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xiphmont

Comments on Cisco, Mozilla, and H.264

Please note: This is not a statement on behalf of Xiph.Org or Mozilla. I speak here for myself, my team, and other developers who share my views on an open web.

If you haven't seen today's announcements from Cisco and Mozilla regarding H.264, you'll want to read them before continuing.

Let's state the obvious with respect to VP8 vs H.264: We lost, and we're admitting defeat. Cisco is providing a path for orderly retreat that leaves supporters of an open web in a strong enough position to face the next battle, so we're taking it.

By endorsing Cisco's plan, there's no getting around the fact that we've caved on our principles. That said, principles can't replace being in a practical position to make a difference in the future. With Cisco making H.264 available at no cost, holding out against H.264 in WebRTC makes even less sense than holding out after Google shipped H.264 in the video tag. At least under these terms, H.264 will be available at no cost to Mozilla and to any other piece of software that uses the downloadable plugin.

Cisco's license hack is obvious enough if you have the money: There's a yearly cap on total payments for any given licensed H.264 product. This year the cap is $6.5M. Any company that pays the cap each year can distribute as many copies as they want. There are still terms and restrictions on how the distribution gets done, but Cisco will be handling that (and only Cisco will be allowed to build and distribute these copies without a separate license).

Once you or your applications download the prebuilt codec blob from Cisco, you're allowed to use that specific blob for anything you want so long as you don't modify it or give it to anyone else. H.264 codecs for everyone! Cisco has committed to these blobs being available for just about every platform and architecture you can think of. "IBM S/360? Yes, please!"

This arrangement has obvious short-term benefits. Open source projects get licensed (if partial and restricted) access to H.264, and users don't feel like they're being held hostage in the ongoing battle between the open web and closed codecs. Firefox and other projects can install H.264 support (via Cisco), which is a big deal.

That said, today's arrangement is at best a stopgap, and it doesn't change much on the ground. How many people don't already have H.264 codecs on their machines, legit or otherwise? Enthusiasts and professionals alike have long paid little attention to licensing. Even most businesses today don't know and don't care if the codecs they use are properly licensed[1]. The entire codec market has been operating under a kind of 'Don't Ask, Don't Tell' policy for the past 15 years and I doubt the MPEG LA minds. It's helped H.264 become ubiquitous, and the LA can still enforce the brass tacks of the license when it's to their competitive advantage (or rather, anti-competitive advantage; they're a legally protected monopoly after all).

The mere presence of a negotiated license divides the Web into camps of differing privilege. Today's agreement is actually a good example; x264 (and every other open source implementation of an encumbered codec) are cut out. They're not included in this agreement, and there's no way they could be. As it is, giving away just this single, officially-blessed H.264 blob is going to cost Cisco $65M over the next decade[2]. Is it any wonder video is struggling to become a first-class feature of the Web? Licensing caused this problem, and more licensing is not a solution.

The giveaway also solves nothing long-term. H.264 is already considered 'on the way out' by MPEG, and today's announcement doesn't address any licensing issues surrounding the next generation of video codecs. We've merely kicked the can down the road and set a dangerous precedent for next time around. And there will be a next time around.

So, we're focusing on being ready.

Fully free and open codecs are in a better position today than before Google opened VP8 in 2010. Last year we completed standardization of Opus, our popular state-of-the-art audio codec (which also happens to be the best audio codec in the world at the moment). Now, Xiph.Org and Mozilla are building Daala, a next-generation solution for video.

Like Opus, Daala is a novel approach to codec design. It aims not to be competitive, but to win outright. Also like Opus, it will carry no royalties and no usage restrictions; anyone will be permitted to use the Daala codec for anything without securing a license, just like the Web itself and every other core technology on the Internet.

That's a real solution that can make everyone happy.

I can't resist a little codec fantasy football.

MPEG HEVC licensing isn't set yet. It will be interesting to watch the negotiations if Cisco's H.264 giveaway plan is wildly successful. In the future, could nearly every legal copy of HEVC come as a binary blob from one Internet source under one cap? I doubt that possibility is something the MPEG LA has considered, and they may consider it now that someone is actually trying to pull it off with H.264. Perhaps in five years, even cameras and televisions will download a software codec to avoid paying monopoly rents. Sillier things have happened given sufficient profit motive.

Or maybe they'll build in a free, legally uncomplicated copy of Daala instead. Dare to dream.

—Monty Montgomery <monty@xiph.org> and others
October 30, 2013



MPEG-LA licences "codecs"

(Anonymous)

2013-10-30 02:35 pm (UTC)

You actually get both a decoder and an encoder licence in "a codec" licence from MPEG-LA so your part about "Software encode and decode (the two halves of a codec) are two different products, so that brings this year's cap to $13M." isn't right. They are one product.
(Frozen) (Thread)

Re: MPEG-LA licences "codecs"

xiphmont

2013-10-30 03:08 pm (UTC)

According to the license terms summary I linked, you're right. Interestingly, other licensing experts proofed my post before it went up, and they didn't mention any mistake. I'm following up with them now to confirm the error, and I'll correct the post promptly once I'm sure. [edit: post corrected]

Edited at 2013-10-30 03:43 pm (UTC)
(Frozen) (Parent) (Thread)

If CISCO's implementation can steal the thunder from x264, that will please me greatly, considering how viciously their project lead antagonized Theora and VP8.
(Frozen) (Thread)

That hatchet is long buried. Antagonizing now doesn't serve any purpose.
(Frozen) (Parent) (Thread) (Expand)

What about audio? Does Cisco's blob contain an AAC codec? What does that mean for Opus in WebRTC?
(Frozen) (Thread) (Expand)

Cisco's blob does not contain AAC (at least not as of now).

Opus's place in WebRTC is not in jeopardy. For one thing, it significantly outperforms its competition, and there's no substantial body of content for which backward compatibility is more important than technical or licensing considerations. We've also apparently done a good job answering our IP critics.
(Frozen) (Parent) (Thread) (Expand)

(no subject) (Anonymous) Expand
(no subject) (Anonymous) Expand
(no subject) (Anonymous) Expand

But I don't want a blob!

(Anonymous)

2013-10-30 05:00 pm (UTC)

The worst angle in all this may be that everyone's getting a blob. An opaque, unaudited, source code-less blob which, if history is any guide, will be a ripe source of security holes throughout its life. I hate that.

Also, a correction for your note [2]: It says Cisco's yearly cap is "$65M."
(Frozen) (Thread) (Expand)

Re: But I don't want a blob!

xiphmont

2013-10-30 05:04 pm (UTC)

Well the yearly cap liability is $65M over ten years, so technically correct but some pretty awful wording. I've changed it to something [hopefully] more clear, so good catch.
(Frozen) (Parent) (Thread)

The blob returns

(Anonymous)

2013-10-30 05:39 pm (UTC)

Even if they paid me to use it I wouldn't not only for ideological reasons. It hinders research and progress. But even in this case how other browsers can use it? What if someone comes with further optimizations? It is not for me and it shouldn't be for you.
(Frozen) (Thread)

How is it that HEVC licensing is not yet defined when some vendors are already starting to deliver products?

http://www.elementaltechnologies.com/newsroom/press-releases/elemental-achieves-worlds-first-real-time-4K-hevc-transmission

(Frozen) (Thread)

Right. This is especially ironic when MPEG proponents complain about phantom 'uncertainties' in VP8/VP9 licensing.
(Frozen) (Parent) (Thread)

This is the last gasp before they lose...

(Anonymous)

2013-10-30 11:28 pm (UTC)

I think that this is an indication that the H264 guys have given up - they *know* that they will not be able to compete against VP9 with a paid-for patented codec.

No one is going to pay for video codecs ever again.
(Frozen) (Thread) (Expand)

Re: This is the last gasp before they lose...

xiphmont

2013-10-31 05:15 am (UTC)

It would be a pleasant surprise if it turns out to be true. We can hope.
(Frozen) (Parent) (Thread)

Cisco?

(Anonymous)

2013-10-31 12:56 am (UTC)

Maybe NSA is footing the bill. Now they will know what you're watching too! :)
(Frozen) (Thread)

Streaming

(Anonymous)

2013-10-31 02:26 am (UTC)

MPEG LA probably approves this because if they would win they would get huge sums of money charging for streaming services over the internet from anybody using this codec and that is what they are after in the long run. Software/hardware using this codecs and charging for it was popular in the past now it's all about streaming and finding a way how to charge a fee on this services.

They don't care in the end if everybody uses CISCO codec and avoids paying for licence in near future because they know having monopoly position will enable them to charge fee from streaming service providers in the future and this is what they are after with this move. Investing some money temporarily that would enable them to collect more money in the future and probably this it why Google will try to do anything for this not to happen because they are huge when it comes to providing internet streaming services (YouTube).
(Frozen) (Thread)

This is not and never has been about the money that comes directly from licensing. Back in the MPEG-2 days, the licensing was a huge cash cow. That's not really been true of H.264 (though it certainly recovered costs many times over).
Licensing (as practiced now) is about controlling market effects. Right now, pool members mostly only have to worry about competing with other pool members. Licensing and the patent thicket form a nice moat that prevents pesky unwanted competition from appearing unexpectedly out of nowhere.

It's not the money made from licensing-- it's the money licensing allows you to make.
(Frozen) (Parent) (Thread) (Expand)

Re: Streaming (Anonymous) Expand

Cisco's Costs

(Anonymous)

2013-10-31 03:39 am (UTC)

As it is, giving away just this single, officially-blessed H.264 blob is going to cost Cisco $65M over the next decade[2].

The way this is worded implies Cisco will be paying $65 million extra on top of its existing licensing costs. Surely it's more likely to be the case that Cisco would be paying that $65 million in H.264 licensing anyway for all its existing use of H.264. Given that Cisco probably reaches the H.264 licensing cap as is, wouldn't giving away these binaries from the OpenH264 project only add the cost of the running of the project?

And does Cisco receive any income from H.264 licensing? I remember reading on Microsoft's Internet Explorer blog that Microsoft recoups half its H.264 licensing costs from the income it earns from the patent pool. So it could be that Cisco's "real" licensing costs end up being lower than $65M anyway.
(Frozen) (Thread)

The same thing occurred to me when I first heard about the plan, and I asked a contact at Cisco about it. He said Cisco is nowhere near any caps, and this was going to add substantially to their licensing costs. He didn't say anything more specific at the time because the licenses were 'complicated' (and I would not expect him to confirm any sort of hard number anyway).

I had some related followup questions regarding how the cap works in practice, and was supposed to have a call with him about it a few days ago, and we both missed. Hopefully we'll get another chance in the next few days. If not, I'm pretty certain to see him at IETF88.


Edited at 2013-10-31 09:02 pm (UTC)
(Frozen) (Parent) (Thread)

For how long?

(Anonymous)

2013-10-31 06:24 am (UTC)

Is Cisco committing to do this for any particular length of time?
(Frozen) (Thread)

I don't recall seeing any hard dates in any announcement. "Indefinitely" was clearly the intent, or at least till the patents run out. There are some practical reasons to be skeptical about that of course.
(Frozen) (Parent) (Thread)

What happens in 2015?

(Anonymous)

2013-10-31 09:09 am (UTC)

This is all well and good news, but the one question I haven't seen answered anywhere is what happens in 2015 when the MPEG LA can set new rates? As I understand it, there are some limits on the amount of rate increases on a per-unit basis, but none of those restrictions apply to the caps; they'd be free to abolish the caps entirely if they wanted. While the caps aren't going away (since some of MPEG LA's most valued members undoubtedly rely on them), the new rates could presumably add further restrictions targeted at what Cisco is doing here, with H.264 even further established.

So what happens in 2015 if Cisco is on the hook for a substantially larger bill than $65M, not just from an increase in the cap (which already has been increasing quite quickly), but by changes in the license terms that attempt to clamp down on this licensing hack? If Cisco chooses not to continue under such conditions, what is the status of the millions of existing binary codecs previously distributed?
(Frozen) (Thread) (Expand)

Re: What happens in 2015?

maikmerten

2013-10-31 10:08 am (UTC)

Luckily Cisco is both licensee and licensor - it has patents in the MPEG LA pool. I would assume that each licensor has to agree to new licensing terms or that Cisco could (in worst case and if they care enough) threaten to leave the patent pool.

Edit: Cullen Jennings of Cisco commented on this, basically confirming my guess: http://www.ietf.org/mail-archive/web/rtcweb/current/msg09334.html

Edited at 2013-10-31 02:45 pm (UTC)
(Frozen) (Parent) (Thread)

Re: What happens in 2015? (Anonymous) Expand

Commitment?

(Anonymous)

2013-10-31 12:24 pm (UTC)

What prevents Cisco from pulling their codec blobs? Good will and reputation?
(Frozen) (Thread)

That, and [I would expect] contract law. It's a good question though, and I've wondered about it myself. That said, it's not high in my list of worries. I'm much more concerned with up-front execution.

Edited at 2013-10-31 08:55 pm (UTC)
(Frozen) (Parent) (Thread)

For how many years will CISCO provide this?

(Anonymous)

2013-10-31 04:04 pm (UTC)

One? Ten? Forever? Have they made any legally-binding promise?
I've not found this info in the linked CISCO announcement.
(Frozen) (Thread)

Cisco's motivation?

(Anonymous)

2013-11-01 08:33 am (UTC)

I am wondering about Cisco's motiviation doing that. Distributing a blob .. huh. What's inside besides the codec? The next NSA bug?
(Frozen) (Thread)

Re: Cisco's motivation?

xiphmont

2013-11-01 09:32 am (UTC)

See above; Cisco is providing means to audit the blobs.
(Frozen) (Parent) (Thread)

WebM

(Anonymous)

2013-11-02 09:46 am (UTC)

So what does this all mean for the future of WebM?
(Frozen) (Thread)

No way to know for sure, but I doubt it can be good :-(
(Frozen) (Parent) (Thread)

Freedom from patents delayed until 2027

(Anonymous)

2013-11-14 01:25 am (UTC)

It seems to me that the excellent work done by Xiph.org and Google to create open and free encoders have the H.264 patent holders scrambling to get H.264 entrenched as the de-facto video standard. Cisco's plan to distribute the encoder freely is a brilliant way to do that.

Everyone seems to think that Cisco is the good guy, doing the open source community a great favour. However Cisco is a H.264 patent holder and receives royalties. With H.264 as THE standard, the yearly cap Cisco would pay is nothing compared to the total royalties received from all H.264 embedded devices such as smart phones, tablets, DVD players, cameras, etc. You just have to look at the profit Microsoft makes from the FAT patent to see how lucrative this is (even if split over many companies).

Indirectly consumers will have to continue paying royalties for every H.264 embedded device they purchase (and video content too), probably until 2027. Competition from Xiph.org and Google may have kept those fees much smaller than they could have been (unlike MP3 licensing terms, for example). With H.264 entrenched, competition is irrelevant and the fees and terms can change with impunity.

I sincerely hope Daala and Opus are successful in the next round so I can spend more time developing software without having to walk through the increasingly dense patent minefield.
(Frozen) (Thread)

Re: Freedom from patents delayed until 2027

xiphmont

2013-11-23 07:30 pm (UTC)

Cisco has stated unequivocally that they pay more in licensing for h.264 than they receive (and I believe them). Thanks for the kind wishes regardless :-)
(Frozen) (Parent) (Thread)

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