MPEG-4 AAC Licensing Announcement Gets Support

In a widely hailed move, Dolby Laboratories announced this week licensing terms for the MPEG-4 Advanced Audio Coding (AAC) model. Both the Internet Streaming Media Alliance (ISMA) and the MPEG-4 Industry Forum (M4IF) lauded the announcement and threw their support behind the licensing program.

This week’s licensing announcement failed to draw the type of controversy recently witnessed for MPEG-4 video licensing technology proposed last month by the MPEG LA, a consortium of 18 patent holders. In that proposal, licensees would be required to pay 25 cents for MPEG-4 video encoding and decoding, with fees ranging up to $1 million a year. Apple rejected the MPEG LA licensing plan, delaying release of QuickTime products associated with MPEG-4.

"ISMA members have been very concerned that the proposed use fees for MPEG-4 video patent licensing will inhibit the uptake of MPEG-4 among its most important constituents -- the companies that create and/or distribute multimedia content," said Tom Jacobs, president of the ISMA, whose members include Apple and IBM, among others.

"The MPEG-4 AAC co-licensors listened to licensees and understand the complexities of the marketplace. [This proposal] encourages the use of this important new technology by making it attractive to the content industry, which will in turn promote the sale of products and the success of the MPEG-4 standard," said Jacobs.

Under the new MPEG-4 AAC licensing terms, licensees will pay up to $0.50 per channel for a consumer decoder or encoder product; for professional uses up to $2 per channel for decoder, and $20 per channel for encoder; and fees for PC-based software would be capped at $250,000 annually for encoders and $20,000 for decoders. There are no royalties or usage fees for content distribution in AAC format, said Dolby Laboratories.

According to Dolby, the MPEG-4 patent license agreement will be available in April. "The significance of our new licensing program is that is has been developed in response to high market demand in a rapidly moving marketplace," said Ramzi Haidamus, Dolby’s director of business development.

Rob Koenen, president of M4IF, sees the licensing announcement as a major step toward widespread adoption of MPEG-4 AAC, "It is very good to see that the entry barrier for Internet usage is kept very low, as we expect this environment to set the next trend in audio encoding," said Koenen.

Monument Video Signs Up With DivX

Also this week, DivXNetworks announced that film distributor Monument Video has licensed the MPEG-4 compression technology of the DivX Open Video System for video-on-demand over the Internet.

As part of the deal, Monument Video will initially sell six films including such lesser-known flicks such as "Eye of the Dragon," "Cross of Fire," and "Once There Was a Ballpark." Films are available for $4.99 for a five-day rental.