Feeds

Microsoft mugged over VC-1 codec patent terms

Self-inflicted victory

Providing a secure and efficient Helpdesk

Back in August when the draft license terms were issued, it was made clear that Microsoft was the only company that would have to pay “back payments” prior to 2006 (Microsoft has been bundling the same or similar technology in its PC operating systems for around 10 years).

The patent position for H.264 looks remarkable similar to VC-1, which isn’t too surprising since everyone we’ve spoken to says that the technologies are virtually identical anyway. Common patent holders for both the VC-1 patent pool and the H.264 pool include France Télécom société anonyme, Fujitsu, Philips, Matsushita, Mitsubishi, Samsung, Sharp, Sony, Toshiba, JVC and of course Microsoft.

Terms for building a device with the technology in splits into two formats, if it’s for a specific function in a CE device it costs nothing for the first 100,000 licenses; 20 cents each for up to 5 million licenses; 10 cents for all licenses above 5 million and there is a royalty cap of $5m a year. But if the royalty is for a PC operating system, which can of course be used for multiple applications, the cap is $8m.

If Microsoft is forced to pay back 10 years of back payment for royalties (as was suggested in the August 2006 draft license) then it would have an up front payment of something like $80m, divvied up between all 16 companies, and a continual $8m a year – for something that it was claiming it invented itself.

Content companies also pay license fees, and these also split into three, paid for title by title, where a customer pays for the service or product, and where customer either get encoded content for free, such as broadcast Television or as part of an overall subscription.

For this short videos under 12 minutes bear no royalty and thereafter pay the lower of 2% of the price paid for the video or $0.02 per title. This is for replicators of physical media, and service providers such as cable, satellite, video DSL, internet and mobile, for VOD, Pay per view and electronic downloads. This caps at $4.25 million a year until 2012, and rising after that.

Where remuneration is for other sources, such as advertising the licensee pays either a one-time payment of $2,500 per VC-1 encoder or an annual fee per of $2,500 per broadcast market where a market is at least 100,000 people or $5,000 per year per for a broadcast market up to 500,000 people and $10,000 a year for each broadcast market above 1,000,000 or more television households.

The two patents that were included for Microsoft as being essential for inclusion in the patent pool related to predictive image compression using a single variable length code for both the luminance and chrominance blocks and another for the efficient macroblock header coding.

Coincidentally we’re sure, a few days after the terms were finalized a number of US Broadcasters including NHK, TBS, NTV, TV Asahi, Fuji TV and TV all decided that they would adopt the H.264 encoding for their future programming.

This came after there were hiccups over the H.264 license which has also been in discussion for many months, and this was not thought to have related to the VC-1 patent pooling license finally being settled, although the terms of the license are virtually identical, based on a payment on a $2,500 one time fee for each encoder used.

So after all this time the two technologies, considered by many so similar as to be identical, now cost virtually the same to license as one another, much to the chagrin of Microsoft’s and contradicting its earlier statements. The intervening period of uncertainty has pretty much left VC-1 encoding only scarcely used, except a little on the web, with the exception of its use as an option in both High Definition DVD standards HD DVD and Blu-ray. But this only came about as a snub to the MPEG4/H.264 license, which at the time was thought to be too expensive.

Copyright © 2007, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

Choosing a cloud hosting partner with confidence

More from The Register

next story
Same old iPad? NO. The new 'soft SIMs' are BIG NEWS
AppleSIM 'ware to allow quick switch of carriers
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Brits: Google, can you scrape 60k pages from web, pleeease
Hey, c'mon Choc Factory, it's our 'right to be forgotten'
Of COURSE Stephen Elop's to blame for Nokia woes, says author
'Google did have some unique propositions for Nokia'
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.