MPEG4 Licensing Fees Clarification

[simX]

I listened to the archived copy of the Your Mac Life show that was broadcast today (www.yourmaclife.com).

They had Larry Horn, the vice president of MPEGLA on the show, who clarified some of the use fees.

It seems that the use fee will only be charged if the licensee (the content provider) is also getting money. That means if Apple charged you a nominal fee in order for you to watch movie trailers on their site, then they would be subject to the use fee. Since Apple doesn't, then the use fee doesn't apply. In this example, though, I would guess that the large-size trailers are a different story, because you have to have QuickTime Pro to watch them and QT Pro costs $30.

I believe that the pay-to-see streams are called "remunerated" streams.

If what Larry Horn said is the case, then the use fee actually doesn't seem half bad. What do you guys think?

Can anybody clarify, anyway? I'm not sure if what I said was right.

 

[dricci]

I think Apple want's to keep fees their problem, not the content creator or user.

Apple would rather pay for EACH copy of QuickTime distributed than to have someone who downloads it pay to make a MPEG4 compressed movie.

So Apple could pay a small amount for each download, and a larger amount for each "Pro" copy registered, so then they are the ones responsible for paying for the technology. Not the users, not the editing companies, not anyone.

If content producers are forced to pay any fee to make (and publish) their content online commercially, then they will look for other alternatives or keep using their current system. They don't care if users have to download an extra 5 MB to see a trailer, or if the quality will be a little worse. They just want to take the cheapest route, and there are a lot of free routes out there.

I heard one movie trailer was recently released in DivX format by a major hollywood studio because it didn't cost them a cent and they had pretty good quality. What's to keep others from following? DivX is a cheap non-standardized hack job (hence all the cross-platform compatability issues), the final MPEG4 that Apple wants to use is a much better STANDARD, but will never see the day of light if there are strict licencing issues that studios won't want to deal with.

Apple has made their stance pretty clear several times. I think what Apple wants to do is pretty fair, and the MPEGLA members would still be getting paid. But MPEGLA is getting greedy and just wants more, more, more $$$ or they'll take their ball and go home.

I think Apple is willing to wait this one out until it's final, but something tells me if they can't do it their way then we won't see MPEG4 (as we've come to now know it) in QuickTime.

 

[simX]

I sent an e-mail to Shawn of Your Mac Life, who forwarded my e-mail to Larry Horn of the MPEGLA. This makes the issue even clearer.

Original e-mail sent by simX
Hello. I hope this is the right e-mail to send this to.

I recently downloaded and listened to Larry Horn talk about the MPEG4 licensing fees.

I wasn't quite sure about the "remunerated" streams thing. Does this mean that the use fee will only be charged if the licensee (the content provider) is also getting money? So if Apple charged you a nominal fee in order for you to watch movie trailers on their site, then would they be subject to the use fee? Since Apple doesn't, then does the use fee not apply?

How about the large-size movie trailers? Since Apple requires you to have QT Pro to play them, and QT Pro costs money, would the use fee apply here?

I thought I'd send in these questions when you have your next show with him (since you mentioned you probably would). I think it would be a good thing to clarify this, because it seemed like Larry Horn just glossed over this point, and that it's one of the more important ones.

If this is true, then it seems to me that maybe the use fee is actually pretty reasonable.

If you CAN provide answers to these questions, I would appreciate a reply.

Thanks!

-- Simone Manganelli

Response received from Larry Horn
Hi, Shawn and Simone. I'll be glad to address these questions. Simone's understanding seems to be basically correct. If there is no charge for the movie trailers and no charge by a service provider for distributing them, then no use fee. The fact that a company may use movie trailers or other MPEG-4 video for self-promotion purposes, i.e., to promote its own products or corporate awareness on its own website, does not change that. If the company is paid for advertising in connection with offering or providing the video or provides a subscription service or a service provider is paid to distribute the video, however, that would make it a reunerated stream and the use fee would apply.

I hope that helps, but let me know if I have confused the issue.

Regards,
Larry Horn

If any of you have any questions, I'd be glad to reply to Larry to get more information on the licensing policy.

 

[kilowatt]

Thank you simx for another fact filled post!

Good to hear some clarification now and then on these issues.

Hopefully apple will reach a nice deal, and we'll all be watching divix movies *with* the sound soon