H.264

Nilay Patel on H.264:

MPEG-LA has said to us that only the parties at the top and bottom of the H.264 tool chain are generally required to pay royalties; that is, the party who makes the encoder, and the party who distributes the encoded file to the end users.

(...)

That ultimately means products that come with an H.264 codec don't also come with a license to use the codec commercially -- in order to distribute H.264 content in a way that makes money, the distributor has to pay for a separate license. So products like Windows 7, Mac OS X, Final Cut Pro, Avid, and modern video cameras aren't licensed to distribute video for commercial use -- they all have fine print somewhere that says they're for personal and non-commercial use only. It's language that feels incredibly aggressive and broad, especially since it apparently conflicts with the MPEG-LA's general position that only the final link in the chain -- the party selling or distributing the video to the end user -- has to pay royalties for using the H.264 encoder.

(...)

Using H.264 to distribute free internet video to end users doesn't cost a thing, and won't cost anything until at least 2015. After that, it's up in the air, and that's a bridge we'll have to cross when we come to it -- there's a chance the MPEG-LA could start charging a royalty for free video in five years.

(I'm quoting selectively, so you should read the whole thing.)

I have used H.264 videos extensively¹ on this blog, but these terms make it obvious to me that I can't keep doing that. Chances are that I will have to remove all of my H.264 files in 2015.² Given these terms, for my own websites, I don't feel that H.264 is still a feasible option for embedding video content.

The current situation with H.264 seems similar to the problem we had with GIF files in the 90s. Back then, Unisys waited until GIFs were popular, and then suddenly decided to ask website owners to pay license fees for an LZW patent held by Unisys. People reacted badly to the GIF situation, developing PNG as an alternative. I don't think we would accept such an uncertain licensing situation if it applied to JPG files, to HTML files, or to JavaScript files, and I don't think we should accept it for video files.

With people having to decide on what format to use for the foreseeable future, simply saying "That’s a bridge we’ll have to cross when we come to it" just doesn't seem good enough. Unless MPEG-LA commits to — at the very least — letting people distribute H.264 files without paying license fees (provided that the files were created using licensed software³), I can't be sure that I will be allowed to keep my H.264 files online. I don't have a problem with paying for a licensed H.264 encoder, but I can't afford suddenly paying considerable amounts of royalties if Hacker News links to an article on this blog.

I'm not sure how to embed videos in the future. The most obvious solution would be to go back to Flash files hosted on another site.⁴ This is a rather painful conclusion, because I think embedding H.264 files using the video tag is a much more usable, efficient, and elegant solution. Hosting my own H.264 files also means I'm not dependent on another site for my video content.

Unfortunately, given the current situation, I don't see how H.264 could possibly be a valid option for me.

Note that this is not about being "open" or about taking some kind of idealistic stance. I want to keep using H.264. It's a great format. But unless MPEG-LA changes their license, the very simple fact is that I might be screwed come 2015 if I keep using H.264 files in my blog.

Pricing

If you're wondering how high the royalties might be after 2015, the AVC/H.264 License Terms Summary (PDF) says:

In the case of Internet broadcast (AVC video that is delivered via the Worldwide Internet to an end user for which the End User does not pay remuneration for the right to receive or view, i.e., neither title-by-title nor subscription), there will be no royalty during the first term of the License (ending December 31, 2010), and after the first term the royalty shall be no more than the economic equivalent of royalties payable during the same time for free television.

As far as I can tell, the "free television" part refers to this:

For (b) (2) where remuneration is from other sources, in the case of free television (television broadcasting which is sent by an over-the-air, satellite and/or cable Transmission, and which is not paid for by an End User), the licensee (broadcaster which is identified as providing free television AVC video) may pay (beginning January 1, 2006) according to one of two royalty options: (i) a one-time payment of $2,500 per AVC transmission encoder (applies to each AVC encoder which is used by or on behalf of a Licensee in transmitting AVC video to the End User) or (ii) annual fee per Broadcast Market starting at $2,500 per calendar year per Broadcast Markets of at least 100,000 but no more than 499,999 television households, $5,000 per calendar year per Broadcast Market which includes at least 500,000 but no more than 999,999 television households, and $10,000 per calendar year per Broadcast Market which includes 1,000,000 or more television households.

So the license terms summary seems to imply that smaller websites would have to pay "no more" than 2500 US$ per year if they want to publish H.264 files. That doesn't feel particularly reassuring to me.

Note that I might be wrong about this. Feel free to read the License Terms Summary for yourself.

Update

It seems the licensing problem has now been resolved:

MPEG LA announced today that its AVC Patent Portfolio License will continue not to charge royalties for Internet Video that is free to end users (known as “Internet Broadcast AVC Video”) during the entire life of this License.