The Future of H.264
With the underlying Apple/Adobe disputes highlighting the debate between open source and proprietary systems advocates, the announcement that H.264 will be royalty-free until late 2016 is seemingly reassuring.
After all, one of the big appeals of open source solutions is that "they're free" — but if a proprietary system is also available for free, that distinct competitive advantage fades — a situation which the backers of H.264, MPEG-LA, seem to hope will help level the playing field against competitive formats. While its offer of limited time, no-royalty licensing may provide a means of accelerating the spread of the technology, not all tech observers see the move as a good thing for designers and developers.
According to Webmonkey's Scott Gilbertson, once the royalties take effect in 2016, "MPEG-LA could charge you whatever it wants — even an Austin Powers-style one million dollars per second of video."
"MPEG-LA's latest move seems ripped straight from a crack dealer's marketing guide — 'Here kid, the first hit's free,'" wrote Gilbertson. "Then, once the web is even more heavily invested in H.264 than it is now, MPEG-LA can set its royalty fees at whatever rate it wants, sit back and reap the profits."
The situation is fueled by lack of agreement amongst the major players, including browser makers, as to a standardized means of video display. While Flash is popular and able to decode H.264, it is facing a challenge from HTML5 as well as other technologies and its widespread longevity is by no means assured.
The issue of licensing fees for the H.264 software decoder is also reportedly one of the stumbling blocks to the format's adoption by Mozilla and Opera, among many others, as even an application such as a Firefox add-on that supports H.264 reportedly requires payment of licensing fees of $50,000, in addition to royalties.
While royalties and licensing fees are not the only issues to consider when choosing a video format — and indeed, other formats may come and go before the end of 2016 — your long term approach to delivery mechanism stability begins with the companies you choose to do business with as much as with their technologies — and that includes the terms under which you'll be required to play the game.