28 / April / 2021

Free codec, liberated streaming

There are some things viewers doesn’t notice but they are crucial for streaming industry. All stages in online video production and distribution involve codecs. Recently, the codec situation has evolved due to an interesting case.

Free codec, liberated streaming

HEVC mistake

Among video codecs H.264 gained momentum, but it was followed by new ones: changing and developing video formats (4K, for example).

Back in the day, companies started adopting H.264 and HEVC before the business terms were known because the technology success seemed undiscussable and earlier standards had rational royalty policies.

All that changed with HEVC, which saw three patent pools launched within 1–4 years after the standard finalized and after many companies had already committed to the technology, assuming that it would be reasonably priced. It wasn't.

MPEG-LA and HEVC Advance patent pools expected companies like Apple and Microsoft to pay for it. But they got too greedy by eliminating price caps: known annual royalty caps skyrocketed from around $10 million per year for H.264 to more than $60 million for the new codec, and that's without knowing the cap from one of the pools that won't publicly disclose it.

So, Microsoft have had to pay hundreds of millions of dollars for H.265, where H.264 caps out in the low millions. HEVC Advance has changed the licensing policy, but it may be too late, as google Microsoft, Amazon, Netflix, Cisco, Mozilla and others created a non-profitindustry consortium that develops open, royalty-free technology for multimedia delivery (under the name Alliance for Open Media). Its first project was AV1, a new video codec and format, as a successor to Google’s VP9 and an alternative to HEVC.

The moral of the story is easy: the streaming industry is about openness of the technology. By sharing them companies ensure that online video can never be held hostage again.