MPEG LA won't charge free streamers to use H.264, will charge for selling codec

While Google, Vimeo, and others continue to experiment with H.264 as the codec of choice for HTML5 Web browser-embedded video, there's still considerable debate over whether W3C -- the caretakers of HTML and other Web standards -- should allow Web proprietors to embrace standards that are not essentially free. MPEG LA, the rights holder for H.264 technology and its licensing agent for the Internet Broadcast AVC Video portfolio, recently said it will not charge royalties for the use of H.264 encoding in video that's delivered free -- specifically, for any video for which the creators or servers are not compensated -- at least until the end of 2015 (a date corrected from the end of 2016, which the licensing agency originally announced).

Does that mean H.264 is free for streamers? In a clarification for Betanews this afternoon, MPEG LA spokesperson Tom O'Reilly said it may very well be free...for those who use the codec for that purpose. But not for those who sell the encoding software that utilizes the codec.

"While MPEG LA does collect a royalty on the codec, that royalty relates to the making and selling of the product itself," O'Reilly told Betanews. "The right to use codecs for applications like Title-by-Title [where a fee is paid for the video's replication], Subscription, Free Television, and Internet video is not covered by that royalty, however. Rather, it is the subject of separate sublicense rights and royalties."

The Internet video subcategory is the tier that includes free streaming, where users will be exempt from paying royalties. But not from obtaining licenses, and that would appear to be the sticky part. In order for streaming video viewers to effectively be licensees, do they have to enter into an agreement with MPEG LA -- something on the order of a EULA?

Apparently not, responded O'Reilly: "Our AVC License is beneficial to all sites using H.264 because it provides coverage for use of H.264 in these free Internet applications." That would appear to indicate that a licensed streaming video provider effectively extends licensed use of the technology for decoding the streamed video, to its user, making the user effectively licensed.

O'Reilly added that the cost of the royalty effectively also pays for the license, so anyone who's purchased a licensed H.264 codec (which may be included with video production software, or sold separately as add-ons) has thus paid the royalty. If that party produces free Internet video, then the coverage purchased at that time extends to the viewer.

That goes to the concerns of Mozilla contributor Robert O'Callahan, who last week argued in a blog post that MPEG LA effectively reserves the right to sue the user or viewer of a streamed video whose producer was not licensed to use the H.264 codec to encode it. That may be somewhat of a stretch, however, and O'Reilly did not get into that level of hypothetical detail with us.

The latest official word on Mozilla's reaction to MPEG LA's news comes from a pair of tweets from Mozilla CEO John Lilly: "Regarding that MPEG-LA announce: It's good they did it, but they sort of had to. But it's like 5 more years of free to lock you in 4ever," Lilly wrote. "And my tweet last night about restrictions on the use of AVC to create videos still holds and is a major problem."

The tweet to which Lilly referred was not listed in his Twitter archive as of today. However, Mozilla contributors are on record as voicing their opposition to the possibility that by not being free for distribution (just free for use), the browser maker might not be able to include it within the Firefox browser under its current MPL licensing policy.