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The State of Codecs 2017

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In a later presentation available on YouTube, Netflix changed those statements, stating that by making several changes to its VP9 encoding parameters, these “tunings can reduce or even reverse [the] gap between VP9 and HEVC.” Of course, since HEVC is primarily used for UHD videos played on Smart TVs, while VP9 is targeted for browser-based playback, the 20 percent quality difference was largely irrelevant. Still, given Netflix’s credibility in the streaming space, the company’s conclusions carry a lot of weight, making VP9’s evening the score a noteworthy event.

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Upon further review, VP9 delivers the same or better quality than HEVC.

September 2016: Eutelsat Communications Invests in V-Nova

Eutelsat Communications is a leading satellite operator in Europe, the Middle East, and Africa. In June, the company successfully used V-Nova’s Perseus technology to power the contribution of Live UEFA Euro Championship matches for 4K distribution over the Italian RIA UHD channel on the Tivusat platform. In September, Eutelsat took a minority stake in V-Nova. Also in September, Vimmi, an OVP, announced the full integration of Perseus within the Vimmi video delivery platform. Both arrangements indicate that V-Nova is making steady progress in commercializing the Perseus technology.

November 2016: MPEG LA Announces DASH Royalty

Dynamic Adaptive Streaming over HTTP (DASH) has been burned into our collective consciousnesses as part solution/part panacea since it became a draft standard in 2011. Since then, DASH has been widely deployed on platforms as diverse as Android devices and Smart TVs. Though Streaming Media advised regarding the potential for royalties in our “What Is MPEG DASH?” article back in 2011 and again when MPEG LA actually formed a patent pool in 2015, when MPEG LA finally announced its royalty policy just before the Thanksgiving break, it was met with shock and disappointment. Briefly, the license calls for a royalty of 5 cents/unit for DASH clients or DASH initiators (essentially apps) after the first 100,000 units, with an annual cap of $30 million.

The situation is curious, as the companies that many assume contributed the most intellectual property to the DASH standard—Microsoft, Cisco, and Qualcomm—are not in the MPEG LA patent pool. Microsoft will likely owe royalties for the DASH player in Edge, putting the company in the unfortunate position of paying to use a standard it contributed to yet not sharing in the proceeds.

As of the time of this writing, the DASH Industry Foundation, which was formed to “promote and catalyze the adoption of MPEG-DASH and help transition it from a specification into a real business,” has had no response, beyond a press release reiterating the previously expressed collective intent of Microsoft, Cisco, and Qualcomm that DASH should be royalty-free. What course of action the DASH IF will recommend for their members— ignore, pay, or fight—is one of the most pressing issues going into 2017.

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MPEG LA announces DASH royalty rates. 

November 2016: HEVC Advance Makes Some Software Royalty-Free

Though HEVC has been available for sale since January 2013, software playback support for computers and notebooks has been dismal, largely limiting HEVC’s use to 4K playback on Smart TVs and OTT/STB devices. In the meantime, VP9 playback is available in Edge, Chrome, Firefox, and Opera, and it has been famously deployed by YouTube, as well as other companies like JW Player. The difference? VP9 is royalty-free, while HEVC comes with a royalty obligation for playback that could equal up to $60 million annually, $40 million from a patent portfolio managed by HEVC Advance, and $25 million from another portfolio managed by MPEG LA.

Seeking to break the logjam, in November, HEVC Advance announced that it would seek no royalties on some classes of HEVC software players, including browsers downloaded by the computer owner after it was purchased. While definitely a step in the right direction, MPEG LA made no similar announcement, leaving a $25 million disincentive on the table for software vendors considering HEVC Advance’s offer. We asked MPEG LA for its thoughts on the HEVC Advance exclusion, but it declined to comment.

December 2016: Nokia Sues Apple for H.264 Patent Infringement

December was a busy time for patent attorneys around the world, as Nokia sued Apple for the infringement of multiple patents in multiple jurisdictions, while Apple sued Nokia and associated companies for antitrust. Most relevant to streaming publishers are the Nokia claims made in Civil Action No. 2:16-cv-1440, where Nokia claimed that Apple infringed on eight H.264-related patents.

As stated in the complaint, “Apple’s products, which support H.264 video, including the iPhone, iPad, iPod, Apple Watch, Mac computer products, and Apple digital media players such as Apple TV, infringe Nokia’s patents asserted in this case.” It appears from the complaint that Nokia is claiming that virtually any use of H.264 encoding or decoding is royalty bearing. If Nokia wins, this means that any companies that distribute H.264 encoders or decoders who aren’t currently paying royalties to Nokia can expect the proverbial bill in the mail, amount, as of yet, undetermined.

Also unclear is whether any of Nokia’s patents are integral to HEVC, adding uncertainty as to the cost of deploying HEVC. It’s increasingly clear that deploying products based upon standards-based codecs is a financial minefield, and that many hardware manufacturers and software developers will be seeking open source alternatives in 2017.

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This December lawsuit may make H.264 a lot more expensive. 

December 2016: AV1 Pushed to 2017

Unfortunately, the codec many are looking to, the Alliance for Open Media’s AV1 codec, may not be available for another 12 months. By way of background, during most of 2016, the Alliance predicted that the AV1 codec would be available sometime “between the end of the 2016 and March 2017.” During conversations with Alliance members in December 2016, this has been changed to “sometime in 2017.” In short, don’t hold your breath, and don’t ignore the potential for VP9.

This article appears in the March 2017 issue of Streaming Media magazine.

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