more than the economic equivalent of the royalties payable during the same time for free television.

Commercial usage, even without charging end users, off the internet, e.g. with free television broadcasts, still requires royalties.

H.264 has additional license fees for professional use. Yes, most people ignore that.

Upon further investigation, I discovered http://www.mpegla.com/Lists/MPEG%20LA%20News%20List/Attachments/226/n-10-02-02.pdf Which states, in part:

"MPEG LA announced today that its AVC Patent Portfolio License will continue not to charge royalties for Internet Video that is free to end users (known as Internet Broadcast AVC Video) during the next License term from January 1, 2011 to December 31, 2015. Products and services other than Internet Broadcast AVC Video continue to be royalty-bearing, and royalties to apply during the next term will be announced before the end of 2010."

Therefore, the statement in the grandparent comment is incorrect.

in fact, you won't have to pay anything as the hardware decoder is already paid for by the hardware manufacturer, and you don't owe anything for encoding the video, look it up

I will make my videos free to end users, so at this time I will not need to pay any fees. However, if I had planned on charging for access to the videos, I may have gotten into some trouble if I had not read your comment. Thank you.

Fixed those for you.

Thanks for the sour persimmons, Buster.

The first term of the License runs through 2010, but the License will be renewable for successive five-year periods for the life of any Portfolio patent on reasonable terms and conditions...but for the protection of licensees, royalty rates applicable to specific license grants or specific licensed products will not increase by more than ten percent (10%) at each renewal. SUMMARY OF AVC/H.264 LICENSE TERMS

The H.264 licensors fall into three basic categories: R&D [Fraunhofer,] Operating Systems [Apple and Microsoft,] and Manufacturing [Mitsubishi, Philips, Samsung and all the rest]. These companies - among the largest and richest in the world - make their living by providing the infrastructure on which others will build.

There is no intelligible reason for the manufacturer of 3D television technologies to up the cost of 3D production and distribution. The pennies he makes on licensing isn't worth the dollars he loses on sales.

And there's almost two billion chinese trying to make hardware that doesn't infringe pattens so they can sell obscenely cheaper here in the west.

The manufacturer's license for H.264 is $0 - for sales of 100,000 units or less each year.

20 cents a unit - for sales of 100,001 to 5 million units a year.

10 cents a unit - for sales above 5 million a year.

With an "Enterprise Cap" of $5 million a year.

SUMMARY OF AVC/H.264 LICENSE TERMS

The Korean Samsung Group - for comparison - has about a quarter of a million employees and annual revenues of $170 billion.

For now at least.

You have to be realistic.

H.264 isn't just about the cell phone phone and the web.

It's a broadcast, cable and sattelite video standard, a Blu-Ray standard. It is deeply entrenched in industrial and security video.

A search of Google Shopping for "H.264" will return 40,000 hits.

There are 847 AVC/H.264 Licensees

The Asian industrial giants like Mitsubishi are very well represented.

...if Congress tried to actually make it illegal to *give away* your own recordings...

They would run into prior art?

SUMMARY OF AVC/H.264 LICENSE TERMS

Retail sale - disk or download:

where an end user pays directly for video services on a title-by-title basis...royalties for video greater than 12 minutes (there is no royalty for a title 12 minutes or less) are..the lower of 2% of the price paid to the
Licensee (on first arms length sale of the video) or $0.02 per title

Subscription services:

Where an end user pays directly for video services on a subscription-basis (not ordered or limited title-by-title), the applicable royalties...payable by the service or content provider are...100,000 or fewer subscribers during the year = no royalty; greater than 100,000 to 250,000 subscribers during the year = $25,000; greater than 250,000 to 500,000 subscribers during the year = $50,000; greater than 500,000 to 1,000,000 subscribers during the year = $75,000; greater than 1,000,000 subscribers during the year =$100,000.

Sponsorship

Where remuneration is from other sources, in the case of free television [over-the-air, satellite and/or cable transmission]...which is not paid for by an End User), the licensee [the broadcaster] may pay...according to one of two royalty options: (i) a one-time payment of $2,500 per AVC transmission encoder...or (ii) annual fee per Broadcast Market starting at $2,500 per calendar year per Broadcast Markets of at least 100,000 but no more than 499,999 television households

In the case of Internet broadcast (AVC video that is delivered via the Worldwide Internet to an end user for which the end user does not pay..for the right to receive or view, i.e., neither title-by-title nor subscription), there will be no royalty during the first term of the License (ending December 31, 2010) and following term (ending December 31, 2015), after which the royalty shall be no more than the economic equivalent of royalties payable during the same time for free television.

The enterprise cap

In the case of the...sublicenses for video content or service providers, the maximum annual royalty ("cap") for an enterprise (commonly controlled legal entities) is...$5 million per year in 2010.

Renewable five-year license

License will be renewable for five-year periods...on reasonable terms and conditions which may take into account prevailing market conditions, changes in technological environment and available commercial products at the time, but for the protection of licensees, royalty rates applicable to specific license grants or specific
licensed products will not increase by more than ten percent (10%) at each renewal

To sum up:

If you are worth less than $2500 to MPEG LA they don't want to hear from you.

[Retail sale of 125,000 Trek Wars disks @ 2 cents a disk]

Under the existing formula, the licensing cost to Apple, Disney, Microsoft or Google for hosting freely distributed H.264 video on the Internet would be capped at $5 million a year.

Chicken feed.

However, nobody needs to put new content in GIF format because PNG is available everywhere.

MNG and APNG, the animated extensions to PNG, are not available elsewhere. The alternatives to animated GIF are SWF and HTML+PNG+JavaScript.

The very fact the MPEG-LA says there are patents but won't specify which shows that there actually aren't any.

There is aleady a PDF listing patents in the H.264 pool. As for the proposed WebM pool, give it time. MPEG-LA members are still reviewing their portfolios to see which patents are essential enough to go on such a list.

look at Adobe's new feature in Photoshop whereby you can remove stuff from pictures just by painting a boundary around it, and it fills in the background. Now, I'll agree that you shouldn't be able to just copy the code directly from Photoshop and use it in your own application wholesale. But as the laws are set up now, you can't even implement your own version of this feature, and that's absolutely horrible for innovation.

That is simply not true.

You are free to find your own solution to the problem. You are not free to use Adobe's code - wholesale or retail - without a license.

Hell, just look what's going on with the H.264 battle. Not only are some people saying you can't use that codec--by far, the most popular and well-supported codec on the Internet--to make your own videos without paying up to MPEG LA

Your H.264 camcorder ships with an personal-use license.

You can make all the H.264 videos your family, friends and neighbors are willing and able to endure before dragging out the shotgun - like the 8mm home movies and 35mm slide shows of years past - there's not a jury in the world who would vote to convict.

You pay only when you get into commercial distribution in a really big way.

Shorts 12 minutes or less are royalty free.

Royalties on sales by title are 2% of sales or 2 cents a unit, whichever is lower. Unless you are grossing $150K/yr or more, that's pocket change and MPEG LA doesn't want to hear from you.

There are no royalties on subscription sales until you have over 100,000 paying subscribers a year.

Even then, royalties are per subscriber. You can charge $12.50/hr for The Playboy Channel and owe MPEG LA no more than The Lacrosse Channel at 45 cents/mo.

Your home town TV station pays a one-time charge of $2,500 per encoder or on a scale that starts at $2,500/yr for markets of 100,000-499,000. AVC/H.264 Terms Summary

If it comes down to Adobe Flash or HTML V5 H.264 I'll take Flash any day and twice on Sundays! At least Adobe doesn't act like douchebags and make you pony up $$$ just to have flash support in Linux distros. And SD Flash plays beautifully on this 1.8Ghz Sempron I use for a low power netbox, and with the latest Flash I can add a $50 AGP card and go full HD. From what I have seen HTML V5 is frankly a dog, and even in a window it runs like a slideshow.

And let us not forget the real enemy here is MPEG-LA, who unlike Adobe really REALLY likes to sue...a lot. Old Steve may like having only H.264 on his iStuff ( and why not? Apple and MSFT are a part of MPEG-LA) but I prefer having a format I can run just about anywhere WITHOUT having to write a check. MPEG-LA has made it clear that even just using a browser plugin to view H.264 means you WILL pay up.

So everyone can go "poo poo Adobe, poo poo" and I'll be the first to say their past versions of flash left a lot to be desired. But at least it seems they are trying, and aren't going around trying to lock up the web with an AV paywall like MPEG-LA. Why anyone not drinking the iKoolaid would actually want MPEG-LA with their major douchebag behavior to win over Flash is frankly beyond me. And please don't claim the H.264 paywall is a "standard" because it doesn't matter if it is all locked down behind a paywall of patents. I mean, do you REALLY want to help lock web video into a legal minefield that benefits Apple and MSFT while screwing Linux?

You might think differently if you got the manual your $8000 Pro HD camera out and read the manual

Your camera shipped with the generic end-user consumer license.

Your costs for MPEG 4 distribution look like this:

Shorts 12 minutes and under -

$0

Retail sales by title -

The lower of 2% of the price paid to the Licensee (on first arms length sale of the video) or $0.02 per title.

If you aren't grossing $150K+ in sales they have no interest in you whatever.

Subscription sales [The Geek's Strip Club Channel or DVD of the Month] -

100,000 subscribers or less - $0/yr.
100,000-250,000 - $25,000/yr
250,000-500,000 - $50,000/yr
500,000=1 million -$100,000 - $50,000.
Over 1 Million - $100,000/yr

Free TV Broadcast -

1-Time $2,500 fee for each AVC encoder
OR
Annual Fee For Markets Of 100,000 and Over - Starting at $2,500/yr

Internet -

End user does not pay by title or subscription - $0/yr [May in the future rise to the equivalent of Free TV Broadcast]

Enterprise Cap [Commonly owned legal entities] -

$5 million/yr

That is the real cost of H.264 licensing to a service provider the size of Disney or Google. Which means that production, storage and distribution of VP8 video is going to have to be mighty damn cheap to be competitive. SUMMARY OF AVC/H.264 LICENSE TERMS

Actually, they don't indemnify at all. I've seen stories that apparently they are forming a patent pool for Theora and WebM/VP8, but the only place I can't find any confirmation of that is from MPEG LA themselves. The "official stance" referred to by the AC was mentioned in the story about them forming a VP8 pool, but said statement (and VP8 plan) doesn't exist on their site.

And they sue. A lot.

They are founding a patent pool for human gene patents though. That can't be evil at all.

their MPEG licensing fee is on the order of $2 per manufactured device

MPEG-2 PATENT PORTFOLIO LICENSE SUMMARY

VC-1 didn't belong to MPEG either; it was released independently by Microsoft.

That didn't stop the MPEG-LA forming a VC-1 patent pool.

It's hard to imagine MPEG-LA not trying to form a patent pool. The question is how does Google respond. If Google maintain that none of the valid patents apply to VP8 then do MPEG-LA members sue, and risk having their patents challenged in an expensive legal battle with a very well funded opponent. This latter is one of the main differences between VP8 and Theora.

Who says that those (H.264) patents were not owned by On2 in the first place

If On2 owned the patents on techniques that are in the H.264 pool, then they would be listed. If they owned even one relevant patent then Google could have had a massive PR bonus if they'd coupled the VP8 announcement with another saying that H.264 infringes their patents.

or that On2 created that stuff before those patents were even written (e.g. prior art)

More possible, but much harder to prove in court. Especially as it's now open source, the patent owners can go after individual distributors or even users of the CODEC, without needing to fight Google directly.

In most of the civilized world there's no such thing as software patents

Yeah, most of the civilized world except the US, EU, UK, Japan, South Korea, and others...

And there is no point in pretending software is not patentable in the EU - precedent has LONG been established that software solving a "technical" problem as opposed to a "business process" is patentable. Video and audio codecs are already among those issued. (a big part of that is that codecs are not necessarily "software" patents, in that they are fairly straightforward algorithms that can be implemented in "hardware"/firmware/etc as well as software).

Feel free to count the number of countries in this list, but I think it's over 25... http://www.mpegla.com/main/programs/avc/Documents/avc-att1.pdf