It’s easy to imagine the deployment of HEVC as a case study in business and technology schools about how not to launch a technology. Not only do you have a launch cycle that
clearly limited adaption, you also have classic illustrations of two of the major problems
related to standard-essential patents, patent
holdup, and royalty stacking.
Patent holdup refers to the practice of waiting to declare your patent rights until after the
technology has become accepted. Early adopters choose the technology without a realistic
estimate of cost, and once hooked, the costs of
changing technologies are so high that the IP
owner can charge a much higher royalty than
it could at the start. The participants in the
Velos Media patent pool, which launched (by
my count) 4 years, 4 months, and 5 days after
HEVC received first-stage approval, is the perfect example.
The second problem, royalty stacking, describes a scenario where so many patents are
involved that even if each is fair, reasonable,
and non-discriminatory (FRAND), as standard-essential patents are required to be, the total
cost becomes unreasonable. When MPEG LA
announced its $0.20/unit, $25 million annual cap
pricing, it was tough to swallow, but it felt reasonable. Then HEVC Advance launched with
per-unit pricing nearly 10 times as high, and a
cap close to double, and the combined pricing
didn’t feel nearly as FRAND-ly.
As I write this in mid-October, Velos still
hasn’t announced its rates, so the total damage
isn’t known. While we know that Technicolor
also claims to have other HEVC-related intellectual property, there’s actually no guarantee
that there won’t be others.
Most readers know all this. So why am I recounting? Because there’s a Stockholm-based
company named Divideon offering a new codec
that uses technology from the HEVC and Video
Coding Experts Group (VCEG) and a novel design to simplify and add certainty to codec pricing. Specifically, Divideon’s xvc codec comes
with a guarantee that your royalty will be fixed
for the life of the contract, protecting against
Here’s how it works: When creating the codec, Divideon traced the IP relating to each
component back to its inventor. Patent holders who chose to participate registered with
Divideon; if they declined to register, their
technology wasn’t included. The codec design is modular, so if any infringements occur,
Divideon can remove that technology from
If xvc licensees are approached with an infringement claim, Divideon has 60 days to license the IP (at no cost to you), fight the claimant (and bear all costs and damages), or remove
that IP from xvc. Of course, while this guarantees a known royalty, you may lose quality or
performance if an IP owner unexpectedly appears and won’t participate, forcing Divideon
to remove the IP from its codec. I asked about
this, and the company responded that licensees pay by the month and can discontinue anytime. While this provides some protection, you
still may be forced to convert from xvc sometime down the road if this scenario occurs,
which could be seriously problematic if you’ve
deployed xvc in hardware. No solution is without risk.
How does the codec perform? From a development perspective, it’s a work in progress.
However, the company prepared some test
streams that I was able to compare with H.264,
x265, the MainConcept HEVC codec, VP9, and
AV1 files at the same data rate. It wasn’t a totally apples-to-apples comparison for many reasons, but in the two real-world files, xvc was the
quality leader. In the Sintel comparison, xvc
trailed only MainConcept. Pretty impressive
It’s definitely early days, but xvc appears to
be a codec you should keep your eye on.
A Better HEVC Codec?
Jan Ozer ( email@example.com) is a streaming
media producer and consultant, a frequent contributor to
industry magazines and websites on streaming-related topics,
and the author of Video Encoding by the Numbers. He blogs
frequently at streaminglearningcenter.com.
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