There’s been a big hoopla about what the next worldwide video codec is going to be, and Apple has bet the farm on the H.264 video codec.  Which video codec will win out? Why does that matter?  I believe it boils down to money.

Define Codec

First of all, lets define codec = [ A codec is a device or computer program capable of encoding and/or decoding a digital data stream or signal. ]  When making a video, the content is encoded using certain algorithms to compress the file down to a reasonable size while hopefully retaining the best quality possible. The opposite happens when you want to play the video, it is then decoded– co  dec  = encode / decode.

To Make a Codec

The codec is first designed and financed by some, one, or many, and then sets out to become the next worldwide standard.  Once the video codec is accepted as “the standard”, the group that is responsible for it,  then Patent’s it.  After the patent is complete, they can charge license or royalty fees to recoup their cost in making it. $$

To Make a Buck

The current worldwide standard video codec, the H.264 codec, is currently licensed by the MPEG-LA, a Denver-based firm that licenses patent pools.  Microsoft and Apple are among the many members of the MPEG-LA. The MPEG-LA charges royalties to companies that make products which encode and/or decode using their codec. The firm also charges royalties to companies which sell content that was encoded using their patents — the person who sells the encoder and the person who sells the content are the ones who have to pay.  For example, if Mozilla Firefox were to ship an H.264 decoder with their web browser, they would have to pay approximately $5 million a year. [4] Imagine what YouTube (Google) and Adobe have to pay in royalties.

To Save a Buck

Google recently purchased a video codec software company called On2 Technologies for $124.6 million.  Not long after Google’s purchase they gave the software to the world–making it open source–free. [5] Immediately they announced their switch to using the new codec to encode all of their video’s on YouTube, as well as a new web video project called webM. The webM projects goal is to provide a royalty free video codec for use on the Internet.  Adobe immediately embraced Google’s new codec and are incorporating it into their video products–including Flash. [6]

Gee. I wonder how long Apple knew about this before it became public knowledge? Just before Google’s move became public knowledge, Steve Jobs made several attempts to stamp out his foes.

Empire Strikes Back

As soon as Google offered up the new codec, the MPEG-LA announced their intent to include it into their “Patent Pool”. This might mean that the new codec, offered to the world freely by Google, will possibly require royalties. [7] Who would the royalties be paid to?  The MPEG-LA, of course.

The Vision

Google, as well as the rest of the world’s consumers, would like to have an open, royalty free codec to incorporate into the newly revised HTML standard–otherwise known as HTML-5.  The new standard in HTML, HTML-5′s goal is to allow web developers to directly embed video in a website using the new <video> tag. Without royalties, companies, including Mozilla Firefox, Microsoft, Apple, Adobe, and versions of Linux would be  able to include a standard video codec into their software. This would free up the Internet by creating a universally standard video codec, and allow development to explode.

Why shouldn’t the Operating System be a given for any computer architecture? I suggest that we should only have to pay for new computer hardware and some utility applications–not the Operating System. Since the idea of Open Source has been thoroughly proven and tested with software like Fedora, Ubuntu, OpenSuse, Open Office, MySQL, PostgreSQL, etc., future generations may see a day when Operating Systems are provided without cost. If you think about it, Google is using our search patterns as a marketing tool, as well as placing advertisements in well thought out schemes. Microsoft is now joining the scheme too.

How do you like the fact that your software tracks your habbits, what sites you’ve been to, what searches you’ve made, what hardware you’ve installed, etc…Now if I can track your search patterns, and I have a monopoly over the search results, I can provide the results (with advertisements) as I see fit. I won’t go into all of the problems with this, for example heavily biased, possibly unreliable search data. But since Microsoft and Google are tracking this type of data anyway, they can use the profits from this alone to fund their software enterprises. Google has proven it already.

If you want to reduce the cost of technology upgrades, just make all Operating Systems free.

If all Operating Systems were free, which one would you choose?