Cisco announced that it been working on a next-generation open source video codec, called Thor, that should sidestep all patent issues that current codecs such as the HEVC have presently.
Cisco complained that the HEVC patent issues have become a much bigger problem than they ever were for h.264 (for which Cisco has also released an open source implementation that Mozilla is currently using).
Right now, there are two patent pools, when there was only one for h.264, and it costs up to 16x more to license HEVC than it did for h.264. HEVC also doesn't have an upper limit on yearly licensing costs like h.264 did, which can make the use of HEVC exponentially more expensive than h.264 ever was.
To make things worse, many patent holders aren't even included in those pools, so there's the potential for lawsuits even when a company pays the royalties to the two existing patent pools.
There are other problems, such as not being able to use HEVC in any open source project, such as Mozilla's Firefox, or in freemium programs such as WebEx or Cisco Spark, which have free versions.
Mozilla has been working on its own next-generation video codec that's also open source and is meant to be royalty-free, called Daala. The company has already submitted it to the IETF, which is working on standardizing the next-generation video codec, called "NETVC," the same way it did with Opus, the current standard audio codec on the Web.
Cisco has submitted its codec to the IETF as well, so now either the two codecs will end up competing to become the standardized NETVC codec, or the IETF will pick the best pieces of both to create something new.
The goal here is not just to create a more efficient and higher-quality video codec than HEVC, but also one that won't have any patent issues in the future and can be freely used by anyone on the open Web or in hardware without worrying about lawsuits.
Right now, the only codec that comes close to this ideal is Google's open source VP9, but even Google had to pay MPEG-LA to relinquish any kind of patent infringement threats they were thinking of making against hardware or software makers that used the previous-generation VP8 codec.
Cisco has also put a team of lawyers and consultants in this area to ensure the new codec isn't infringing on any existing patents. The company has released the open source code at http://thor-codec.org, where it hopes others will come and contribute.
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"HEVC Advance wants 0.5% of content owners attributable gross revenue for each HEVC Video type. To put in perspective how unjust and unfair their licensing terms are, they want 0.5% of Netflix, Apple, Facebook, Amazon and every other content owner/distributor’s revenue, as it pertains to HEVC usage. Considering that most content owners and distributors plan to convert all of their videos over time to use the new High Efficiency Video Coding compression standard, companies like Facebook, Netflix and others would have to pay over $100M a year in licensing payments."
To be fair Zuckerberg could probably POOP $100M. But even so the price is too high. Maybe instead of .5, .05? It would save these companies a lot of money in terms of bandwidth, which may offset a more reasonable licensing structure.