Heiko Recktenwald on Thu, 7 Feb 2002 03:06:18 +0100 (CET)

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<nettime> MPEG-4 Goes Pay-Per-View (fwd)

I doubt that this is valid anywhere, anybody ?


---------- Forwarded message ----------
Date: Fri, 1 Feb 2002 12:32:48 -0500
From: Henry Huang <hwh6k@hotmail.com>
To: Cyber Rights <cyber-rights@cpsr.org>
Subject: MPEG-4 Goes Pay-Per-View

It's been pointed out that many small Web sites have essentially been
driven out of business by their own popularity -- as rising hits = more
use of bandwidth = big bill$$$$

Well, now it gets worse.  MPEG LA, the holding firm that manages patent
rights for MPEG-2 and MPEG-4, has announced their new licensing terms for


Of particular interest are new pay-per-stream and pay-per-encoded- copy
fees that the content distributor has to pay (quoted below):


  US $0.00033/minute or portion (equivalent to US $0.02/hour) based on
playback/normal running time for every stream, download or other use of
MPEG-4 video data in connection with which a service provider or content
owner receives remuneration as a result of offering/providing the video
for viewing or having the video viewed (including without limitation
pay-per-view, subscription and advertiser/underwriter-supported services).
This royalty, to be paid by entities that disseminate the MPEG-4 video
data, is not subject to a cap. (In the case of MPEG-4 video for which the
number of uses cannot be directly determined (e.g., video supplied as part
of a basic cable service or to a transmitter for broadcasting), a
surrogate (e.g., standard industry audience measurement) is under
consideration.)  US $0.00033/minute or part (equivalent to US $0.02/hour)
based on playback/normal running time of MPEG-4 video data encoded (for
other than personal use) on each copy of packaged medium. This royalty, to
be paid by the packaged medium replicator, is not subject to a cap.


It's known that Fraunhofer put some pretty onerous (albeit unenforcable)
licensing fees in their license terms for MP3, but this goes way beyond
that. Forcing the content provider to cough up a NON-CAPPED fee for every
second of every stream is ridiculous.  Forcing them to cough up a fee for
every DVD or CD with MPEG-4 content that they sell is even worse.

This is exactly the sort of nickel-and-dime scheme that favors large media
providers at the expense of the smaller artists.  Only large companies
have the infrastructure and money to deal with the massive overhead that
tracking and paying these costs will require -- just as only large
companies have the money to finance the massive amounts of bandwidth
generated by a really popular Web site.

Worse, tracking time usage for each stream could very well lead to having
more spyware-type code in individual players.  Anyone with any basic
knowledge of client-server architecture knows it's not *required* (you
should be able to track all of this on the server side) -- but it's an
awfully convenient excuse if the customer doesn't know any better.  "You
see, we NEED to uniquely identify your player, or we aren't legal [COUGH


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