Patent thirst

“HEVC has a long and complicated history.

With H.264, it was easy – one patent pool. Any questions? Contact MPEG LA. How much did it cost? About $2 or so per device, no problem. Did you spend more than (IIRC) $14 million on licensing each year? It’s free past that point. As for open-source software like Firefox, Cisco actually struck a deal to pay all the royalties if you used their OpenH264 decoder (they needed H.264 to be widely supported for WebRTC), so Firefox and other software was able to use the binary of that and have Cisco covering the royalties for them.

With H.265, everything splintered. There are three patent pools: MPEG LA, Access Advance (formerly known as HEVC Advance), and Velos Media. Between them, you have to pay royalties on the hardware, the software, and a royalty per-item created past a certain point. Some had royalty caps, others did not and would rack up royalties indefinitely and unpredictably high. Some patent pools had you licensing patents available in other pools, so you were paying twice for the same patents. And some major patent holders (such as Technicolor) weren’t in any pools, so you needed to approach them manually and hash out a deal on your own which could have as favorable or unfavorable terms as they pleased. Also, Cisco (not surprisingly) said they weren’t paying the royalties for an OpenH265, as it was only a ~30% improvement for a exponential increase in royalties, easily several times or more as much as H264. Bloody hell.

So, it shouldn’t be a surprise that Windows decided, screw it, you’re paying $0.99 if you want HEVC, but we’re not supporting it with every Windows license because that could easily cost hundreds of millions of dollars because of the lack of caps. Apple used their sheer market power to get HEVC on all their devices mainly for HEIC (HEVC for images), which reduces storage space needed for photos and iCloud costs, and once you have it on every iPhone, adding macOS is cheap. Presumably this is because Apple struck a deal with the patent holders individually and didn’t need to accept the ludicrous patent pool terms. Did I mention that Access Advance alone operates their patent pool at an absurd 40% margin for its directors? (Yes, 40% of Access Advance’s pool royalty, which is already the highest of any pool by far, is pure profit for the pool itself rather than going to patent holders. It’s asinine!)

You might wonder why in the world H.265 licensing fell apart so badly. The answer is, well, streaming. H.264 got its first release in 2003, before YouTube or internet video was really a thing. HEVC was released in 2013 and patent holders were eager to extract rent from Netflix (distribution royalties), PC Makers (hardware royalties), Microsoft and Apple (software royalties), content producers (per-title royalties), basically everyone involved had a royalty somewhere because they thought HEVC was going to be the best thing ever for reducing streaming costs and people would pay for it. They didn’t.”

It’s always interesting to read some TL;DR of something immensely complicated that we don’t care about yet, that is central in our digital lives. Video codecs in today’s case.

Patent greed is hilarious and sad though. Guys, leave it!

Note to normal people who don’t know anything about tech: H.264 is good enough, we could stop there. Or probably before.

Leave a Reply