Why H.264 Needs Competition

Our broken patent system in the U.S. has allowed for software patents of basic core functions, which allow companies to strangle competition and innovation. It also allows them to set up monopolies that could control entire sectors of technology. I believe that is the goal of MPEG-LA, and why we need to make sure there are alternatives.

H.264 is the most ubiquitous video codec (compression/decompression software) on the market. There are so many patent claims for it that MPEG-LA, which handles licensing for the consortium of companies that own the patents, says that it is impossible to create a video compression method that does not violate one of their patents. Whether this is true or not has not been proven, but the statement is designed to discourage anyone from adopting a competing royalty free alternative.

This is why so many companies, including Google, have been fighting H.264. A monopoly on Internet video is not a good thing. The patent holders will then be able to charge whatever they want, and place any restrictions on its use that they choose.

There is a huge license fee to incorporate H.264 encoding in a product, including browsers. They make money on licenses for cameras, video players, and even editing software.

Since at least 2010, prosumer and many professional cameras that use MPEG2 and h.264 have come with a license that says that the video shot with these cameras is for non-commercial use only. If the patent owners decide to enforce that restriction once theirs is the only available format, they will be able to demand royalty payments on commercial rights to huge amounts of video content. This is why patent monopolies over basic and essential features are such a problem.

Currently, only H.264 video that is offered for free on the internet can be distributed without paying royalties. All paid videos, even those delivered through subscription, require paying royalties. Technically, if you have advertising on a page that also streams H.264 video, you should be paying royalties. Right now, they are pretty loose about strictly enforcing these conditions, but that is because they still have competition. Once that competition is eliminated, I would expect them to start enforcing these restrictions and attempt to collect royalties.

H.264 has been incorporated into a lot of chips, which is a superior way to handle decoding. Until another format can achieve wide enough adoption to also gain hardware support, competing with H.264 will be very difficult.

Google, with its royalty free WebM, is perhaps the only organization capable of preventing a compete video format monopoly. So far, though, their success has not been very impressive.

There is also a proposed H.265 which is greatly superior to H.264. However, there are companies with over 500 patent claims relating to H.265, so it may never get out the door.

Microsoft and Apple are part of the patent consortium that owns the patents associated with it, so it is the only format they use in their browsers, since they make money from it. Both have a strong financial incentive to continue opposing royalty free video standards I suspect that one of the reasons Steve Jobs worked so hard to kill Flash on mobile had less to do with technology and more to do with profit. Besides the MPEG-4 licensing fees, Flash also allowed for the creation of versions of Apps that could run on a web page and did not have to be sold through his App store, for which his company gets a percentage of every sale. It was greed, and not tech, that killed Flash on mobile.

Both Microsoft and Apple are noted for their abusive attempts to control technologies and wipe out competitors. Giving them control over video is a very bad idea.