Codec licensing

Been studying a little bit the codec market and how it the whole thing hangs together. There are clearly folks who are doing open source development that doesn’t involve licensing. The two that strike me right away are “Lame”: and “Vorbis”:
I’m wondering what the other ones are. Here are some links based on a quick google search:
* Thomson IP Licensing overview. Buried in this general presentation on licensing or some words about MP3 and MP3Pro licensing.
* “MP3 Licensing Background”: _A good summary of how we got MP3._ In 1996, U.S. Patent no. 5,579,430 was granted to Fraunhofer
Gesellschaft in Munich for a “digital encoding process for transmitting and storing acoustical signals and, in particular, music signals.” (Fraunhofer Gesellschaft is the parent company of the Fraunhofer Institute for Integrated Circuits, creator of the core technologies incorporated in the MP3 standard.) One of 18 MP3-related patents held by raunhofer and patent partner Thomson, this is the basis of their current claim to a “fair share” of MP3 revenues. However, Thomson did not assert its claim until the fall of 1998.
* “Fraunhofer IIS”: All their licensing terms. Boy, they hold lots of patents on MP3, MPEG4, MPEG2. How do they get these things standardized and minting money. Pretty interesting.
* “MP3 Royalty Rates”: Nice to have all your royalty rates just published on the Internet. Says the list prices are $0.75/decoder for MP3 and $1.25/decoeer for MP3Pro.l True for whether it is hardware or software. 2% for MP3 streaming of revenue and 3% for MP3 Pro.
* “VIA Licensing”: A Dolby Laboratories subsidiary doing all kinds of licensing. Dolby is another good analog to this kind of codec licensing. Make something standard then charge for it. THX is the same. Their big license is for “MPEG2 AAC”: used in XM and in Japan. Their sliding scale is $0.45 to $0.10/decoder with $0.25 being the middle range.
* “MPEG4 Visual”: Yet another licensing group. They have a good “overview”: on what they are doing, but basically rather than per device, they want a cut of revenue. But for devices, it is about $0.25/device and only for big guys with a $1M minimum commit that buys you 50K devices

4 responses to “Codec licensing”

  1. Rich Tong Avatar

    Great questions, Gary and John, since I’ve been playing with this a while the origins have been kind of lost. Essentially DivX was originally a hacked MPEG4 driver with MP3 stream support. But now as DiVX 4 as well as DivX 5, it is a variant of MPEG4 codecs that have their own commercial licensing. So, DivX started as a kind of freeware thing and has now gone commercial at See below for the FAQ…
    DiVX History. The DivX codec is based on MPEG-4 video compression standard, designed primarily for video transfer over low to mid bandwidth networks (eg. Internet, WAP …).
    There are in fact 2 major codecs, both name the “DivX codec”. But the newer one, which used to be part of the open-sourced project at Project Mayo (now under a licensing scheme), is more commongly referred to as “DivX For Windows/Linux/Mac …”, whereas the orginal codec is sometimes referred to as the “DivX 😉 Codec”. The version number of these 2 major codecs are also different – the original being 3.xx, while the new ProjectMayo codec has a version number of 4.xx.
    Most older/existing movies are encoded with “DivX 😉 Codec”, since the new ProjectMayo DivX codec was still being developed.
    The original DivX 3.xx codec is based on Microsoft’s MPEG-4 V3 codec (ASF was based on MPEG-4 V2). The reason why the codec was “hacked” and re-distributed is because Microsoft’s codec did not allow one to encode to AVI (they only wanted people to encode to ASF/WMV), which is far from being convenient. The DivX 3.xx codec also includes hacked versions of a MP3 codec and a WMA codec. The AnglePotion, MPEG-4 and SMR codecs are all in the same boat. There is also a VKI (Scene Detect) patch that will insert keyframes at scene changes for you automatically, which will improve picture quality.
    The new DivX 4.x codec has nothing to do with Microsoft – it has been developed entirely from scratch, and is still under development (hence less then perfect compatibility/efficiency/quality). In time, the DivX 4.xx codec will completely replace the 3.xx codec, but for now, the 3.xx codec offers better compatibility/efficiency/quality. The 4.xx codec is not compatible with the 3.xx codec, and vice versa.

  2. Gary Burd Avatar

    What’s the difference between MPEG4 and DivX? I could only find this when I looked for an answer:
    “The DivX? codec is a patent-pending, MPEG-4 based video compression technology”

  3. john ludwig Avatar

    i just read an article somewhere — pcmag print edition? wsj? — that talked about the demise of mpeg4 and how all the video encoding is moving to divx. if i find the article again i’ll get it to you

  4. Gary Burd Avatar

    If a recent product announcement has you thinking about VOIP, then you should check out SPEEX .

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