With previous claims about the LCEVC video codec technology being cheaper than royalty-free, V-Nova had a lot to live up to in its licensing terms press conference this week.
V-Nova has cemented its simple two-tiered licensing model for the MPEG-5 Part 2 codec enhancement technology. Any company involved in making consumer products, chipsets, operating systems, browsers, device playback drivers etc will be able to license LCEVC for free via the Integration License, while any service provider of a video entertainment service (broadcast, streaming, or otherwise) can access the Usage License, with fees capped based on user base.
V-Nova insisted that the licensing structure would not be changed later down the line, potentially stinging the free users with unexpected and unavoidable costs?
“This is not a decoy model – this is a model that we plan to maintain long term,” declared CEO Guido Meardi.
He claimed that the model would still be commercially viable. “In reality, it does make money. This is a model that is prone to revenue integration issues, we know it, but once the standard is widely available in the ecosystem, if you run the numbers, it’s a very profitable model,” he said in the press conference. “It’s the definitive model in order to make money, and we aim to convince the industry this is the right model. We don’t plan to increase it, we plan to expand application.”
Simone Ferrara, V-Nova’s SVP of technology and IP strategy, also weighed in. “On a per-device basis this license is an accepted model shown to generate revenues despite resistance. We had a choice and instead focused our attention on the benefits of technology. The more the ecosystem expands, the more usage of LCEVC will be there and more services will be launched and deployed. We are going to look at locking the term multiyear, but haven’t really discussed all the little details of licence terms yet,” he said.
Ultimately, what we have here is a model whereby the device manufacturer no longer carries all the risks. The free Integration License comes with optimized encoder and decoder libraries for multiple platforms, onboarding support for SDK integration, conformance and integration testing, and ongoing maintenance and support.
“Licensing is as important as the technical benefits. The standard itself is pioneering but also the licensing model is pioneering and modern – we believe it will foster rapid adoption of the standard,” added Meardi.
“Let’s think bigger,” he continued, launching into one of his famous thought experiments. “What if the entire planet was to adopt LCEVC? If it was adopted fast, the impact would be huge. LCEVC is complimentary to other coding technologies so it does not displace anything, it cuts global data traffic by double digits, and cuts CO2 emissions of video transcoding in half. And that can all be done now with a software upgrade.”
The V-Nova co-founder declared he personally felt a big responsibility to devise a licensing model that avoids any Mexican stand-off situation similar to the ones that have made video codec royalties infamous the world over. The notion that the typical licensing model of video codecs is not suited to LCEVC has been well received. This model is about more than money – it is about driving adoption of new devices and services because device makers believe draconian codec licensing models slow down global adoption.
Another crucial element is about start-ups. V-Nova wants to encourage smaller services to jump on board, so is planning to hand out exemptions for video service providers under a certain threshold of users, which we understand will be under 100,000 subscribers for SVoD but far higher for AVoD, although the finer details are still being worked out. This is more similar to other licensing models – as no one disputes the importance of getting smaller players involved early in licensing programs to grow with the technology.