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

Wow.

[NerveGas]

It's not often that people become angry because a corporation is selling things cheaply.

Rather than be mad at Microsoft for charging so little, I'd be mad at the MPEG body for charging what they do.

steve

Re:Wow.

[Ninja Master Gara]

Undercutting to gain market control and then skyrocketing prices is the reason anti-trust legislation exists.

Re:Wow.

[oliverthered]

Wrong,
it's the abuse of a monoply position to unfairly leverage another market.

So if they bundle WMP9 with a monopoly product and then set the licensing at a loss making level then that's unfair, since there leveraging a monopoly product (windows) by intergrating WMP9, and then undercutting the competition on content costs.

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:Wow.

[sharkey]

So if they bundle WMP9 with a monopoly product and then set the licensing at a loss making level then that's unfair,

Hell, they can leave out the bundling. Use the profits from Windows, Office, etc. to make it possible to undercut the competition for WMP2 is dumping in and of itself. The bundling is the kick in the nuts for the enemy who's already cut off at the keeps due to the MS product dumping.

Re:Wow.

[ergo98]

Firstly again this is anti-Microsoft revisionist history: Netscape came out with a full featured virtually free browser that virtually no one actually paid for (everyone was a "educational" user), destroying the market for companies like Spyglass. Indeed, when IE first came out you had to buy it in the Plus! pack.

Secondly have you heard of Mozilla? What about Opera? Either are VERY credible competitors to Internet Explorer. Opera even charges money for their browser.

Re:Wow.

[blazerw11]

MS Office. Since Win3.11 days, MS Office has generally been easier to use than other similar apps.
I think that Office is probably still the best. However, have you ever put a non-techie on a new version of Word and listened to them scream at their computer about all the "intelligent" changes it trys to make?
Also, I don't think they can make the help system any worse. When I click on Help, I don't want Excel taking up half the screen and help taking up the other half. That makes both apps unusuable.

Also IE. Netscape sucked, IE worked, prices were the same (free).
For clarification:
1. Netscape was not originally free (as in beer).
2. IE 2 sucked.
3. IE 3 sucked (a bit less).
4. IE 4 was almost as good as Netscape 4 (some would say as good.)

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.

Basic economics

[tempfile]

If a competitor offers a comparable product for a lower price than you do, he will sell more. The MPEG 4 people should rather lower their fees instead of complaining how evil MS is for making low prices.

If they're pissed at MS...

[jpmorgan]

If they're angry that Microsoft is selling WMA9 for 50% less than MPEG-4, imagine how pissed they'd be with a fully Free software solution, selling for 100% less than MPEG-4.

Pot, meet kettle.

[Hayzeus]

It's like watching Hitler and Stalin Jello(tm)-Wrestle -- who to root for?

Gawd, more whining from an also-ran

[stratjakt]

Let the MSFT-flaming commence.

Of course MPEG4 could be:

a) cheaper
b) better
or
c) all of the above.

I don't need another 'open standard' like MPEG2.

Re:Gawd, more whining from an also-ran

[thelexx]

"if Microsoft wasn't around as this big tough huge competition, things wouldn't progress nearly as much"

Yeah, like all the progress from the startups that never started due to VC's refusing to fund a business that even _might_ compete with MS.

Microsoft and Standards

[tyrani]

I think that Microsoft is trying very hard to create the standard rather then accept a standard. As in the past, Microsoft wants to have ownership of important software and video is the next major software hurdle.

Calling the Kettle Black

[BigumD]

I can't believe that MPEG-LA would even consider airing this out publicly.

"You're killing innovation because you charge less than us"

Please... If you were really that worried about adoption of your standard you would either A) Drop your license rate, B) Open your codec completely or C) Make a better product than MS' and the cost is a moot point.

It's hilarious to see people cry foul at Microsoft when their business practices are practically the same.

Let me get this straight....

[ZoneGray]

Let me get this straight... these folks say they're promoting an "Open Standard" that costs twice as much to implement as much as Microsoft's proprietary solution?

Did the definition of "Open" change while I wasn't looking?

Re:Let me get this straight....

[stratjakt]

They define "open" as "We will sell it to anyone"

They define "proprietary" as "Microsoft will sell it to anyone".

Pure PR move. They count on the geek community viewing Microsoft as evil, vile monsters, and themselves as a committee of care bears.

Re:Let me get this straight....

[benwaggoner]

No.

MPEG-4 is open because all implementation details are public. You can get a copy of the standard, and build your encoder, decoder, server, etcetera based on it. No NDA's to sign or anything. You have to pay license fees in some cases if you distribute commerical products, but writing the software is something anyone can do.

This isn't true with Windows Media 9. While some details are avalable, not all are, and some are under restrictive licenses.

Um. Yeah right.

[MetalHead666]

"posing unfair competition and threatening consumer choice" - Of course... Don't you think Intel would have said something like that when AMD started selling cheaper CPUs? (Not nessecarily better, just cheaper). And what about Star Office? Cheap or even for free at times. It's just plain ridiculous to start complaining about the opponents' pricing points, instead of pushing your own advantages. But, of course, as far as "consumer choice" is regarded, a free alternative would probably make both of the others go bonkers.

MP3 is not MPEG3

[missing000]

You don't understand what an mp3 is.
mp3 IS NOT MPEG3. It is MPEG1, layer 3.
MPEG4 is not an mp3 replacement.
See this for details.

No.

[spanky1]

Since when does open == free?

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

Progress to move to an open standard

[FooBarWidget]

They don't want Microsoft to block progress to an open standard? Then they should get rid of that stupid MPEG-4 licensing fees! It should be free for anyone. The licensing fee issues have blocked the progress of a lot of open source MPEG-4 codecs, like XviD.

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:Progress to move to an open standard

[platypus]

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.


I'll help you. The answer is science. This old fashioned thing they do on universities. There are these people called scientists, who gave and many still give a flying shit about "patent license fees". Without them, all these "lots of smart people" working on compression schemes would still live in a cage and go in the woods to berry for their daily food.

The idea that mp3 was so original that ogg wouldn't exist without it is blatantly wrong. At best, it showed that there is a market for that which motivated the creator, but nothing more.
All the foundations were well known long before mp3 emerged.

The jello...

[wiredog]

maybe they'll both drown.

They cannot survive selling lower!

[Viewsonic]

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. They (MPEG) will eventually go belly up, like most of Microsofts competitors. This is standard Microsoft Monopolistic tactics. Find market to take over, then release a product far cheaper than competitor with NO INTENTION of making a profit, watch competitor unable to compete with price wars, watch competitor fold shop. Microsoft wins!

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:They cannot survive selling lower!

[Zathrus]

Again, name one instance where MS raised prices AFTER the competition went away

Both Office and Windows exhibit this behavior. Back when Office had stiff competition from competing suites the price was lower. When Windows was facing off against OS/2 it was cheaper as well.

We may see a reduction in price in the near future, since there is some backing behind competing office suites (with HP and Gateway bundling non-MS suites, plus OSS products like AbiWord and OO.org). Windows is feeling increasing pressure on the server pricing from Linux as well.

That said, I can't really whine about the royalties on MPEG4 vs MP9. The royalties on MPEG4 are generally considered excessive in the first place, particularly since most of the R&D by various companies was done as a tax write off. This really isn't a case where the competition can't afford to match prices.

It's really amusing watching this thread as people try to decide which is the lesser of two evils.

room to prove themselves?

[The Evil Couch]

As many such issues get ironed out, supporters of MPEG-4 want to ensure that it has room to prove itself in the market.

yes, as I recall, there was a college kid who coded a peer to peer network so that he could swap mp3s with his buddies. he called it Napster. the guy had absolutely no room to prove himself in the market and until the lawsuits rolled out, he was dominating it.

another college kid coded a windows gui for playing mp3s. he called it Win-Amp. he eventually got his product bought by AOL-TW for several million and with virtually no marketing, winamp is one of the most preferred mp3 players out there.

point is, you don't need "room to prove yourself". if your product is superior, the market will MAKE room for it.

Neither standard is open

[rknop]

From a free software purists point of view, does it matter who wins? Neither format is an "open" format.... MPEG-4 may be developed by an industry consortium, but as with so-called RAND licencing, unless I misunderstand something their licencing fees make it impossible to implement the code legally in free software. (Is this the case? I'm guessing that MPlayer's mpeg4 support is dubious legally.)

What would be best is that if they make it contentions and messy enough fighting each other that both standards are weakend. That will make Ogg Theora look even that much more attractive to companies and the world at large once it comes out, and hasten the support of Ogg Theora. With some luck, that will become the standard, or at least a standard, that is so widely supported that those of us who care about and pay attention to these things can just use it.

-Rob

Re:Neither standard is open

[benwaggoner]

The licensing terms aren't that bad, and getting better for newer versions. For example, the forthcoming AVC MPEG-4 codec will be free to implement in all no-cost software. Even now, you get a pass on the first 50,000 distributed players. MPEG-4 is less difficult do deal with than MP3 licensing, and there are certainly lots of stuff in the Free Software community that can author and play back MP3 files!

MPEG-4 is open because full implementation details are public. While you certainly need to pay to do commerical products with MPEG-4, all details are available for implementation. This NOT true of Windows Media 9. There are nearly a dozen companies today competing to develop the best MPEG-4 encoder. But the only company that can produce the WM9 codec is Microsoft.

And Ogg Theora is still vaporware, with a public release not until this summer. It's based on VP3 and Vorbis, neither of which are as efficient as today's MPEG-4, let alone the next generation codecs like AVC and the AAC-SBR audio codec, both of which should be in products this year.

One Robber Baron to Another

[javahacker]

Let me understand this.... Microsoft didn't decide to price fix with the MPEG4 group, which would be an illegal practice, but instead decided to use their marker position to undercut them, which is also probably an illegal practice. This is the complaint?

Not as Simple as it seems

[the-banker]

It is true that MPEG-LA is being ridiculous. I have no sympathy for them and we can all see what 'reasonable and non-discrinatory' type licensing schemes get you.

That being said, keep in mind that what is true today may not be true tomorrow. It may not even be true today. Er...

Anyway:

1. WMP9 may be cheaper _right now_. MS can change that tomorrow. WMP10 may be 2x as much.

2. Just because the CODEC is cheaper doesn't mean its cheaper to implement Windows Media Streaimng over a solution streaming MP4.

3. WMP9 limits (to what degree is debateable) your audience.

4. Both of these technologies are on the path of the Dodo, IMO. Just as Real Technologies has fallen from techno-marvel to techno-garbage, so will these.

The past has shown that a truly open standard usually emerges in these areas, via governmental intervention or not. NTSC for North American television. Whatever guage the current railroad system runs on. An RJ-11 phone jack. Streaming video is just too young to be at that stage yet.

OpenDivX is dead

[FooBarWidget]

I'm surprised people even think about OpenDivX today. OpenDivX is dead, for a long time now (more than a year).
In case you didn't know what happened: Project Mayo suddenly closed the CVS, removed the source code and used that source code to create their own, proprietary DivX 4 codec. OpenDivX isn't developed anymore. It's codebase is dead. The latest release (from more than a year ago) is full of bugs.

Oh, and DivX is not OpenDivX in case you didn't know. They are 2 completely different things.

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.

This worked so well for Netscape...

[TheConfusedOne]

1) Drop the license rate.
MS called it "cutting off their air supply" if I recall correctly.
2) Open your codec completely
Then how can you get any license revenue from it?
3) Make a better product
It was widely regarded that the versions of NS were far superior to IE up to 4.0 (and there it's a debate).

The foul is something called dumping. The practice of below cost in an effort to drive competitors out of the market.

Now whether MS was dumping or MPEG-LA was gouging is something to be decided by the courts.

Re:Unfair?

[Waffle Iron]

Can the MPEG Group COMPETE or not price-wise?

Of course not. Nobody who doesn't have a $40 Billion war chest and a direct distribution back door hook (Tools->Windows Update) into 95% of the world's computers could possibly compete.

That's why we have laws that are theoretically supposed to prevent this kind of market abuse.

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.

There *is* an alternative - XVID

[WD]

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

There is.... It's called XVID

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:Just do what I do

[benwaggoner]

Computer playback is a relatively minor aspect of MPEG-4. MPEG-4 projects are in progress on integrating playback in everything from replacing the GSM codecs for audio transmission in cell phones, to HD DVD with red laser, to replacing MPEG-2 in set top boxes, to replacing Flash for interactive presentations.

MPEG-4 is really meant to replace MPEG-1 and MPEG-2, not QuickTime, Real, and Windows Media. Of course, given those open standards (with HIGHER licensing fees) are responsible for probably 98% of all digital video watched worldwide, that's the real game. MPEG-1 and MPEG-2 are used in VideoCD, DVD, digital cable, etcetera.

Windows Media 9 is incredibly good for computer-based authoring and playback, but is a Win32 only system right now. MPEG-4 already works on all kinds of devices.

Re:yet another stupid anti-microsoft thread.

[cant_get_a_good_nick]

Does anyone remember that browsers didn't use to be free until Internet Explorer came along ?
Netscape was de-facto free well before IE came along. Early on, they figured that they needed to get the browser out to everybody to make it THE platform. Anyone that actually paid for it, well that was found money. They really wanted to make money from servers, bu Apache and IIS killed them on this.

MS Has Seen the Error of It's Ways

[alteran]

Microsoft's spokesman:

"Lowering and removing licensing barriers is not only great for the consumer electronics and software industries, but also offers consumers the benefits of better quality video at smaller file sizes," said Michael Aldridge, lead product manager for Windows Digital Media division at Microsoft.

I don't think I have anything to add to this except a smiley. ;-)

I'd love a free software option....

[DesScorp]

But having to say "gnu/mpeg" all the time would be annoying as hell....

Determining Price?

[Ringwraith]

So what would be a fair price? This does seem to be a little suspicious -- the very low price -- but how much is something like that worth? For that matter, how much is any piece of software worth. I never understood those people who were trying to get money back from MSFT for overpricing Office. I mean, how can you even determine what the price is for something like that? Isn't it whatever the market can bear?

Re:Free implementation?

[Fnkmaster]

Yes. Patent license fees. The standard is completely "open" in the sense that you can read full and complete specs and probably even get your hands on a reference implementation without cost. Of course, to distribute any product using the MPEG-4 standard, whether distributed for free or for charge, requires licensing a patent bundle from the MPEG consortium, patents which were filed by the members of the MPEG consortium.

This is RAND licensing, folks. The same fine mess the W3C wants to get into. It hinders adoption, plain and simple, and locks out the Free Software community. I don't mind so much if companies want to keep intellectual property to themselves, but don't go around claiming it's a fucking "standard" if I can't implement it without paying you a fortune for the right to do so.