New licensing scheme threatens the future of HEVC decoding for 4K content

by on July 28, 2015

Stephan Jukic – July 28, 2015

One of the problems that HEVC has always dealt with involves royalties paid by those who license it for their own platforms and services.

This has been the case for years as the previous HD-oriented version of HEVC, H.264, was licensed out to numerous companies who streamed online video for all sorts of reasons throughout the web. However, the consortium representing the diverse companies which hold ownership of patents relevant to the makeup of H.264, had managed to create a comfortable middle ground on licensing fees by charging royalties only to services that used the service in a way that led to profit. Furthermore, this same group, called MPEG LA, also had placed a cap on the maximum royalties payable by any one particular holder of an H.264 license.

Thus, MPEG LA, which represented HEVC-relevant patent holders such as Apple, Samsung, Fujitsu and others was able to ensure that the overall usage and popularity of the video compression codec spread quite far and wide in the streaming market. Few companies held out on using the standard and one of the few that did, Firefox, eventually relented as it saw that H.264 was becoming ubiquitous and would have to be an integral part of their at the time still very popular browser.

Thus the H.264 licensing system was highly effective for the most part. Partly because it was relatively attractive in cost and design and partly because H.264 was (and still remains) such a useful streaming video compression codec.

When HEVC’s newer, 4K ultra HD oriented version came out in late 2013 (called H.265) MPEG LA promised the same licensing system as the one it had implemented with H.264 and as H.265 slowly grew in popularity, this looked like it could work out smoothly. The scheme for the second HEVC made sure that encoders and decoders continued to incur fees while streaming, broadcasting and Blu-ray use of HEVC would remain cost-free. Basically, the situation for H.265 would have meant that hardware makers and software sellers pay licensing fees while streaming services and content producers do not.

Now however, just as HEVC H.265 gains traction with a number of newer 4K TVs and even smartphones, as well as many streaming services and particularly those that distribute 4K content, a new player has arrived on the market to disrupt the status quo, possibly in a negative way.

Called HEVC Advance, the new group is also seeking to create a licensing scheme of its own for all who use HEVC and depend on it even but unlike MPEG LA, the new group wants to make sure that everyone who uses the codec in any commercial way pays a royalty and they furthermore want to eliminate caps on maximum licensing fees.

The problem here is that MPEG LA has no authority over HEVC and it doesn’t own any of the patents which relate to it. These are strictly the property of the companies which developed the codec and they can switch from one license contractor to another as they please, meaning that they don’t need to participate in the original MPEG scheme unless they want to.

Thus, those patent holders who prefer the potential fees from HEVC Advance’s terms can move over to the second company. And it looks like some are definitely doing this.

HEVC Advance claims that it has already signed on General Electric, Technicolor, Philips and even Dolby, one of the key HEVC developers.

Because H.265 offers a lot of advantages over H.264 in terms of compression efficiency and because it’s crucial for 4K resolution in a way that the older codec can’t match, there is a risk that this new development in the licensing system behind the codec could stifle its wider adoption. 4K is definitely becoming the next big thing in both streaming and broadcast media, as well as display devices of all kinds and HEVC is an attractive option for ensuring smooth content delivery in ultra HD. This leaves a wide range of production, hardware and content delivery companies in a bit of a bind if HEVC becomes too expensive.

HEVC is already entrenched into many hardware systems with 4K displays and media

HEVC is already entrenched into many hardware systems with 4K displays and media

However, on the other hand, HEVC Advance and those who sign up for it might also be digging their own grave in the quest for more profit. While HEVC is desirable for high bandwidth video streams, it’s by no means the only system on the block. Google and Mozilla are both working on their own competing codecs and Google’s, called VP9, is particularly attractive in that it’s almost as good as HEVC and also has the full support of one of the internet’s digital content and search giants.

Furthermore, VP9 is fully open source and much cheaper to implement. What still causes an uphill battle for these competing systems, despite the possibility of HEVC becoming more expensive to use than ever before, is the simple fact that the proprietary codec is already widely being implemented in various hardware systems that are in the hands of consumers.

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