Great news for fans and providers of 4K UHD content: Licensing requirements for HEVC become cheaper

by on December 21, 2015

Stephan Jukic – December 21, 2015

HEVC Advance, the coalition behind much of the technology that goes into the HEVC codec, has announced some much friendlier licensing terms for H.265 video compression. This means great news not only for Amazon and Netflix, which both use the codec for their 4K video, but also for other platforms which want to stick with HEVC.

In essence, the hurdles around wider adoption of HEVC have just become smaller now that the main patent holders’ group for the compression codec has eased its licensing demands by recently announcing much friendlier terms.

The HEVC Advance group represents a number of the key developers behind HEVC and has been threatening hefty fees for the use of the H.265 compression codec specifically used in transmitting and streaming compressed 4K ultra HD video over the web and other mediums.

The format known as H.265 is widely used by Amazon Instant Video, Netflix and others for their 4K content and offers up to 50% more efficiency than the dominant H.264 compression standard which is its predecessor and which is used mainly for Full HD video compression. In simple terms, H.265 is crucial for compressing the much larger file sizes of 4K video while the older H.264 doesn’t quite offer enough compression of this video for it to fit through existing high speed broadband channels.

In previous months, HEVC Advance was demanding that users of the H.265 codec offer up 0.5% of all revenue from streaming service they offer in exchange for using HEVC. Now however, the group has become open to “substantially reduced pricing” along with a royalty cap on devices and content distributors which will limit the maximum amount of royalties the HEVC consortium can demand from those who use H.265 for their content delivery systems. Furthermore, HEVC Advance won’t seek royalties from streaming services which are free to end-users and offering a public or non-profit service.

In other words, HEVC Advance is now offering more or less the same terms that had been in place with the older H.264 version of HEVC and which made it so popular among many different users. These new terms from HEVC Advance are also now more competitively similar to those offered by MPEG LA, which is yet another group with extensive control of patents around H.264 and H.265 HEVC formats.

H.265 at work in 4K video compression, next to its older version H.264

H.265 at work in 4K video compression, next to its older version H.264

As for the core question of why HEVC Advance is now being so much friendlier to content providers in its licensing terms. We don’t have a concrete, clear answer from the consortium but it may have a lot to do with the simple fact that their former and very expensive licensing terms were first reducing use of H.265 and also provoking accelerated competitor development of alternative video compression technologies which don’t depend on HEVC.

In other words, HEVC Advance possibly saw that its demands were backfiring on their own desire for more widespread, profitable use of HEVC’s newest version.

It’s definitely worth noting that those working on developing a competing video compression standard which can forego HEVC were certainly no minor industry players. The core group behind this alternative effort calls itself the “Alliance for Open Media” and includes such giants of the content industry as Netflix, Amazon, Google and even Microsoft, along with all of their R&D resources and deep pockets.

This second body of industry players, fed up with the demands of HEVC Advance, were well into development of a much more open video compression standard which could have potentially left those in control of HEVC with nothing at all.

Thus, we now have the present, more relaxed licensing architecture and an additional push by HEVC Advance to make H.265 still more enticing by also offering a 12 month incentive program which includes a “substantial discount” on prior device and content distribution and further discounts for adopters of H.265 during the next few years. Because H.265 needs to be adopted at a hardware level, getting lots of device makers on board as early as possible is crucial to maintaining a strong presence in the market for compression of the growing body of 4K ultra HD video entertainment sources. A victory for the adoption of HEVC’s latest version now could make H.265 the industry standard for many years to come.

Whatever the case may be, this change in the video compression licensing landscape means a victory of consumers who own 4K ultra HD TVs and set-top boxes. Their final costs of accessing 4K content will be effectively reduced.

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