Ed Bott on H.264 Licensing Costs

Ed Bott:

And finally, to answer one question that has come up several times in the comments to my post and in the comments over at the IE Blog: What guarantee do licensees have that MPEG LA won’t raise royalty rates by some outrageous amount when the royalty schedules come up for renewal? The current rates are fixed for five years, till the end of 2015, and are renewed again every five years for the life of the patents. That guarantee appears to be in place already in the Summary of AVC License Terms, which sets out the royalties to be paid for different uses of the technology. Here’s the language:

[F]or the protection of licensees, royalty rates applicable to specific license grants or specific licensed products will not increase by more than ten percent (10%) at each renewal.

That goes a long way toward making me feel more comfortable that the cost of H.264 content is not going to impact you and me in any significant way, even after 2016.

★ Thursday, 6 May 2010