Streaming Vendor News Recap For The Week Of April 6th

Here’s a recap of all the announcements from streaming media vendors that I saw for the week of April 6th. Lots of news to come next week at NAB. I’ll have a special NAB news round-up each day next week.

New HEVC Patent Pool Launches Creating Confusion & Uncertainly In The Market

Last month, a new group named HEVC Advance announced the formation of a new HEVC patent pool, with the goal of compiling over 500 patents pertaining to HEVC technology. Some were surprised by the announcement since MPEG LA already offers licensing for HEVC patents, but it’s not unusual for multiple patent pools to emerge. Philips and Mitsubishi have some essential patents and aren’t currently in the MPEG LA pool, so there was always the option that another HEVC pool might be formed.

What caught people off guard and what I don’t like about HEVC Advance’s approach is their lack of concrete details and clarity of their intentions. In a call with a company spokesperson who works at GE, one of the backers of the pool, they would not give me any details on what patents they have, what the licensing terms are or which HEVC applications they might impact. The company also took a shot at MPEG LA telling me that some patent holders wanted an alternative to MPEG LA, but wouldn’t tell me why, or what alternative HEVC Advance offers. In their press release, they say their initial list of companies in the pool are, “expected to include GE, Technicolor, Dolby, Philips, and Mitsubishi Electric” but didn’t break out which patents they each hold and would not share patent numbers with me.

The company has said they will have more details to share in the coming months, yet they acknowledge that the patents have not gone through an independent patent evaluation process. Essential patent evaluation generally works by having an evaluator compare claims in a patent with the applicable (HEVC) standard specification and if one or more claims is necessarily infringed in connection with use or implementation of/reads on the standard, then that patent claim is determined to be essential. A new patent pool should have that completed and in place, before announcing in the market. Immature licensing programs are a threat to everyone, and that’s what HEVC Advance is. Before launching, HEVC Advance needed to be way more mature, specific and decisive if they are trying to position themselves as a significant and industry-enabling HEVC patent pool.

Patent licensing and IP uncertainty is always a risk with any new video compression technology, and HEVC is no exception to that rule. Most in the industry have been predicting minimal concern on that front so far, given the well structured nature of the MPEG LA patent pool, the fair licensing structure, and a general belief within the CE and codec vendor communities that the industry had learnt from past experiences and would not adversely hinder HEVC uptake through patent uncertainty.

CE Adoption numbers have been looking promising since late 2014, with many smart 4K TVs and newest smart phones from Apple and powered by Android offering built-in HEVC decoding capability. 4K trials are also underway around the world, most recently by Tata Sky for the World Cup Cricket tournament, powered by Ericsson and Elemental. The recent announcement by HEVC Advance throws a hard wrench into that momentum for several reasons. One, it offers no clarity or reassurance to potential licensees that they will be given a smooth path to truing up on past shipments and be offered reasonable and financially viable terms. Second, it is heavy on brand names and light on details, which does not generally reflect a mature program that is designed to maximize adoption.

We also have no clarity on the strength of the claims that the group is making, or what exactly these patents relate to. If they are for areas not directly tied to core video processing, for example audio or certain HDR techniques or specific filters that offer incremental improvement, then their impact could potentially be circumvented. But if they cover core video processing tasks within the HEVC standard, then we have a big problem on our hands. The good news? The community has by and large had enough of patent related disruptions, and so if indeed the latter is the case, expect some heavyweights to jump into the fray quickly and decisively to resolve the mess.

You would think HEVC Advance would offer more details, but so far, they refuse to. They did tell me that their patents were “core” and “essential” to HEVC deployments, but didn’t define exactly what that meant, or which use cases they were referring to. Of the five companies they expect to have in the pool at launch, they offered no opportunity for me to speak to any of them and it’s clear that this GE is currently leading the pool. This might be good for patent holders who have a clear desire to make money from their patents, but bad for the industry participants that mighth have to license them. Of course HEVC Advance spins it in a positive way saying it’s good for the entire industry as it allows you to go to one place to license many patents, but if they are expensive, then that’s not positive.

One has to wonder why all of the five companies named in the press releases decided not to join the MPEG LA pool. They had the opportunity to join, but clearly felt they can earn more money with a new pool. How much more money we don’t know until we see their licensing terms. If you want a breakdown on MPEG LA’s HEVC licensing costs, see Jan Ozer’s great article, that gives you all the hard numbers.

HEVC Advance has been quoted as saying that the, “market is requiring a different approach to aggregating and making HEVC essential patents available for license”, but again, won’t say or detail how their approach is different. I also don’t see the “market”, defined as those who license HEVC patents, saying their needs to be an alternative model to what MPEG LA already has in place. Companies behind HEVC Advance simply want to get paid more than they could by being in MPEG LA’s patent pool, which we’ll know for sure when they disclose their licensing terms. As a CNET article pointed out, HEVC Advance promises a “transparent” licensing process, yet won’t share any details. There is nothing transparent about how they have decided to come into the market.

Note: Frost & Sullivan Analyst Avni Rambhia contributed to this post.

Cogent Plans To File Complaint Against Comcast With FCC Over ISP Network Access

Now that the new Open Internet rules have been passed, Cogent plans to file a complaint with the FCC against Comcast regarding access to their network. I’m also hearing that Comcast won’t be the only ISP that Cogent plans to go after. The complaint can’t be filed until 60 days after the order goes into effect following publication in the Federal Register, which hasn’t happened yet 60 days after the law was passed, so the earliest we could see the complaint is the 26th of this month still a few months away. (Thanks to Larry Downes for noticing my error) I don’t know if the FCC will even make the complaint public, but in typical Cogent fashion, the company wants all of their access to the ISPs to be free, with as much capacity as they want. It’s the same sorry argument Cogent has been using for years and plans to argue about the ISP’s “monopoly” and “control” over the last mile.

When it comes to Cogent, you have to remember that this is a company that does not use common sense when it comes to their business practices. To date Cogent has had peering disputes with Level 3, Sprint, Deutsche Telekom AG, Teleglobe, AOL, France Telecom, TeliaSonera, Sprint-Nextel and others. Their argument is that they should not have to pay for access to an ISPs network and think they should be able to send any ISP as much traffic as they want, with no cost to Cogent of any kind.

I find it funny that the only ISP that has actually violated net-neutrality principles with prioritized traffic is the one complaining. And yes, Cogent is an ISP. Maybe not at the scale of a Comcast or Verizon, but Cogent offers access to the Internet as a service. Cogent thinks they should get access for free, but if I am a CDN or a non-peer of Cogent will Cogent give me free peering to reach their customers? Of course not. So why does Cogent expect the same from all other networks until the end of time? Because they don’t use any common sense or intelligence when it comes to this topic. They simply aren’t rational.

The bottom line is that interconnects and transit are competitive, paying for them is standard industry practice in the U.S. and this model has been working just fine for years, except for Cogent’s dispute history. Some folks are also telling me that Cogent has told them that ISPs are in violation of the new Open Internet rules, which of course is factually inaccurate. The Open Internet rules do not “regulate” interconnection agreements in any way, as of now. Of course, while the FCC applauds itself on forbearing from Title II price regulation, (which is a lie) it provides a backdoor way for it to control interconnect pricing if they wanted to.

The Open Internet order uses langauge that gives the FCC the right to hear interconnection complaints but the order “does not apply the Open Internet rules to interconnection.” The FCC says the “best approach is to watch, learn, and act as required, but not intervene now, especially not with prescriptive rules.” I don’t think the FCC will change their stance on this any time soon, since they have made it clear they don’t understand the interconnection market, but I’m sure Cogent is hoping to convince them otherwise.

At least Cogent’s argument never changes. They want it all for free, to improve their bottom line. Trying to disguise that argument as a violation of Open Internet rules is not only factually wrong, it’s just grandstanding on their part.

Enterprise/Edu Speaking Spots Open At Streaming Media East Show

The final program for the Streaming Media East show is nearly complete with just a few speaking spots still open. If you are interested in joining any of the enterprise/education focused sessions below, please contact me.

Tuesday, May 12, 2015
10:30 a.m. – 11:30 a.m.
Enterprise Delivery: Building an Internal Streaming Solution
Two round-table speaking spots open

Tuesday, May 12, 2015
4:00 p.m. – 5:00 p.m.
From the Classroom to the Athletic Fields: Streaming In Educational Institutions
One round-table speaking spot open

Wednesday, May 13, 2015
3:15 p.m. – 4:00 p.m.
Integrating Streaming, Video Conferencing, and Unified Communications Solutions
One round-table speaking spot open

White Paper: Shifting Live-To-VOD Media Processing To The Edge

To date, the most popular paradigm for multiscreen content transcoding has been a just-in-time-packaging (JITP) approach, driven by low-cost storage, manageable content volumes, and expensive live transcoders. However, soaring content volumes and growing profile complexities on the one hand, and increasing transcoder densities and falling transcoding costs on the other, are shifting economics in favor of just-in-time-transcoding (JITT). This is particularly true of network DVR deployments where operators are required to maintain one copy of recorded content per user.

In a new Frost & Sullivan white paper, we take a comprehensive look at the CAPEX and OPEX economics of JITT deployment as compared to JITP deployment. Data shows that when considering a steady audience with consistent consumption of time-shifted linear content, the five-year total cost of ownership (TCO) of JITP infrastructure is nearly twice that of the JITT alternative.

Screen Shot 2015-04-08 at 8.42.34 PMThis is due to the fact that the CAPEX for JITT transcoders and the reduced storage that they enable is 30% lower than the JITP alternative. In addition, we see 40% annual savings in OPEX in the JITT scenario as compared to JITP. This is also because volume consumption in this use case is predictable, and therefore capacity can be carefully planned to optimize utilization.

The paper also provides details on the total cost of ownership, CAPEX Considerations, types of transcoding workflows, sources of savings and other industry trends. You can download the paper for free here.