Firm boosts H.264 streaming license fees from $100k up to staggering $4.5M

https://www.tomshardware.com/service-providers/streaming/h264-streaming-license-fees-jump-from-100000-to-4-5-million

by MaximilianEmel • 4 months ago

195 75 4 months ago

what are the open source alternatives?

charcircuit3• 4 months ago

This is for patent licensing. Using an open source implementation doesn't get rid of your obligation to license the patents for it.

adrian_b8• 4 months ago

In most countries the H.264 patents have already expired, for instance in Europe they have expired, but in USA not yet (in USA most patents should expire towards the end of next year).

So that firm might try to squeeze every penny they can before the expiration of the patents.

kmeisthax2• 4 months ago

AV1, as well as the older On2 codec series it was based off of (VP9, VP8, etc).

topranks• 4 months ago

VP9, AV1

chromacity• 4 months ago

As the article says, there are companies seeking royalties for both of these codecs.

adrian_b8• 4 months ago

In most countries, including in Europe, the H.264 patents have already expired. There you can use H.264 freely.

Some patents remain valid in USA, Brazil and a few other countries.

cocodill• 4 months ago

OpenH264, and Cisco already paid the fees for you, I guess.

bytecode362• 4 months ago

Just because AOM/Google says that wont charge a royalty doesn't mean AV1 isn't covered by patents owned by others. Since everyone and their brother saw how they can milk the patent system for money, they got patents that cover all "next-gen" video technologies (AV1, HEVC, VCC) a long time ago and will sue anyone that uses them. Ironically, since there are so many patent holders, each of which want a larger piece of the "licensing pie", it's making the new video technologies impossible to license. You may license HEVC or AV1 from one patent pool, but the other two and hundreds of other individual patent holders could also sue you. This is why many brands like Synology, Dell and HP have just started to simply remove these codecs from their products. I wouldn't treat any video codec as "patent free" until AT LEAST 20 years after the spec was release (AV1 = March 2038). This kind of infighting will guarantee that HEVC or AV1 will never become a ubiquitous standard for at least 20 years the way AVC/h.264 did.

I, for one, am happy about this. Nothing makes me happier than to see patent trolls eat themselves alive. Also, being an open source advocate, I appreciate when propriety technologies that are "good enough" can finally be used by open source applications with broad support. Unless you are pushing a ton of video, or working with high resolution (4K, 8K)/ high bit-rate videos, AVC/h.264 is perfectly fine.

hollow-moe• 4 months ago

Aren't VP9 and AV1 supposed to be "royalty free formats" ?

adrian_b8• 4 months ago

They have been created with the express purpose of avoiding incidents like this.

Instead of paying the ransom, a streaming company should transcode their movies to a royalty-free format, like AV1 or VP9.

Even big companies like Dell have preferred to disable the H.265 codecs in the computers they sell, instead of accepting similar demands for greatly increased royalties, and I think that it was the right choice.

watermelon0• 4 months ago

They are supposed to be, but Disney doesn't think so: https://arstechnica.com/gadgets/2026/03/av1s-open-royalty-fr...

Also, let's not forget that the majority of devices still don't have AV1 hardware decoding support. For example, Apple only recently (2023) added support with iPhone 15 Pro and M3 Macs.

adrian_b8• 4 months ago

The claims made by Dolby that some H.265 patent claims that are formulated very vaguely also apply to AV1 are probably bogus.

Like many other such frivolous patent lawsuits, Dolby hopes to either scare the other company into making a deal in order to avoid bigger legal expenses, or to establish a legal precedent if their cunning lawyers can convince a technically incompetent jury that the H.265 patents are applicable to AV1.

This is the kind of trial that should have never been decided by a normal jury, but only by a panel of neutral experts in this field.

mananaysiempre• 4 months ago

For example, Apple only recently (2023) added support [for AV1].

Apple has been actively obstructing open video formats for a long long time—Apple is the reason there isn’t a baseline format for <video> in the HTML5 spec, for instance. (Or at least there wasn’t when the spec was still a well-defined document with a version number; I see no merit in keeping track of the “living” one.) Incidentally, Apple is a member of MPEG-LA and claims to hold numerous patents covering both AVC and HEVC.

At this point, whatever harms befall Apple’s users due to lack of Apple’s lack of format support are entirely Apple’s fault.

Havoc• 4 months ago

hardware decoding support.

As a side note this isn't always superior - recently discovered my desktop uses way more power with hardware decode than software. Counterintuitive but issue isn't per pixel efficiency but that it keeps the GPU in a higher power state

mrweasel• 4 months ago

That's just trying to promote a competitor. This is more or less what Fraunhofer did with the mp3 license, which resulted in bunch of new, and better formats.

kmeisthax2• 4 months ago

This seems particularly desperate, but I'm not surprised this is happening, given that patent owners in general have been very angry that H.264 didn't wind up being nearly as lucrative as MPEG-2 was. Hell, I remember the days when they couldn't even agree if H.264 should have a free streaming tier at all or not - and it seems like that went away.

Maybe Google should finally make good on their threat to only stream YouTube in royalty-free standards.

falkensmaize• 4 months ago

I guess to me this doesn't seem like that big of a deal? I mean if you have a 100 million subscribers, do you really care much about a few $million increase? I thought the big players like Youtube had already moved to open source codecs already anyway.

charcircuit3• 4 months ago

few $million increase?

Existing licensees are grandfathered in to the old price.

VladVladikoff• 4 months ago

I’m confused about this. If I have video on my website that is encoded in x264 am I obligated to pay fees?

adrian_b8• 4 months ago

Not if you are in Europe or in any other place where the H.264 patents have expired.

The patents are still valid in USA, Brazil and a few other places.

silotis• 4 months ago

*Claimed to still be valid.

If you're just hosting videos on your website you are probably using High Profile which was standardized in March of 2005, i.e. more than 20 years ago. That doesn't stop VIA and MPEG-LA from claiming they still have relevant patents, but that claim is dubious and hasn't been tested in court.

panny• 4 months ago

How are these software patents still valid after Alice Corp. v. CLS Bank International precedent? Or is this a case where companies just pay the fee because it's cheaper than fighting it in court?

charcircuit3• 4 months ago

Only if it is used commercially. If it is a free video you do not have to pay fees.

jauntywundrkind• 4 months ago

They should be sued. It's incredible discriminatory to make it so ridiculously hard for new players to complete.

Hopefully the Licensing Alliance never ever ever gets another customer ever again. Hopefully no one uses any of their new encodings. This is an untrustworthy company, that always have been out to fleece the industry and hold back humanity. Licensing Alliance embodies Lawful Evil, is a stain on the patent system as a whole. It's hard to find the words for how awful, how enraging this cabal is. Ugh. What an evil drain.

We should be able to use computers for audio and video, and it shouldnt involve kings ransoms to some jerks who are better at paperwork & lawyering.

All that work on av1 and av2 looking more and more civilization ally essential as times goes on.

ronsor• 4 months ago

My advice (not a lawyer) is to ignore the licensing fees; the patents will all be dead by 2027 anyway.

Also I'm not responsible for whatever happens if you do this.

Noaidi2• 4 months ago

So should I re-encode all my videos to OGG? I’m really confused what this means for the average person who has home videos encoded in these formats.

embedding-shape• 4 months ago

Unless you're running a platform with millions of users, where you use the codec to encode/decode video for others, you have absolutely nothing to worry about due to these news.

Noaidi2• 4 months ago

Thank you!

nuxi• 4 months ago

Note that OGG is not a video codec, it's just a container format. I.e. an OGG file can contain MPEG-4/H.264-encoded video.

KronisLV• 4 months ago

That's an insane amount.

That makes me feel even more strongly about throwing proprietary and predatory codecs in the trash and opting to use AV1 et al wherever possible, it's better anyways and surely close to a decade after coming out, we'd expect devices to support it well enough.

Figs• 4 months ago

it's better anyways and surely close to a decade after coming out, we'd expect devices to support it well enough.

A lot of people, myself included, are still using quite old hardware. The GPU in my daily driver is ~10 years old at this point. Between crypto, COVID, and this AI craze raising GPU costs by insane amounts, it hasn't made sense to replace it with something newer. I know I'm not alone on that...

craftkiller• 4 months ago

For legacy devices, VP8/VP9 is a good option. Intel Added VP8 hardware decoding to Broadwell which was 12 years ago. Nvidia had hardware VP9 decoding 10 years ago on the Geforce 10 series. AMD had hardware VP9 decode support 9 years ago on the Radeon 400 series.

jurschreuder• 4 months ago

I work in AI and I'm surrounded by RTX-4090 and H100 servers but for much of the day to day AI training I use my RTX-970 in the desktop on my desk for convenience and it works just fine for most cases.

Literally 2 meters from my desk is a 2x RTX-4090 server and many times I just use my 8 year old GPU anyway so you don't need it.

nine_k2• 4 months ago

Insane in absolute terms, but not per user. Take look at the actual fee schedule [1]. The most costly is the license for cable TV, which costs 50¢ per year per subscriber. The least costly is social media, which goes up to whopping 4.5¢ per MAU per user.

I very much understand how the licensing alliance likely was bothered by the fact that they are leaving money on the table, when TikTok's revenue per user is $50 a year, and a cable subscription is easily $800 per year, with the high-end reaching $2000. The big players aren't going to notice much. For the small players, nothing changed.

[1] https://cdn.mos.cms.futurecdn.net/3wzYaofEETCfXdQmREx9BK-120...

adriand• 4 months ago

Is it insane at all? The biggest fees are charged to the biggest providers. With short form video now the dominant form of addictive social media content, it doesn’t seem insane at all that large media companies ought to compensate inventors/owners of patented video technology. A company with 100 million or more subscribers is not a company I feel a lot of empathy for if they’re trying to avoid paying licensing fees.

PokestarFan• 4 months ago

I think the dumb part is that it's not like decoding or encoding video becomes harder when there's more users. The effort to write code for encoding for a small service of 1000 users and a large service of 10 million users is the exact same. We really don't need middlemen extracting everything they can, which will drive up costs.

dmitrygr• 4 months ago

AV1 might not be as patent-free as we had hoped: https://arstechnica.com/gadgets/2026/03/av1s-open-royalty-fr...

xiphmont• 4 months ago

It's more another example of 'you can sue for anything on a whim'.

Veliladon• 4 months ago

The problem is that open codecs can still be encumbered by patents and the holders will sue. VP9 and AV1 have their own patent pool for that very reason. Google may have open sourced its codecs but if they don’t indemnify users people who think they’re safe might be in for a bad time.

m-p-3• 4 months ago

Looks like that isn't stopping Dolby.

https://www.techspot.com/news/111865-dolby-sues-snap-over-vi...

bytecode362• 4 months ago

100%. Just because AOM/Google says that wont charge a royalty doesn't mean AV1 isn't covered by patents owned by others. Since everyone and their brother saw how they can milk the patent system for money, they got patents that cover all "next-gen" video technologies (AV1, HEVC, VCC) a long time ago and will sue anyone that uses them. Ironically, since there are so many patent holders, each of which want a larger piece of the "licensing pie", it's making the new video technologies impossible to license. You may license HEVC or AV1 from one patent pool, but the other two and hundreds of other individual patent holders could also sue you. This is why many brands like Synology, Dell and HP have just started to simply remove these codecs from their products. I wouldn't treat any video codec as "patent free" until AT LEAST 20 years after the spec was release (AV1 = March 2038). This kind of infighting will guarantee that HEVC or AV1 will never become a ubiquitous standard for at least 20 years the way AVC/h.264 did.

I, for one, am happy about this. Nothing makes me happier than to see patent trolls eat themselves alive. Also, being an open source advocate, I appreciate when propriety technologies that are "good enough" can finally be used by open source applications. Unless you are pushing a ton of video, or working with high resolution (4K, 8K)/ high bit-rate videos, AVC/h.264 is perfectly fine.

thisislife2• 4 months ago

AV1 may also have patent issues - AV1’s open, royalty-free promise in question as Dolby sues Snapchat over codec - https://arstechnica.com/gadgets/2026/03/av1s-open-royalty-fr...

jordand• 4 months ago

There's sadly loads of older Apple and Android devices out there holding back AV1 adoption for years to come. Hardware AV1 decoding only just arrived in the Apple M3+ and A17 Pro onwards, and software decoding has its own big trade offs regardless of the OS.

dabinat• 4 months ago

The big problem is that Apple disables AV1 support in Safari on devices that do not have hardware decoders, even if those devices are powerful enough to decode in software. I can understand it for a phone, but it seems unreasonable for an M2 Ultra Mac Studio.

cs702• 4 months ago

Profit-seeking at society's expense.

Also known as rent-seeking: "The act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth. Rent-seeking activities have negative effects on the rest of society. They result in reduced economic efficiency through misallocation of resources, stifled competition, reduced wealth creation, lost government revenue, heightened income inequality, heightened debt levels, risk of growing corruption and cronyism, decreased public trust in institutions, and potential national decline."[a]

Sigh.

---

[a] https://en.wikipedia.org/wiki/Rent-seeking

userbinator• 4 months ago

Trying to milk the last drop before the patents expire? H.264 patents have already expired in most of the world and the remaining ones, which might not even be necessary for the vast majority of H.264 use, are also approaching expiry very soon:

https://meta.wikimedia.org/wiki/Have_the_patents_for_H.264_M...

donatj• 4 months ago

It's interesting because this isn't that exactly the same thing Fraunhofer did with the MP3 patent?

notatoad• 4 months ago

Milk the last drop, or raise the prices so high that people transition to a more reasonably priced option with a patent that isn’t expiring soon?

fhn• 4 months ago

you mean AV1?

MaxBarraclough• 4 months ago

Seems unlikely, migrating away from an entrenched codec like H264 isn't like a routine software update. It has widespread hardware support, and there's an enormous body of H264 video out there.

As fhn points out, there are now truly open video codecs available (open specification, royalty free, unencumbered by patent terms) that are able to compete with the patent-encumbered ones on technical merit. Seems curious that the patent-holders would want to hike prices in this way and validate the motivation behind the truly open codecs.

Also, the article mentions the licensing fees for H265 were also increased recently. It doesn't seem to give a figure, a quick web search turns up 25% [0] or perhaps 20% [1]. Perhaps I'm missing something obvious but I'm not clear on how the change in price relates to the patent dispute between Nokia and certain laptop manufacturers.

(It seems the H264 fee increase affects streaming providers only, whereas the H265 fee increase did not, as it affected laptop manufacturers.)

[0] https://news.ycombinator.com/item?id=46004129

[1] https://news.ycombinator.com/item?id=46003285

ksec• 4 months ago

Trying to milk the last drop before the patents expire?

Old licenses are grandfathered in previous pricing. So this isn't about milking, but likely a tactic specifically aiming at certain companies. But I am wondering why they bother to do this at this stage of the game.

I am hoping we could further innovate on top of H.264 to have a better patent free video codec.

amelius• 4 months ago

Communication formats should not be patentable. The potential for lock in abuse is too high.

spopejoy• 4 months ago

What is the alternative? It seems like a lot (a majority?) of professional formats are professionally developed by for-profit consortia, with open-source trailing behind as patents expire. Isn't this what patents are for? If a private entity drops $$$/time/expertise into tech shouldn't they be rewarded for some period?

The alternative would be lavishly funded public research, which sounds great to me! But is that going to happen?

Firm boosts H.264 streaming license fees from $100k up to staggering $4.5M

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