MPEG 4, Windows Media 9 At War

Andy Tai writes "According to this News.com report, backers of MPEG 4 are protesting Microsoft's licensing fee structure for Windows Media 9, which is up to 50% less than MPEG 4's. They accuse Microsoft of blocking the progress to move to an 'open standard' (MPEG 4), posing unfair competition and threatening consumer choice. Of course, what is really needed is a third choice, a totally Free Software media codec solution that's competitive with both Windows Media and MPEG 4."

Comments

I'm extremely confused

[eyez]

Exactly how is it an open standard if you have to pay licensing fees to use it, and assumedly write code to create it?

It seems like they're giving the whole idea of "open standards" a bad name. I realize it's more open than windows media, but I don't really think it's that open.

What am I missing? What are the licensing fees for?

Re:I'm extremely confused

[Koos Baster]

Before Open Source Software became a mainstream notion (say 1990), "Open" as in "Open Standards" used to imply that a company supplied descent documentation with it's API. That's about as open as SUN's OpenLook.

MPEG is "open" in that the standard was developed by a consortium of companies and other institutions. Therefore, it is propriety, patented, copyrighted and whatever... but these rights are not owned by a single company that's reluctant to reveal the ins and outs of its "standard". MPEG is open in that it openly discussed MPEG4's features before it hit the market.

So, although MPEG indeed extorts consumers for using their stuff just like any company, a consortium is a much healthier construction viewed from other company's perspectieves. And therefore ultimately (due to competition) also to customers.

So yes. It is confusing. (And I agree with the majority of posts that only a fully open standard, like Ogg Theora will settle this matter.)

--
The good thing about standards is that there are so many to choose from -- Andrew S. Tanenbaum

Too bad.

[TheSHAD0W]

I'm afraid MPEG will have to make do on half their expected revenue. (Frankly, I suspect it'll be more than half; by cutting their own prices, they'll gain more customers, and since costs for royalties are pretty much arbitrary, they won't have more in expenses to lay out.)

Microsoft can price their product however they please. When they start causing problems, by restricting the platforms their codec performs on, or restricting the performance on other platforms, or if they wait 'til MPEG is dead and then raise their rates, THEN you can slam them for monopolistic practices.

In the meantime, projects like Ogg will proceed, as will DivX, producing competitors MS may prove hard to beat. So let 'em try to take over the market...

Re:XviD

[FooBarWidget]

This isn't just about the codec. It's the standard. XviD implements MPEG-4. However, to use XviD, you still have to pay licensing fees to MPEG4-LA. That's why XviD calls itself an "educational project" so the developers don't have to pay the licensing fees. But the users of the codec still have to pay for a license.

Re:Wow.

[Daniel Dvorkin]

In your example, the raising of prices after killing the competition would be the abuse, not the lowering of prices. Lowering prices is the entire point of competition from the point of view of the consumer.

Um ... and how exactly do you suppose "killing the competition" happens? Look, when a company makes a better product and sells it at a better price, that's competition. When a company makes a product (whether or not it's better -- usually not, because monopolies and shitty products always seem to go hand in hand) and sells it at a better price for however long it needs to do so to drive the competition out of business, even if it's taking a loss in doing so, that's abuse.

Has Microsoft ever, in its entire history, made a better product than the competition, sold it for a better price, and made a profit doing so? I'm not trolling; I'm genuinely curious to know if this has ever happened.

Re:Progress to move to an open standard

[IamTheRealMike]

It should be free for anyone.

Agreed, but I know what my dad would say to that (he works in the UK digital tv industry and is on several digital tv standards boards):

Him: "Son, things like MPEG aren't simple, and take a lot of smart people a lot of time to create. They should be rewarded for their efforts"

Me: "But how can something be an open standard if you have to pay for it?"

Him: "Who says open standards have to be free to implement? It's documented and vendor neutral, that makes it open in my eyes"

Me: "What about GPLd decoders though! Everyone will just end up using Ogg instead."

Him: "What about them? It's easy for people to recreate technologies once the expensive research has been done, Vorbis is based on similar ideas to MP3 for instance. Creating them in the first place takes money though, who's going to do that if all the codecs have to be free of charge?"

At that point I usually shut up, because I don't have a good answer. Looking at the way Ogg is developed I have tremendous respect for those guys, but they are working out their metaphorical basements. See how Tarkin (the research codec) lies abandoned? How would the people who worked on MPEG4 make money without licensing fees? Anybody? I'm sure there must be answers.

Heh, perhaps we can chat about this on irc over the weekend foo :)

Re:Warped Logic?

[praedor]

While I agree with you in principle, in practice it doesn't hold wrt M$. Why? Because M$ IS a court-recognized illegal monopoly violating just about every anti-trust law in existence then and now. Monopolists get to live by different regulations than others, particularly convicted monopolists. The problem here is that MPEG-4 really cannot compete. M$ has such a huge cash reserve and cash flow that even if MPEG-4 matches M$ price on WMP, M$ can still go lower, even to 0 cost for as long as it takes to kill MPEG-4.

While MPEG-4 should drop its price as Apple suggests, M$ cannot be left to run as they wish because of their proven illegal activities. They WILL go to 0 pricing if anyone tries to compete (MPEG-4) on price. M$ can afford it for a lot longer than any (even better) innovators or software producers.

That isn't the market in action as it is supposed to work and is envisioned by la-la land capitalism apologists, that is abuse of monopoly position and leveraging monopoly in one area to gain monopoly in another. Illegal.

Re:They cannot survive selling lower!

[guacamolefoo]

Have you not followed the entire Monopoly cases? Microsoft undercuts its competitors to the point where the competition simply CANNOT sell any lower because they dont have the BILLIONS in resources to stay in business like Microsoft can, their strategy is to out live the competitor.

Sooooo...Microsoft should be forced to continue to charge a high price for its product in order to benefit consumers?

GF

Re:There *is* an alternative - XVID

[mcrbids]

From their website...

"XviD is an ISO MPEG-4 compliant video codec. "

MPEG4 is a framework for video codecs - not an algorithm in its own right.

With MPEG4 video codecs (COmpression/DECompression algorithms) are handled "plugin" style, much like the plugins to WinAmp or XMMS.

Using XviD would still require you to use the MPEG4 video framework, and thus you are still choosing between WM or MPEG4!

-Ben

Re:Wow.

[tshak]

But who said that they were selling WMP9 at a loss?

Re:Wow.

[Ninja Master Gara]

Microsoft's tactics against Netscape went MUCH further than just releasing another, superior browser, onto the market. The core of what MS did that was bad as opposed to Netscape's similar "free" release and success was bundling IE in Windows 95. The Plus! pack release is seldom called into contention, at least partly because IE was godawfully unstable at the time.

Netscape's rise was more like Google's, where it rose to "power" by being more and more favoured by web surfers; it's major competition was also free. We used Internet in a Box which came with Spry Mosaic, but DOWNLOADED Netscape on top of that because it was better.

My god man, Netscape 2.0 had BACKGROUNDS! The web was no longer gray!

Re:Wow.

[Milo Fungus]

Original question: Has Microsoft ever, in its entire history, made a better product than the competition, sold it for a better price, and made a profit doing so? I'm not trolling; I'm genuinely curious to know if this has ever happened.

Your answer: MS Office. Since Win3.11 days, MS Office has generally been easier to use than other similar apps. It's usually been fairly expensive too. But it has a *massive* market share, and the revenue from the Office suite is basically subsidising everything else in MS - operating systems make a small profit, Office makes an enormous profit, and everything else MS makes is actually making significant losses. And Office had to establish this position over the dead bodies of many other well-entrenched packages.

What you say is true, but it doesn't answer the question. Some of the well-entrenched packages (ie: WordPerfect) were superior to Word in the opinion of end users. WP had full functionality by about version 5. The later releases were mainly GUI enhancements (not entirely, but in general). I used to work in IT for the LDS Church, which used WP back in the mid 90's. While I worked there WP was phased out in favor of Word. Many of our users were irate about this, especially when Word would put an indent in the same place no matter what you did (or some similar stupid behavior). In WP you could just reveal the codes and easily see the problem. Not in Word. You could make an argument that Word is superior to WP, but it wouldn't fly so well with a lot of people.

Not a flame, just a nitpick.