HEVC Advance Patent Pool Has Multitier Royalties, Higher Pricing
Building HEVC’s 10-bit HEVC profile into smartphones, tablets and other mobile devices will incur an 80-cents-per-unit royalty, while shipping “other devices,” such as a Blu-ray player, set-top box or videogame console with HEVC Main 10 will cost $1.10 per unit,…
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HEVC Advance’s pricing sheet said. Cents-off hardware discounts prevail for using less-robust HEVC profiles, while additional charges accrue for using HEVC format extensions from the patent pool. Video content providers will be called on to foot the royalty bill -- 0.5 percent of “attributable revenues” -- for streaming or broadcasting HEVC content. Royalties will be about half for devices shipped to outside the U.S. and EU and some industrialized Middle East and Asia-Pacific countries than to those nations. HEVC Advance will offer hardware licensees no yearly cap or royalty-free allowance, newly named CEO Pete Moller told us Monday. He acknowledged the HEVC Advance royalty rate structure is much more expensive than MPEG LA’s, but “we frankly believe that we got it right,” said Moller, former executive vice president at GE Licensing. “Ours balances the rights of patent owners and essentially patent users. We don’t think the MPEG LA pricing structure, frankly, is as optimal for that balance between users and owners.” MPEG LA representatives didn’t comment. Its patent portfolio numbers some 850 patents, said a patent list posted this month to the MPEG LA website that shows Samsung as holding roughly 53 percent. The five founding members of HEVC Advance -- Dolby Labs, General Electric, Mitsubishi Philips and Technicolor -- expect to launch later this year with more than 500 patents worldwide, “and that number will increase substantially as time goes on and more and more patents are deemed essential,” Moller said. He also expects additional licensors to join the pool.