It’s an apparent case of greed triumphing over common sense. The folks working out the licensing fees for MPEG-4 have decided to charge a per-minute, per-user fee for use of the technology and to set the fee at a level that should ensure MPEG-4 will become a forgotten footnote in the history of technology.
MPEG-4 is the latest in the series of technologies from the Moving Picture Experts Group (MPEG) dealing with support for multimedia in a digital world. MPEG-4, according to the licensing group, “enables integration of the production, distribution and content access features of digital television, interactive graphics applications and interactive multimedia across [IP], wireless, low bit rate, broadcast, satellite, cable and mobile environments.”
Like many standards in these days of a surfeit of patents, there is a complex tangle of intellectual property rights underlying MPEG-4. At least 18 companies claim that their intellectual property rights are impinged by the standard. In a good move, the MPEG folks have come up with a single license, which will cover all the intellectual property rights needed by implementers and users of MPEG-4.
I don’t want to argue that MPEG-4 technology should be available for free. It would have been nice if the MPEG folks had been able to use technology that had no intellectual property rights claimants on it, but that is getting hard these days.
Charging a fee of US$0.25 for licensing for each personal-use MPEG-4 encoder or decoder seems reasonable. Personal use is defined as being where no content owner or service provider is paid in any way for the material. It does mean that there will be no freeware MPEG-4 systems for personal use, and that will be a shame but not a killer in and of itself. And, US$0.02 per hour of pre-recorded material, like a DVD, also seems unlikely to be the determining factor in deciding if MPEG-4 will be used for pre-recorded material.
But a fee of US$0.02 per hour per viewer for streaming content over the Internet seems designed to ensure technological irrelevance. As an example, this fee structure would mean that if Victoria’s Secret Stores Inc. had used MPEG-4 for its last 44-minute Webcast (seen by 2 million people) Victoria’s Secret would have had to pay about US$30,000 – not a bad deal. But what about CNN.com’s coverage of Sept. 11? Many millions of people watched that advertising-supported service for hours at a time. Would CNN have offered it if the news organization had to multiply the losses it already has on the service?
The MPEG-4 intellectual property rights holders would do just fine if they charged a reasonable, but significant, flat fee for commercial encoders instead of the streaming usage fee. But if they insist on a user-based fee for streaming, I expect an alternative with a better fee structure will be developed and only historians will remember MPEG-4.
Bradner is a consultant with Harvard University’s University Information Systems. He can be reached at email@example.com.