Re:Microsoft backs H.264.
by ZeroGravitas on Wednesday February 02, 2011 @11:19AM
(#2170763)
Are you saying that last year, you could have predicted the licence fee cap would have been $6.5 million and not 5.5 or 7.5 or 10.5? If you couldn't then it was unknown until they announced it. Similarly, what do you predict it will be in 5 years and each of the next 20 years till the patents run out? Are you sure?
No, I'm agreeing that you're right that the cap is effectively unknown. I missed that footnote (shame on me). My point is that even with an unknown cap, the license rates are predictable for the foreseeable future:
Free under 100k units
$0.20 per unit above 100k
$0.10 per unit above 5 million units
I'm glad Google open sourced the on2 codec and I can even see that maybe the H.264 prices have been influenced by that move. But from a practical standpoint, I think Apple and Microsoft are making a reasonable move. People say it's short-sighted, but I think they are relatively protected.
The maximum annual royalty (“cap”) for an Enterprise (commonly controlled Legal Entities) is $3.5 million per year 2005-2006, $4.25 million per year 2007-08, $5 million per year 2009-10, and $6.5 million per year in 2011-15.
…and you're right that there is a footnote saying. "Annual royalty caps are not subject to the 10% limitation" which is important.
I do find it a bit strange to hear people say the license fees are unknown. Even if you assume an unlimited cap, you can schedule out what the pro-rated fees will look like for you for the next 5-10 years based on your projected growth. You can argue that they are too high, but I don't think you can argue that they are unknown. If nothing else they are bounded on the high end.