& cplSiteName &

HEVC Advance Backpedals on Licensing Fees

Mari Silbey
12/21/2015
50%
50%

After much hue and cry, the organization HEVC Advance, which plans to license patents related to the High Efficiency Video Coding (HEVC) compression standard, has taken a step back on fees it proposed last July.

Responding to significant industry criticism, HEVC Advance has not only reduced royalty rates, but also capped fees for both hardware manufacturers and content distributors. HEVC is expected to play a critical role in the rollout of Ultra HD video, but industry players have worried that high licensing fees could slow adoption of HEVC and thus deployments of UHD TV.

The new terms proposed by HEVC Advance decrease licensing fees in major global markets like the US, Europe and Japan from $1.50 per unit for TV sets to $1.20 per unit; from $1.10 per unit for connected devices like set-tops and computers to $0.80 per unit; and from $0.80 per unit for mobile devices to $0.40 per unit. Fees top out at $30 million for mobile devices, and $20 million for TVs and connected devices. A combined cap of $40 million applies across all three categories.

"The marketplace was telling us strong and loud that caps were necessary," said Pete Moller, CEO of HEVC Advance, in an interview.

In addition to fees imposed on hardware (and related software apps), HEVC Advance is also targeting content providers. Originally, the organization planned to collect 0.5% of attributable revenues from content owners, but Moller acknowledged there were complaints that attributable revenue would be too difficult to calculate, and that proprietary information could be revealed in the process.

Instead, HEVC Advance is now proposing a fee schedule that would collect $0.25 per subscriber to any subscription cable, satellite TV or over-the-top video service. It would collect the same per title sold or rented, and the same per unit for any physical media like a Blu-Ray disc. Fees are capped at $5 million.

In comparison, another HEVC licensing body MPEG LA charges $0.20 per unit for consumer electronic devices after the first 100,000 sold, with a cap of $25 million. There are no fees for content owners.


Want to know more about pay-TV market trends? Check out our dedicated video services content channel here on Light Reading.


Frost & Sullivan analyst Dan Rayburn called the initial pricing terms proposed by HEVC Advance "unreasonable and greedy." In particular, he suggested that content owners would be loath to doling out fees as a percentage of revenue. (See HEVC Advance Could Hurt 4K TV Advancement.)

Several industry leaders also responded to the original fees with an announcement that they have created their own Alliance for Open Media with plans to develop an advanced, royalty-free video codec. Members of the Alliance include Amazon.com Inc. (Nasdaq: AMZN), Microsoft Corp. (Nasdaq: MSFT) and Google (Nasdaq: GOOG), among others. (See New Alliance Aims at Royalty-Free Video Codec.)

Companies participating in the HEVC Advance patent pool include General Electric Co. (NYSE: GE), Technicolor (Euronext Paris: TCH; NYSE: TCH), Dolby Laboratories Inc. (NYSE: DLB), Royal Philips Electronics N.V. (NYSE: PHG; Amsterdam: PHI) and Mitsubishi Electric Corp. (Tokyo: 6503). HEVC Advance has also published a list of patents included in the pool today. While there are nearly 500 at launch, the organization expects that number to double or even triple within six months.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
12/21/2015 | 11:41:42 AM
Politics
Interesting politics. Arguably, HEVC won't go anywhere if content providers don't sign on, so charging content providers might be foolish. On the other hand, content providers might see an opportunity here and be willing to pay. And Netflix seems to be missing from the rival standards group. 
From The Founder
The time has come for a telecom app store to save the industry.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Documentaries
BCE 2017: Intel's Take on Network Transformation

5|24|17   |     |   (0) comments


In this BCE 2017 keynote, Lynn Comp discusses Intel's vision for areas such as analytics, automation and service assurance. For more videos and BCE coverage, see http://www.lightreading.com/bce.asp.
LRTV Documentaries
Order From Chaos: The Steve Saunders BCE Keynote

5|24|17   |   17:27   |   (0) comments


Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability testing.
Think of this as the video sequel to the recent columns he's written about NFV and the prospect of a telecom app store. (See

LRTV Documentaries
Service Provider Panel: Partnering in the Digital Era

5|22|17   |     |   (0) comments


Coopetition has always been part of telecom, but the ecosphere now includes data centers, vendors, apps developers, cloud service providers and Internet content providers. This BCE 2017 panel explores the new attitudes among network operators as to the value and variety of ...
LRTV Interviews
Site Demo: AT&T's IoT Flow Platform

5|19|17   |   04:25   |   (0) comments


At AT&T's R&D center in Tel Aviv, Israel, project leader Eyal Segev talks about the operator's Flow platform and how it helps to prototype IoT applications.
LRTV Documentaries
Agent of Change: A Q&A With AT&T's John Donovan

5|18|17   |     |   (0) comments


Carol Wilson talks with the man leading AT&T's transformation efforts about the challenge of change.
LRTV Documentaries
BCE Service Provider Panel: The New Business Realities

5|18|17   |     |   (0) comments


For virtualization to happen, the telecom industry first has to grapple with key functional aspects of SDN and NFV that need to be universal, such as onboarding of virtualized network functions and federation of software-defined networks.
LRTV Interviews
BCE Service Provider Keynote: CenturyLink

5|16|17   |   22:32   |   (0) comments


Aamir Hussain leads the Product Development and Technology organization at CenturyLink, which includes the company's information technology function. He is an experienced senior technology executive with more than 25 years of proven success in the implementation of global technology operations, operationalization of complex technology, infrastructures and business ...
LRTV Interviews
CenturyLink CTO on Transformation

5|16|17   |   7:43   |   (0) comments


The 80-year-old telco has already gone through several transformations, including every time it made an acquisition, but its purchase of Level 3 coupled with changes in technology and customer expectations necessitates its biggest transformation yet.
LRTV Documentaries
Light Reading Hall of Fame 2017

5|15|17   |   5:05   |   (1) comment


Find out who made it into Light Reading's Hall of Fame this year.
LRTV Interviews
Site Visit: AT&T's Tel Aviv R&D Center

5|15|17   |   09:58   |   (1) comment


Nir Shalom, general manager and VP of application development at AT&T Israel, talks about the key service developments undertaken at the AT&T R&D facility in Tel Aviv and how the team there has adopted new ways of working.
Telecom Innovators Video Showcase
Act on Your Intelligence With Amdocs aia!

5|15|17   |     |   (0) comments


Amdocs CMO Gary Miles explains how communications service providers can seize the AI opportunity with Amdocs real-time digital intelligence platform.
LRTV Interviews
Logtel CEO: Making Sense of IoT

5|15|17   |   09:48   |   (0) comments


Jacques Bensimon, founder and CEO of Tel Aviv-based training and consultancy Logtel, talks about the need to make IoT more than just a buzzword.
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
AT&T's Donovan: Women Adapt Faster Than Men
Sarah Thomas, Director, Women in Comms, 5/18/2017
Cities Clamor for More Clout at FCC
Mari Silbey, Senior Editor, Cable/Video, 5/23/2017
What's Blocking 4K TV Today
Alan Breznick, Cable/Video Practice Leader, Light Reading, 5/22/2017
Sonus & Genband Finally Combine to Form $745M Company
Dan Jones, Mobile Editor, 5/23/2017
Fright Wigs & Cocktails: BCE 2017 in Pics
Mitch Wagner, Editor, Enterprise Cloud, 5/19/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Animals with Phones
What Brogrammers Look Like to the Rest of Us Click Here
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.