MPEG Founder Says the MPEG Business Model Is Broken (chiariglione.org)

theweatherelectric writes: Leonardo Chiariglione, the founder and chairman of MPEG, argues on his blog that the current MPEG business model is broken. He writes, "Thanks to [MPEG's] 'business model' that can be simply described as: produce standards having the best performance as a goal, irrespective of the IPR involved. Because MPEG standards are the best in the market and have an international standard status, manufacturers/service providers get a global market of digital media products, services and applications, and end users can seamless communicate with billions of people and access millions of services. Patent holders who allow use of their patents get hefty royalties with which they can develop new technologies for the next generation of MPEG standards. A virtuous cycle everybody benefits from." But, he argues, the MPEG model is now in crisis because the forthcoming AV1 video format from the Alliance for Open Media means that "everybody realizes that the old MPEG business model is broke, all the investments (collectively hundreds of millions USD) made by the industry for the new video codec [HEVC] will go up in smoke and AOM's royalty free model will spread to other business segments as well." Chiariglione goes on to explain what can be done: "The first action is to introduce what I call 'fractional options.' ISO envisages two forms of licensing: Option 1, i.e. royalty free and Option 2, i.e. FRAND, which is taken to mean 'with undetermined license.' We could introduce fractional options in the sense that a proposer could indicate that the technology be assigned to a specifically identified profile with an 'industry license' (defined outside MPEG) that does not contain monetary values. For instance, one such license could be 'no charge' (i.e. Option 1), another could be targeted to the OTT market etc."

"The second action, not meant to be alternative to the first, is to streamline the MPEG standard development process. Within this a first goal is to develop coding tools with 'clear ownership,' unlike today's tools which are often the result of contributions with possibly very different weights. A second goal is not to define profiles in MPEG. A third goal could be to embed in the standard the capability to switch coding tools on and off."

Comments

Better Idea...

[galvanash]

...let it die.

Re:Better Idea...

[jonsmirl]

Here lies there conceptual problem: "My concerns are at a different level and have to do with the way industry at large will be able to access innovation. AOM will certainly give much needed stability to the video codec market but this will come at the cost of reduced if not entirely halted technical progress. There will simply be no incentive for a company to develop new video compression technologies knowing that it assets will be thankfully – and nothing more – accepted by AOM for use in its video codec."

He simply doesn't get network effects. It is not 'thanks' that you get by putting the technology into a free pool, when everyone does this it creates a broad and compatible market for everyone to sell into. The only group that does not benefit from this are the NPEs since they don't sell anything.

Look at all of the technology going into Linux and tell me the only thing people are getting out of Linux is 'thanks'. Royalties are not the only way to make money (unless you are a NPE).

Re:Better Idea...

[Bruce Perens]

Research into codecs will not stop because nobody is paying for codecs. For example, our research into the digital voice codec "Codec2" has progressed to the point that our fully Open Source codec can encode clear voice into a 700 bit per second bitstream. It is an improvement over previously available commercial codecs, and our software modems, when used with SDR radios, yield about a 10 dB improvement over the modulation all vendors were previously using for digital voice two-way radios.

The problem with MPEG is that many entities, from individual researchers to large, deep-pockets companies, were willing to put in effort to make software just as good or better, but under Open Source terms. MPEG made itself the poster boy for its own elimination, as has every other entity that has attempted to push a royalty-based technology as a web standard. Many people want an open web, and are willing to pay for the research without then monetizing it.

Re:Better Idea...

[bzipitidoo]

The revolt against GIF that culminated in PNG over 20 years ago showed that royalty free and patent unencumbered works. I recently learned of Free Lossless Image Format (FLIF), currently in development and intended to replace PNG, and it looks great. Handily beats WEBP, and also addresses animations, the reason GIF didn't completely die. FLIF alone shows that PNG was not a one time freak. But there's also Xiph, which has been working on audio and video codecs for decades, giving us Ogg Vorbis and fairly recently, Opus. And soon we will have AV1.

Opus supposedly bridges the gap in audio between music and voice, better at both than even the best codecs tuned specifically for one or the other. Opus is good at voice, but from my own experiences, no, it's not the very best. Shouldn't VoIP software use Opus, if it was the best? I'd love to abandon Skype. This is the first I've heard of Codec2, thanks for mentioning it.

The area most in need of an update is lossy stills, where JPEG is still supreme. (Why didn't JPEG 2000 catch on?) I saw a comparison on stills between AV1 and JPEG, and in my opinion, JPEG is clearly superior. I hope AV1 improves there, but I wonder if we could have a "double" JPEG, bump the 8x8 blocks up to 16x16, just as a stopgap?

Yet despite all this evidence, IP rights holders still refuse to concede that unencumbered works. What is accomplished by moaning the clearly wrong idea that codecs will not be developed? They really think they can persuade some deep pocketed organizations to swallow that propaganda and join with them? I don't follow that notion of "fractional options", and I don't see why anyone else should either, especially with AV1 in the wings. Meantime, for video I'm sticking with VP9 and Opus (and webVTT) inside WEBM.

Re:Better Idea...

[Bruce Perens]

There is really a relatively small group of researchers working on all of these codecs. For example, Jean-Marc Valin is a big contributor to Opus, also contributed to Codec2. A lot of them are radio hams too, and I run into them at conferences devoted to SDR.

Rent-Seeking

[Anonymous Coward]

The current MPEG "business model" has a name: rent-seeking.

Anyone trying to profit from the MPEG standard can go DIAF.

VERY hard to beat the alliance

[raymorris]

The summary mentions they are competing with the Alliance for Open Media. AOM was founded by Amazon, Apple, ARM, Cisco, Facebook, Google, IBM, Intel, Microsoft, Mozilla, Netflix and NVIDIA. Other AOM members include AMD, Hulu, and more.

AOM members serve up over 80â... of the world's internet traffic, and decide which codec it will use. Almost all the internet traffic is handled by network based on equipment made by AOM members. AOM members design nearly 100â... of the world's CPUs. 98â... of consumer devices (computers and phones) run operating systems made by AOM members. You can't beat AOM unless AOM somehow destroys itself.

Even is just Netflix and YouTube chose to offer a codec which was playable on Android, iPhone and Windows, that would be hard to beat. And all those companies are AOM members - plus many more, including Intel, AMD, and ARM.

MPEG is going to need a RADICALLY different business model, unless they get extremely lucky and invent something far better than what all the AOM members can come up, or AOM destroys itself.

Re:VERY hard to beat the alliance

[Anonymous Coward]

MPEG?

Re:VERY hard to beat the alliance

[darkain]

The radical new MPEG business model, which corrupts special characters.

Re:VERY hard to beat the alliance

[ragahast]

iOS 11 assistive typing, I think. In some other threads people have been spamming the instructions to turn it off.

The world doesn't need you!

[Gravis Zero]

What MPEG is learning is that in reality the world does not need them because open standards are far more cost effective,

Re:The world doesn't need you!

[Ramze]

Yep.

MPEG is from the pre-internet era of media. Back when content was purchased on disk, it made sense to have a licensed standard for MPEG, MPEG2, and even MP3. MPEG4 for Blu-Ray was really the last gasp.

Now, everything is streamed online. While Hollywood was fine paying a few cents on the dollar for encryption and compression on disks, streaming media sites are looking to cut costs.

Netflix, Hulu, Google/Youtube, and others are big enough to make their own standards and cut out the MPEG group entirely. They even have different goals as there are different methods to adjust quality over live streams vs a pre-compressed file.

I can't say I'll be sad to see MPEG go -- they were vicious in protecting their licensing and downright bullying in their negotiations, and the lack of alternatives held back progress for years. Now that real alternatives are here, they want to change... ha. good luck w/ that.

Re:The world doesn't need you!

[cas2000]

Back when content was purchased on disk, it made sense ...

"it made sense" is not the term I'd use.

"paying rent to the MPEG patent trolls was unavoidable" is more accurate.

Nobody should shed a tear for these trolls. They don't deserve any sympathy. They benefited from being parasites for far too long as it is. Now, they can go die in a fucking fire. And piss on them after the fire has gone out, not before.

Re:The world doesn't need you!

[roca]

VP9 hasn't become dominant but it has been beating HEVC in many markets. http://1yy04i3k9fyt3vqjsf2mv61...

It was Microsoft who drove the purchase price of browsers to zero, when they gave away IE to try to "cut off Netscape's air supply" in the famous phrase.

Google has never really "funded" Mozilla; they have always paid for search traffic, just like they pay Apple for iOS search traffic.

Re:The world doesn't need you!

[jabuzz]

All the standard definition TV is MPEG2 based here in Europe or anyone on DVB-T and most of ATCS is MPEG2 based as well. Consequently broadcast TV will in part use MPEG2 for some considerable period of time.

But here is the rub the MPEG2 patents run out in just 15 days time on the 14th of February when 7334248 expires, which managed to sneak a whopping 1394 days extension from first filing. This is the only remaining patent from the MPEG-LA on MPEG2, as 6181712 expires *today*.

Royalty-free codecs have won

[roca]

Wow. That's basically a declaration of surrender by the chairman of MPEG. This is a great day for free software. It's been a long time coming.

This just in

[Opportunist]

You can leech from companies for a while until they find out that it's cheaper to cut you and develop it themselves. This is basically what happened here. That "Alliance for Open Media", you know who that is? According to their Wikipedia article it is "Amazon, Apple, ARM, Cisco, Facebook, Google, IBM, Intel Corporation, Microsoft, Mozilla, Netflix, and Nvidia". Notice something in that lineup? Makers of networking hardware/software, makers of CPUs/GPUs along with content providers and the makers of the tools to show that content. In other words, everyone that MPEG sold to.

They simply noticed "Hey! Instead of throwing that money at these goons, throw it in a pool and let's develop a standard that suits OUR needs!"

Plus, no rent to pay after we have it.

The easy reader version

[DrYak]

The MPEG model until now :
- create a standard (e.g.: MPEG 1 Video, MPEG Audio Layer I).
- concentrate on making the best compression, irrespective of patent situation
- because good compression and official standard, MPEG gets extremely popular and implemented everywhere.
- all the MPEG creators who hold patents band together, form a patent pool.
- the use the popularity of the standard and their patent pool to extract as much money as possible from as many people as possible.
- re-invest the money left over after the CEO's pay into producing the next standard. (e.g.: MPEG 2 Video, MPEG Audio Layer II, etc.)
- rinse and repeat

The problem (not directly clearly stated in the summary) :
- companies realize that they can make even more money
- patent holder stay hidden for a while, they push a new standard knowing that it's patent covered
- once the standard becomes pervasive to the point it's not possible to function without it (e.g.: MPEG Audio Layer III, a.k.a MP3), suddenly the patent holder wakes up (in this case: Frauenhoffer Institute).
- the holder tries to sue the shit out of everyone to make even more money.
- rent seeking and giant money grab rots the industry.

(Historically, it's not the first time this has happened. See the holders of the LZW (Lempel-Ziv-Welsh) patent and the Graphics Interchage Format - GIF)

The current situations with MPEG HEVC / H.265 is a giant patent minefield, with several patent pools and/or patent holder each going for their maximal money grab.
To the point that HEVC/H265 isn't getting as widespread support in hardware as one would have expected when looking at its predecessors.

Meanwhile, the industry is fed up with this shit :
They've decided to do their own video standard with blackjack and hookers.
Actually forget about... blackjack.

They've decided to create a video standard with the explicit target for making it patent-free so it can be implemented for free by anyone who wants to use it online.

It's not the first time such a switch of standards on the grounds of being fed up has happened.
(The older being the switch from GIF to PNG by replacing the patented LZW compression with the free deflate).

And that is what frightens the MPEG guys.

----

As a note, a new standard won't necessarily devolve into the xkcd joke.

Each time, such switch have managed to actually succeed if :
- there is an actual push for the standard by the industry (e.g.: browser have started supporting PNG)
- the new standard is at least as good or even better that the old one (e.g.: PNG supports much more color schemes than the up to 256-palette of GIF. It also supports alpha channels, and the deflate compression is better).

The AV-1 is frightening the MPEG guys even more on these grounds.
- it's a coordinated effort by most of the industry big players including browser vendor, hardware vendor, server solution makers, etc. (i.e.: most of the company who make money by *using* video, as opposed to *selling the patents on the video* are in and pouring resources into it)
- it's a new gen codec, so of course it compresses somewhat better than the older standards.

And among the names of the companies involved, you see names who have been successful in deploying standards in the past :
- Google who have pushed their VPx series of codec.
- Xiph who have had relative success in the past:
- already with Vorbis against MP3 and WMA. It didn't get widely known by the general users, but it got a niche success : nearly all no-name asian media players supports it, it's used by several older audio streaming web companies - like Spotify and the completely free implementation have seen success in being used in various applications and engines - like game music)
- they did it again being among the company that contributed to OPUS, the free codec that currently beat everything else (including AAC) and is currently used by nearly any app/software on the

Past example

[DrYak]

Well... there's been many failed attempts at trying to replace closed source codecs with open source ones

And the big web switch from GIF to PNG is a good exemple of a successful one.
Usually it requires 2 things :
- a big industry push
- as good or better as the replacement

like Theora, the VPx codecs, Direc,

Dirac is a very small scale stuff. Mainly pushed by the BBC and hence only used in their echo-system.

Regarding the VPx family :

- VP6 / Theora : happened late at a point when it wasn't that competitive against MPEG standard of the day and was only pushed by a handful of companies (mainly Xiph Mozilla, and considered by Google for Youtube) while the rest of the industry pushed for MPEG which *did* had patent costs, but not crazy ones yet.
- VP9 : pushed by Google, a company a tiny bit more relevant, but still not industry-wide, because people were betting on the upcoming MPEG-HEVC/H265 because nobody knew yet the massive patent minefield it was going to be.
- VP10 : see below.

Daala and so on.

Daala *is* AV-1.

AV-1 is done by combining the efforts of Xiph's Daala, Cisco's Thor, and Google's VP10.

Some parts didn't make it (Daala's Perceptual Vector Quantization - PVQ - currently isn't enabled by default in AV-1 and is considered too different/weird), other parts of Daala are actually in AV-1 (the entropy coders experiments of Daala are now part of the AV-1 standard).

Now: AV-1 is showing interesting results.
And nearly anyone who is relevant in the internet-video business is on it. (you find content streamer like Netflix and Google (Youtube), browser makers like Google (Chrome) and Mozilla (Firefox), etc. - the whole ecosystem is in there).

By the GIF/PNG exemple and unlike the less popular video formats mentioned above, all the chance are on AV-1's side.

Vorbis never caught on to replace MP3

It still had some limited success :
- nearly any no-name asian media-player supports it. (Despite a campaign by Microsoft's WMA certification to explicitly ban it)
- accepted as part of the IETF standards
- supported by all major browsers
- thus a few on-line web service have built around it (Spotify is one notorious example, and it's far from a tiny player).
- Youtube can optionally use it.
- Thanks to widely available free code, it has also found it's way in numerous software applications (lots of game engines used it)

So it's not as widely known by the public as MP3 or AAC, but it still beat WMA, and it still managed to get used quite a bit.

or AAC either.

Vorbis/MP3/WMA all predate AAC.

AAC appeared much later.
It also ended up feature many of the same problem as the MPEG Video codecs mentioned in the article : mainly heavy patenting.

So although it managed to gain a foothold in the TV/Radio (DAB+ and HD DVB-x) and Music selling (iTunes) business, it got completely blown out on internet.
OPUS has basically come and destroyed it. It has much better audio quality, and is completely free of patent licensing.
As such OPUS is what is used by nearly any modern app : Skype, WhatsApp, FB Messenger,... chances are if it's on your smartphone and allows you to talk with audio, it probably runs on OPUS.
There are even experiments in using it on radio (OPUS is an unofficial codec used in the "DRM" long range AM-like radio).

It's one straw in particular that broke the camel's back and it's that those licensing HEVC saw the rise of video streaming services and got a bit too greedy.

Yup, totally agree, it's the patent-trolling that killed HEVC (and AAC for that matters).

Basically, if you have Android and iPhone (= Google and Apple) recording AV1 video, YouTube and iTunes (= Google and Apple) delivering AV1 video to hardware decoding in smartphones (= Google and Apple) you hav