Group outlines MPEG-4 patent license agreements

By Susan Rush
from CED Broadband Direct, July 17, 2002

MPEG LA has put the finishing touches on the licensing terms for the media delivery standard MPEG-4. Official licenses will be issued in September.

The organization, which is made up of a group of patent holders governing MPEG-4, had been under fire for proposing unmanageable royalty rates. But at a recent meeting in San Francisco, the group hammered out licensing terms that it deems reasonable.

The MPEG-4 Visual Patent Portfolio License sets different requirements for different industries.

In the cable television, direct satellite television and over-the-air broadcast areas, manufacturers will pay 25 cents for the right to manufacture and sell each decoder and encoder. Content providers will pay a royalty of $1.25 for the paid-up right to use the decoder and use encoded MPEG-4 visual information.

In the Internet area, owners of Web site content can license the latest video and audio compression format for 25 cents per subscriber or 2 cents per hour, subject to a $1 million annual cap. MPEG LA also instituted a minimum threshold so that content owners with fewer than 50,000 subscribers aren't subject to royalties.

MPEG-4 can stream at lower bit rates than legacy MPEG-2, whose typical range for broadcast quality video is 2 megabits to 3 megabits per second, and up to 4 Mbps to 6 Mbps for DVD-quality video. In comparison, MPEG-4 streams at between 750 kilobits per second and 1.5 Mbps, depending on the content's quality.

MPEG LA believes its one-stop licensing approach for MPEG-4 visual and systems standards will encourage the wide use of the technologies, according to MPEG LA CEO Baryn Futa.