MPEG LA Responds to Licensing Criticism

In a conversation with streamingmedia.com, Larry Horn, VP of Licensing with MPEG LA, answers a number of questions that arose in response to last week's MPEG-4 Visual licensing terms announcement.

"The feedback is great," Horn said. "This is new stuff. Everybody's got a different story of how they're going to use the technology."

First, Horn explained the non-finality of the announced terms. "This wasn't put out lightly. We were trying to give a clear signal as to what the terms mean and what they are going to be. But nothing is cast in absolute stone, we're working on the final license."

The use fee of two-cents per hour of content served/streamed has generated the most heated debate. Horn explained that the use fee is a new concept conceived to address a new kind of business situation, "There's no intention on the licensors' part that streaming would be restricted. It’s a concept that the patent holders think is appropriate where the data is transferred quickly and in a dynamic way. At the same time, feedback is welcome."

"The key thing to understand," Horn added, "is that the licensors want the use fee to follow remuneration." This point resurfaced several times when explaining what kinds of streaming would and wouldn't be subject to the use fee. Person-to-person teleconferencing or video messaging would not be subject to the use fee. Neither would an enterprise intranet video conference or broadcast. Public broadcasts on corporate Internet web sites would not be subject to the use fee in scenarios where they were simply providing corporation information without advertising or other commercial content use. In all these scenarios the encoder license fees would apply.

When asked about more complex scenarios such as education streams or free streams with in-stream or near-stream (HTML surrounding a stream) advertising, Horn repeated the axiom, "If there's remuneration, then the patent holders should be paid." For education streams, if part of a course costs money to take, then the fee would apply. For free streams, if somebody were paid for in-stream ads, then the use fee would also apply. If the remuneration were less clear, but extant, such as HTML ads surrounding a stream, then most likely the fee would apply.

However, Horn noted that anticipating varied scenarios will help make for a clear and interpretable final license. To that end, community feedback is welcome, and could very possibly make a difference. One known way for individuals to have their thoughts heard is to join the new M4IF discussion list created in response to these terms, where Horn himself and a number of other industry figures are exchanging views. Members of industry consortia, such as the ISMA, are speaking directly with the MPEG LA.

Perhaps the toughest question was how the use fee would apply to broadcasting in a one-to-many scenario -- without regard to delivery means (internet, cable, other). Horn explained that "The one-to-many [scenario] is under study. We haven't come to absolute conclusions on that."

A question Horn could answer directly and definitively was packaging scenarios (DVDs, CDs, etc.), where the use fee would simply apply to the length of the content packaged. A single DVD getting many plays would only have the use fee applied once, at the point of replication. Horn noted that media replicators are also the point of payment for MPEG-2 licensing.

The bottom line, according to Horn, is that the 18 patent holders have agreed to these terms for MPEG-4 Visual Simple and Core profiles and there is still an opportunity for streaming media industry members, and others, to have their concerns heard, possibly incorporated into the final license. "To have an industry you need buyers and sellers," Horn said. "We brought the sellers together, and they're open to hearing what the buyers have to say."