Will Amazon and Dolby's Latest Acquisitions Accelerate VVC Deployment?

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Recent moves by Amazon and Dolby may hint at a growing interest in VVC (Versatile Video Coding).

Amazon’s Acquisition of MX Player

On Wednesday, June 5, Amazon agreed to acquire key assets of Indian video streaming service MX Player from Times Internet, reportedly in a bid to increase sales and brand awareness in India. As reported by TechCrunch, “the deal values MX Player at less than $100 million, far short of the $500 million valuation at which the streamer raised its last capital.”

MX Player was an early adopter of VVC for software playback. Though Amazon's primary motivation for the deal was as stated, if VVC plays well in software on mobile devices in India while cutting bandwidth costs significantly, perhaps it can do this in other regions, particularly those associated with more powerful mobile devices than India. 

Dolby’s Acquisition of GE Licensing

On Thursday, June 6, Dolby agreed to acquire GE Licensing in a $429 million all-cash transaction. According to the Dolby press release, “GE Licensing’s portfolio of video codec technology, such as HEVC and VVC, complements, strengthens, and expands the scale of Dolby’s intellectual property portfolio. Dolby is committed to continuing to facilitate the adoption of next-generation standardised technologies—enabling industry efficiency, continuity, and growth.”

Here again, VVC may be the secondary motivation for the acquisition. According to IP Watchdog, GE owns 1% of HEVC-related patents, which should already be generating significant revenue. In comparison, VVC licensing is relatively nascent, so significant licensing revenue is a few years off (and far more speculative).

In addition, GE’s VVC portfolio may be smaller than its HEVC-related patents. In this 2021 VVC patent breakdown by IAM, Dolby already owns 1.09% of outstanding VVC-related patents, while GE didn't make the list, which identifies owners down to 0.18%.

Still, the press release's focus on next-generation technologies seems to focus more on VVC than HEVC. While it’s tough to say how much VVC played into Dolby’s decision to acquire GE’s portfolio, if I had to guess, I would say it was a very relevant factor. 

What's It Mean?

From my perspective, VVC has been a solution in search of a problem. It hasn’t yet opened any new markets, like H.264 did for HD and HEVC did for 4K. With 8K TVs shunned if not banned in Europe, and of questionable benefit worldwide, there are no obvious markets to conquer. 

That said, VVC has been adopted for software playback in China, albeit by VVC IP owners like ByteDance, which limits the endorsement value to some degree. Still, if VVC software playback on mobile works in China and India, perhaps that's the killer app that could accelerate VVC deployment around the world. 

It appears that Dolby thinks so, and perhaps Amazon as well.

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