HEVC Licensing Terms Ready for Release

A mindennapos 4k (UHD) televíziós műsorsugárzás irányába vezető egyik legfontosabb mérföldkövet jelenti  a HEVC (H.265) tömörítési eljárások licenszelési szabályainak tisztázása.


While it had been speculated that the much anticipated terms for licensing the required technology to send a video  compressed with the new High Efficiency Coding (HEVC) Standard would be in the range of a $20 million cap on single users (compared to a $7 million cap for the use of H.264 today), the standards body MPEG LA said a group of 25 companies have agreed to terms for an HEVC Patent Portfolio License that puts the cap at $25 million. MPEG LA said the full licensing terms document would be released in the next two months.



The new HEVC Patent Portfolio License will clear the way for manufacturers to develop hardware-based compression boards based on it, software algorithms that take advantage of it, and newly emerging decoding technology to enable all video files to be displayed on Ultra HD TVs, computers, tablets and smart cell phones.

It’s also welcome news for encoder manufacturers like AtemeElemental TechnologiesEricsson and Harmonic (to name a few), which have clamored for a resolution on the licensing terms so they can begin shipping units to customers. (Some vendors have already sent prototype units to key customers, and monitoring usage, however small at this point, in order to test the technology and see if the promised bandwidth savings, without affecting image quality, are real.)

To date, there are few commercial deployments of HEVC technology in the marketplace, Wymbs said, but following discussions with customers at the recent CES show and elsewhere, he sees momentum building for HEVC deployments. Elemental Technologies recently conducted a survey of its customers and found many expressing serious interest in the technology.

“Our reaction is that we’re pleased a resolution is in sight, we’re ready to get on with deployments,” said Keith Wymbs, vice president of marketing at Elemental Technologies. He was not aware of the final numbers related to the license, but stated that licensing payments must begin to be paid starting on usage from May 1, 2013 onward. “Licensing on the encoding side is minimal in terms of the total costs of deploying the technology. In terms of our cost structure, it’s  low. What we’ve heard is that the licensing structure will not be materially different than that of H.264.”

Based on public industry discussions, the terms—which have not been made public—the parameters will be similar to a H.264 license. Both H.264 and HEVC allow the first 100,000 units to be used for free, and both charge $0.20 per unit (stream) after that. However, with H.264, the royalty drops to $0.10 after 5 million units and is capped at $6.5 million. While the HEVC Patent Portfolio License document has not been made public at this point, insiders said the HEVC royalty will never drop, and is capped at $25 million.

The significant difference between H.264 (MPEG-4) and H.265 (HEVC) licensing terms reflects the potential multiple—some still unknown—uses that new IP-based video services will require in the future.

“There are always some business risks in trying to determine what the licensing structure will be and then developing a product that fits our business models,” Wymbs said. “We believe recent disclosures on the HEVC Patent Portfolio License is a best case scenario for the entire industry.”

MPEG LA said HEVC, also known as H.265 and MPEG-H Part 2 standard, has been designed to improve video coding and, thus, video streaming for Internet and mobile service providers. It is also said to reduce the data rate needed for video coding by 50 percent when compared to the current state-of-the-art, H.264 while delivering better image quality. That extra bandwidth gained through HEVC compression is sorely needed, as files get bigger and ever greater in number.

“As contemplated, the HEVC license will utilize a modern streamlined pool licensing approach with simple easy-to-understand terms making the technology readily accessible to the largest possible market in the shortest possible time,” said Larry Horn, MPEG LA President and CEO, in a statement. “MPEG LA salutes the cooperation of patent owners who have worked hard to reach common ground in making a joint patent license available for the convenience of HEVC adopters. As a result of their efforts, consumers benefiting from a marketplace of competitive technology choices will be the clear winners.”

In its effort to include as much essential intellectual property as possible in one license for the benefit of the marketplace, MPEG LA said it would continue to accept submissions of issued patents for an evaluation of their essentiality to the HEVC Standard. A press release said any party that believes it has patents that are essential to the HEVC Standard and wishes to join the HEVC Patent Portfolio License is invited to submit them for evaluation by MPEG LA’s patent evaluators. The terms and procedures governing patent submissions can be found here.

According to industry sources, unlike using H.264, there are no content-related royalties with HEVC. This will save companies like Adobe SystemsAppleCiscoMicrosoft and others significant sums of money.

Content distributors are not mandated to sue HEVC and in fact some (Google) have stated they will instead use VP9, an open and royalty-free compression standard being developed by Google.

The full list of essential patent holders released by MPEG LA includes:

  • Apple Inc.
  • British Broadcasting Corporation
  • Cisco Technology
  • Electronics and Telecommunications Research Institute (ETRI) of Korea
  • Fraunhofer-Gesellschaft zur Foerderung der angewandten Forschung e.V.
  • Hitachi Maxell, Ltd.
  • HUMAX Co., Ltd.
  • JVC KENWOOD Corporation
  • KT Corp.
  • LG Electronics Inc.
  • M&K Holdings Inc.
  • NEC Corporation
  • Nippon Hoso Kyokai
  • Nippon Telegraph and Telephone Corporation
  • NTT DOCOMO, Inc.
  • Orange SA
  • Siemens AG
  • SK Telecom
  • Telefonaktiebolaget LM Ericsson
  • Thomson Licensing
  • Vidyo, Inc.

Apparently, four companies that have signed on have asked not to be identified.