Apple backs MPEG-4 despite fee dispute

The computer maker took the unusual step of releasing the software in absence of a final licensing agreement with MPEG LA, a licensing body representing 18 patent holders that have claims on underlying MPEG-4 technology, a next-generation compression format for video and audio.

"The licensing stuff is getting worked out," Apple CEO Steve Jobs said in an interview Tuesday. Every 'i' is not dotted and every 't' is not crossed, but it's getting there. I have a lot of confidence it will. This is too important not to get worked out."

Jobs said he believed the MPEG-4 licensing issues "will be worked out" by the time QuickTime 6 is officially released later this summer.

Jobs emphasized that MPEG-4 would be vital to more broadly opening up streaming of audio or video on the Web and giving consumers more choice. Right now, much of the streaming is tied to proprietary codecs used by Apple, RealNetworks or Microsoft.

"MPEG-2 still delivers the best video quality around," Jobs said. "It is the gold standard. It is the world standard...The same group that created MPEG-2, created MPEG-4, which is the next, new international standard for digital video, for streaming, and for other uses. It delivers video quality as good as MPEG-2 at about a third less the bit rate."

MPEG LA confirmed that a final license had yet to be hammered out and said the QuickTime release indicated faith on Apple's part that the licensing terms would be acceptable.

"We don't have any new information on the licensing, and we hope that we'll have final terms sometime this summer," said Larry Horn, vice president of licensing and business development for MPEG LA. "That being said, Apple's announcement shows great confidence that a reasonable license from all the various patent holders will be available."

MPEG-4 is the successor to the technologies that spawned the MP3 audio explosion. Like most current media formats, its audio and video technologies aim to condense large digital packages into small files that can be easily transmitted online. But the hype around the technology focuses on its potential to give video itself the kind of interactivity now found only in Web sites and video games.

Hoping to bank on this interest for patent holders, MPEG-4 in January proposed imposing a per-minute charge on streaming, a requirement that Apple and other potential MPEG-4 adopters consider too costly. Apple unveiled the new version of its streaming media software featuring MPEG-4 technology in February, but it delayed the version's release because of the licensing dispute. RealNetworks also has raised concerned about the licensing plan.

The proposed terms include a one-year grace period from the time the program starts and covers uses before the launch of the license. Industry sources said they expected the final licensing agreement to mirror those terms.

Under pressure
One prominent MPEG-4 figure noted that MPEG LA is under pressure to offer competitive licensing terms, and that pressure may have helped reassure Apple that it could release the QuickTime software before the final license.

"MPEG LA has been talking to many potential licensees, and they're taking comments from the market very seriously," said Rob Koenen, chairman of the MPEG Requirements Group. "They're looking at this as a product that they have to sell, and the price has to be right."

Apple plans to release QuickTime 6 with Jaguar, the next version of Mac OS X, in late summer. QuickTime 6 would be the first Mac OS X media player to support MPEG-4.

Currently, only Apple and Microsoft offer Mac OS X media players. But Microsoft's media player only works as a standalone or with the Internet Explorer 5.1 browser. Windows Media Player for Mac OS X is not compatible with rival browsers such as AOL Time Warner's Netscape 6.

RealNetworks has committed to releasing a Mac OS X version of its media player, but it has yet to do so.

"The ISMA (Internet Streaming Media Alliance) is pleased that industry support for MPEG-4 remains strong, as is evidenced by Apple's latest announcement," said ISMA President Tom Jacobs. "The ISMA membership continues to work toward interoperable approaches for transporting and viewing rich media, and we believe that MPEG-4 is a superb content choice. We look forward to MPEG-LA soon publishing final licensing terms, and the ISMA has high expectations that amenable terms for all will be reached."

Tuesday's release of the QuickTime 6 beta could be viewed as a pre-emptive strike against Microsoft, which is expected this summer to offer a test version of its next-generation digital media client and server software, code-named Corona. Microsoft has not yet committed to supporting MPEG-4, working instead on its own proprietary codecs and streaming technologies.

More importantly, Microsoft does not plan to initially offer a Corona player for the Mac when the technology debuts later this year.

"We'll focus on other platforms like the Mac primarily to ensure Windows Media content playback," said Jonathan Usher, director of the Windows Digital Media Division at Microsoft. "There will not be a separate Corona player in that time frame."

Usher said he "can't comment" about whether Microsoft would release a Corona player for the Mac. "Our focus right now for the Corona time frame is Windows XP and other versions of Windows."

News.com's Paul Festa contributed to this report.