‘Glaring Differential’ in License Costs of MPEG-H vs. Dolby AC-4 for ATSC 3.0 Audio, Says Sinclair’s Aitken

There “certainly” also are “commercial business aspects that are exceptionally conducive, we believe, in the MPEG licensing that’s been put forward” to sway Sinclair to support MPEG-H over Dolby AC-4 for ATSC 3.0, Aitken said. “There are many questions in my mind about the future licensing aspects” of Dolby AC-4, “so those have played into that consideration” to endorse MPEG-H as well, he said.

Many broadcasters “share a common interest in ensuring that there’s a vibrant ecosystem, and suffice it to say that we believe that the terms that have been offered by this new licensing alliance is conducive to that,” Aitken said of the MPEG-H licensing regime. “If you simply looked at it from a cost perspective, there is a clear perspective that the MPEG-H approach is more conducive to ensuring that there’s a vibrant ecosystem,” Aitken said. “In large consumer numbers, there is a glaring differential between MPEG-H and Dolby in terms of straight-up costs.”

Aitken declined to say what Dolby is charging for the AC-4 license, citing Dolby confidentiality agreements. Dolby Labs also wouldn’t disclose its AC-4 licensing terms, but believes AC-4 “is backed by decades of experience delivering broadcast solutions to over 100 countries,” Giles Baker, senior vice president-Dolby Broadcast Group, emailed us Friday. The cost of licensing AC-4 “is comparable to what has been disclosed by the MPEG Audio Alliance,” Baker said. MPEG-H “accounts for an unknown fraction of the patent holders for that technology,” he said. “We have never charged content fees for our licensed technology,” and won't do so for AC-4, he said. “We are pricing a full technology package that is comprehensive and fully backed by Dolby."

The royalty for suppliers of MPEG-H hardware and software “starts at an introductory price” of 99 cents a unit, emailed Laura Moriarty, a spokeswoman for Technicolor, which is running the MPEG-H licensing program. “We also have volume discounts,” Moriarty said, without saying what those discounts are. Like Dolby AC-4, MPEG-H has said it won’t charge content fees for its technology. As for Baker’s remark that MPEG-H audio accounts for only an “unknown fraction” of the technology’s available patents, compared with Dolby’s full package of AC-4 patents, Claude Gagnon, Technicolor senior vice president-content solutions and industry relations, emailed us Monday that MPEG-H audio for ATSC 3.0 "uses a limited but powerful subset of the MPEG-H standard." By focusing the system "on the decoding tools in the standard that are appropriate for TV broadcasting, we're able to deliver our system with low licensing costs," Gagnon said. "Low licensing costs are one reason MPEG-based systems have been used to deliver half the world's surround sound for TV today."

On MPEG-H’s attributes as an open standard, “you have a very focused community, a very large community, that’s looking at the evolution of the standard, with a constant eye on maintaining compatibility, while developing and leveraging new tools to prove that standard,” as what has happened in the history of MPEG-2, Aitken said. Looking at MPEG-2 from a broadcaster’s perspective, “the compression efficiencies that have been squeezed out of MPEG-2 video are fairly astounding,” he said. Twenty years ago, 20 Mbps “did not even get you decent 1080i, and today, MPEG-2 compression is supporting multiple 1080 video streams,” he said.

Another factor weighing in MPEG-H’s favor is that it’s part of “a larger set of MPEG standards that are designed in unison to interoperate within a larger system environment,” Aitken said. MPEG-H is one of “a number of components” from the MPEG family that are moving through the ATSC 3.0 process “that I would say have been designed in parallel with the object of interoperability, and why wouldn’t you take the opportunity to leverage that larger set in the context of a new standard” in ATSC 3.0, “which at its core has been designed to be evolvable?”

In light of Sinclair’s endorsement of MPEG-H, Aitken doesn’t worry that ATSC 3.0 might pick Dolby AC-4 as the winning audio codec, he said. That’s because there are “sufficient mechanisms in place to allow the market to prevail,” he said. The “evolvability of the core elements” is at the heart of the ATSC 3.0 process, he said. “You can end up down the road, two days, two years -- pick your time frame -- and elect to do something different, and have assurance that you have the flexibility to implement it.”

ATSC 3.0 “is designed to be a global standard, and there have been global markets that have spoken out” in support of MPEG-H, Aitken said. Though ATSC “has not yet made its decision” on an ATSC 3.0 audio codec, “we’re bullish on MPEG-H, but should there be an unfortunate event that does not align with our current outlook, we see other ways to assure market success of the standard,” he said.