Unraveling HEVC Royalties: Big Payouts for Big Companies

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Before companies start producing and distributing HEVC video, they'd better know they royalty structure. At the recent Streaming Forum conference in London, StreamingMedia.com contributor Jan Ozer explained it for the audience.

"What do we know about HEVC royalties? The MPEG LA patent group is the same patent administration group that put together the patent groups for MPEG-2, for H.264," Ozer explained. "In the March timeframe they said, 'We don't know what the final royalty policy is, but this is what we're thinking,' and they talked about a 20 cent per encoder/decoder royalty. It kicks in after you've shipped 100,000 units, so there's the de minimis exception. The maximum first year royalty will be $25 million."

So smaller companies don't need to worry, but for bigger companies -- such as Adobe -- the payouts could be huge.

"Now, in comparison the maximum royalty for H.264 this year is $6.5 million. So, if you're Adobe, for example, you're paying $6.5 million a year to MPEG LA to include H.264 in the Adobe Flash player and all the encoding tools and all the other decode tools that support it. If you decide to include HEVC, it's another $25 million, assuming you hit the maximum -- and they would if they included it in Flash Payer because they would ship 125 million units," Ozer said.

For more on working with HEVC, watch the video below.

Producing and Distributing HEVC

This session explores the current status of HEVC, identifying options for encoding live and on-demand HEVC and discussing player options in the streaming and OTT markets. Topics include the comparative quality and usability of HEVC encoders, how HEVC quality compares to H.264 and VP9 (if encoders are available) and known trials and deployments of HEVC.

Presenter Jan Ozer, Principal, Doceo Publishing

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