HEVC Advance shifts position once again – not much market response

When it comes to a story about HEVC and one of the patent pools, unless it is an action that is going to break the licensing deadlock and get everyone in agreement, the tendency is for your eyes to glaze and not take in the details.

The details of the announcement this week are that HEVC Advance, one of the three main licensing pools to suggest you buy a license from them for all your HEVC patents, has eliminated subscription and title by title content distribution from its patent license.

This is about the 4th adjustment to its licensing terms since it came into being in 2015. Essentially it has now cut out streaming and pay TV services, and in the past it has cut out content owners, and this should leave just physical decoding platforms – we presume set tops, surveillance cameras and Blu-ray media as well.

HEVC Advance said this was in order to accelerate HEVC adoption but we don’t see much getting in the way of HEVC adoption, just in paying a license for it. We can see how this is a last gasp attempt to gain some revenues in a way bypassing the interests of AOMedia, the group pushing a royalty free UHD codec built around VP9, and made up of Netflix, Amazon, Microsoft, Intel, Google, Cisco, Mozilla and others. They mostly worry about streaming and anything which goes to their platforms, so this may be to align the messaging so that it does not conflict with that group. It may make companies who are members of both groups happier or at least clearer about what they are asking for.

But it does nothing to make up the ground against MPEG LA, the licensing authority which issued the first patent pool around HEVC. However, the two lead payers and beneficiaries of the MPEG LA group, in Apple and Samsung, have recently joined AOMedia, so perhaps this is some kind of carving up of interests across the two. Although, MPEG LA has over 200 licensees, way ahead of any other royalty bearing group and the fact that neither of them are members of HEVC Advance seems to suggest that phone makers are comfortable NOT licensing from HEVC Advance.

We’re not sure where that leaves the third licensing group Jelos Media, or the interests of Technicolor, which recently sold all its patents, including those in MP4, to InterDigital.

Licensors of the HEVC Advance pool are few and far between and include very few pay TV operators or CE equipment makers, we can see Sky UK and Sky Deutschland among the operators, and Germany’s ABOX42 set top software specialist among them, SmartLabs, the set top firm from Russia, Tatung and Humax. But Humax is also listed among the licensors of HEVC Advance, as are Dolby, GE, Philips, Warner Brothers and Samsung – so both paying royalties and receiving them. The rest are smaller businesses, so licenses are not at the 200 or 300 you would expect them to be at if this was the only patent pool covering the technology and currently sit at 43.

A statement from HEVC Advance said, “By eliminating non-physical HEVC content distribution from our license, we are transforming to meet the needs of distributors looking to adopt HEVC and bring the incredible bandwidth savings and clarity of 4K UHD to consumers,” a quote attributed to HEVC Advance CEO Pete Moller.

It has also expanded a previous discount program to devices which cost as much as $80 a unit and reduced its combined $45 million a year maximum payment cap to $40 million, and also expanded its Trademark Program discounts to include physical media. There has previously been discounts for devices costing less than $40. The MPEG LA maximum annual payment is down at around $25 million by comparison.

Physical content distribution (i.e. Blu-ray discs and other types of physical media) and devices will continue to be licensed, says HEVC Advance.

Just one month ago the original MPEG2 patents for set tops expired, which should have freed up considerable revenue for more advanced codecs at least on some early cable set tops still in play.