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Royalty Deadline for H.264 Extended, but It's Still Bad for the Web

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As if the webs video codec issues werent complex enough, the group that controls the licensing and royalties for the H.264 video codec has announced that H.264 will remain royalty-free until the end of 2016.

One the surface it sounds like a good thing at least until 2016, youre free to post H.264 videos on your web site without paying royalties to MPEG-LA, the controlling body. But after 2016, MPEG-LA could charge you whatever it wants even an Austin Powers-style one million dollars per second of video.

MPEG-LAs latest move seems ripped straight from a crack dealers marketing guide Here kid, the first hits free. Then, once the web is even more heavily invested in H.264 than it is now, MPEG-LA can set its royalty fees at whatever rate it wants, sit back and reap the profits.

This news comes at a time when the web is in a heated debate over how to best display videos in the browser. The vast majority of content providers rely on Flash (which can decode H.264) to show videos. The certainty of Flashs longevity on the web was thrown into question by the recent arrival of the iPad, which, like the iPhone, iPod Touch and other mobile devices, doesnt support the Flash Player software. Some sites are experimenting with using HTML5 to display videos in either H.264 or Ogg Theora file formats. But different browser makers have chosen to support different file formats because of the licensing complexities Mozilla, Apple, Opera and Google are all picking different sides.

Its important to understand that the royalty fees being deferred by MPEG LA are in addition to the licensing fees the group already has in place (at over US$50,000 per year). Proponents of H.264, along with many unaware users, often argue that the licensing fees are irrelevant because web users like you and I remain unaffected by them.

But that doesnt mean that the licensing fees wont affect the web. Sure, the fees are no big deal for Apple, YouTube and other established players, but what if you want to build a web video encoding service to compete with YouTube and Vimeo? Well, if you want to serve your video to iPhone/iPod Touch/iPad users youre going to need to come with $50,000+ in licensing fees.

Even without the royalty fees arriving in 2016, the licensing costs alone put start ups at a disadvantage, meaning that an H.264-encumbered web might well miss out on the next big leap in web video sharing.

Then theres the decoding side of the equation.

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