Thomson Announces Royalties For MP3 Streaming

Michael Smith points to an article at techreview.com in which "we read about Thomson Multimedia announcing royalties for mp3 streaming, finally. 2% of ALL revenues related to streaming, with a $2000 minimum. A compelling reason to move to Ogg Vorbis for those who have been holding out?" RMS has been pointing out that MP3 is hampered by patents for a long time now; the proof-bearing pudding is on the way. Same Thomson that wants smart cards everywhere; the pay-for-play view of the world is at least consistent there.

Oh come on

Oh come on. We're into bizarro world here. They've priced this thing just right, but it's outta whack because one particular set of people isn't getting exactly the low price they want?

Who are these people that could pay for the bandwidth needed for streaming audio of any quality -- with banner ads? 24 concurrent connections at 64k would choke a T1 to start. These must be awesome banners! Pop-ups, that's fer sure!

And $2000 is $167 a month. I'll tell you what, there are these two guys in Brooklyn that have been streaming audio to the world for ages, cheaper than that. It's They Might Be Giants, and they've had a "dial-a-song" answering machine up for over a decade.

Now the POTS is a little noisy and a little lossy, but if your audio is SO compelling that you absolutely must STREAM it, that's the cheap way to do it. (And hey, the bandwidth is even paid for - with aggregated micropayments!)

This is a sensible licensing scheme

What if I described the scheme thusly:

Thomson developed a licensing scheme that would only charge for companies that "monetize" the codec. Users can now stream mp3 for free as long as they don't charge, and small-time users only pay $2000. Larger streaming companies, such as broadcasters, pay 2% of their revenue from streaming. Therefore, if you don't charge, you don't pay; if you make money on it, you give some back to the developers.

OK: I can now stream mp3 at will, for FREE -- unless I charge for it! But if I'm a big broadcaster, and I make $1Million from streaming, I have to pay them $20,000. Well that sounds like a damn sensible approach!

Now, the bulk of the Tech Review story is not about their licensing scheme, but Thomson's announcement that MP3Pro is going to debut next week. This codec will lead to file sizes half that of mp3 while remaining backwardly compatible - as in, MP3Pro can be played with any current mp3 player, albeit with a predictable loss in quality. In return they are asking for 50% more (free for non-monetized, $3000 minimum or 3% of revenue) to stream MP3Pro.

.OGG personal players

Does anybody know of a personal player (Like the Rio 300) that will play .ogg files?

One thing to keep in mind..

"If MP3 is used for free distribution on the Internet, we will not charge royalties," he says. But "if people monetize, the inventors should have their fair share," he adds.

So, as I read that, shoutcast servers wouldn't have problems, but if there were a pay-for-play mp3 based radio station, they want a cut. At least they're not being 100% evil...

Re:One thing to keep in mind..

It is true that they aren't making any promises, but at the same time if they have learnt from the GIF incident, whereby they inadvertendly forced everyone to use other formats, they won't try shooting themselves in the foot.

Only time will tell...

What legal basis could they possibly have??

IANAL, but I fail to see how Thomson (or anyone else) could have any legal basis for charging royalties for streaming MP3 (or MPEG audio of any form).

Certainly the encoding and decoding of MPEG audio is covered by patents, and is thus licenseable. (And obviously the content of some MPEG audio files is protected by copyright.) But once you already have encoded MPEG audio data, to stream this data requires only unencumbered, open standard protocols (TCP, or RTP (RFC2250 or RFC3119)).

It's hard to see how any restriction on the streaming of pre-encoded, non-copyrighted audio could have any legal weight. In fact, such a restriction might even be seen as a violation of free speech rights...

A brief and disjointed analysis

I read it somewhat differently.

From the anecdotes in the article, the only way to avoid paying Thomson is to eliminate all money from the picture. They want a peice of all stream-related revenue. Which is to say, that if you sell t-shirts to promote the stream, subsidize bandwidth, or equipment, or studio space, they want $2k/year (minimum), and 2% after that. This is from the revenue stream, not profit-after-expenses.

If you sell advertising, they offer a plan where you pay 3% of advertising revenue, with a $3k annual minimum. This, presumably, would also include income from any banner ads on the stream's web page.

It doesn't matter if you're making money hand over fist, or if you're just trying to gather support to keep the thing alive while working elsewhere full-time and running at a loss, just for a fun thing to do. They want a cut.

This will, should it come to pass, probably damage live365's already shaky business model to the point of complete failure.

It will mean that the low-budget streams will need to move to zero-budget, or find a source of income to cover the $2k annual minimum.

It, like so many other things, punishes the little guy. Selling a $10 hat with a inkjet-printed logo costs the seller ~$2k. I'll let the reader figure out how many $10 hats it takes annually to cover the licensing cost of the bloody ISO standard codec.

All conspiracy theories aside, I don't know that they'd be able to introduce this retroactively. I got my licensed-and-legit Fraunhoffer MP3 codec with Microsoft's Netshow. I didn't agree to pay them shit, and I'm never going to. *thumbs nose at Thomson Multimedia*

It makes sense, then, that it would only apply to the "new" MP3Pro codec.

MP3Pro, by the way, is absolutely fucking worthless - it compensates for high-frequency loss by introducing harmonic distortion and high-frequency noise. So, low-bitrate stuff sounds just as "bright" as it did before encoding. This "brightness" is entirely artificial, and entirely inaccurate with respect to the original recording.

Its only honest claim to fame, is that really-low-bitrate stuff might become tolerable (think 8-16Kbps) for voice work, and that it is backward-compatible with existing mp3 players (for the naysayers who will pop up claiming that mp3pro is god's gift to all mankind: it is this backward compatibility which requires its broken hack of a design.)

Incidentally, this works right now: Make a low-bitrate mp3 (the article says 80Kbps is good, so start there), and a high-bitrate (>224Kbps) mp3 of the same material. Grab a plugin for xmms, winamp, wmp, or whatever, that claims to boost (or "recreate" or "reproduce" or "restore") high-frequency sound. Play your low-bitrate mp3 through the plugin, for a demonstration of what MP3Pro can do. Play your high-bitrate mp3 without it, for enlightenment.

Until...

the only licensing charges for the MP3 codec will apply to people profiting from MP3 streaming, I imagine most of the slashdot community will be free to use it as they wish without paying a dime

Until you realize that what Thompson considers "profit" and what you consider "profit" are two entirely separate things.

When Thompson tried enforcing the patent licenses on encoding software, they went after quite a few free (as in beer) programmers - their logic was "You are making money from your software because you have banner ads on the download site." (this is how LAME came about.)

So I wouldn't put it past them to say "Hey, you're streaming MP3's, and you have a banner ad there - so therefore you're making a profit."

This will come to pass.. just watch and see.

Re:Shoutcast

So what does this mean for shoutcast?

Nothing. They don't charge any money.

... should make their own napster like program that doesn't have a central server

Of course, distributed live broadcasting would be best accomplished through the deployment of multicast on the Internet. Any application level solutions would be hacks comparitively.

Re:This is complete BS.

> How about during downloads? You can point ANY application that plays MP3 files (Winamp, mplayer2.exe, XMMS, etc.) to an MP3 file that has been partially downloaded by a download utility (specifically, one that puts the file in the final destination even while it's still downloading), and it'll play perfectly, up until the current end of the file, at which point you can play again, and it'll be further down because of the download.

Good point.

If I run a streaming radio station, it looks like I owe Thompson $BIGNUM bucks. Clearly, I need to stop running a streaming radio station.

So I'll say "Click here to download the first segment. Please wait 5 minutes", and it spends 5 minutes downloading in full the first 10 minutes of my show, and then calls WinAMP to play back the complete file, stored locally on my hard drive called "1200-1209h.mp3"...

...and in the background, my application starts downloading the next file, "1210-1219h.mp3", which takes another 5 minutes to download, and 10 minutes to play...

...well, I'm not really "streaming", am I? I mean, you're listening to an MP3 stored on your hard drive, and you happen to be downloading another one while you listen to the first one. Thompson sure as fsck can't patent that.

Ogg Vorbis? More like WMA...

A compelling reason to move to Ogg Vorbis for those who have been holding out?

Unfortunately, apart from in some OSS circles, *nobody* knows about OGG. Apart from the fact that the name (whilst cool to us geeks) is confusing and bizarre to most people, it gets no publicity in the eyes of the people we should be encouraging to use it, and there is next to no audio available in OGG format.

All the companies who have been streaming MP3 (which has been relatively friendly to *nix) will just switch to WMA (Windows Media Audio) since AFAIK, Microsoft gives away the encoding tools for free (beer), and most people actually know about it and can play it with no fuss. This is *bad news* for free audio, not good.

Re:One thing to keep in mind..

Yet somehow that reminds me of Unisys's stance on their LZW compression patent up until very recently when they discovered they could extort more money from people by not having such a lax restriction. "You want GIFs on your site produced by a non-licensed generator? Pay us $5,000 now or face legal action!". They're not making any promises that they won't go after royalties from free distribution places at a later date, so I still wouldn't trust them.

Re:Sounds pretty fair to me.

I don't agree that this was a non-obvious invention. The 'non-obvious' part was done in the 50s and before, with research on information theory, the fast fourier transform, psychoacoustics, and so on---all of which is out there for anyone to use. Pretty much everyone who knows about these things and saw how the Music and Telco industries are multi-billion-dollar sectors in an environment where bandwidth is limited but computing power is excessive has thought of this. Not to say its a trivial task, but its one of engineering.

MP3s real success is its placement in the market i.e. its widespread adoption--they were there with the right tools at the right time, and allowed people to use it gratis. They probably aren't the best format out there, but they were good enough and fraunhoffer played the right cards at the right time. Plus they secured their dominant position when Napster chose to use mp3 as its sole file-trading format. (not that there was much of a choice at the time.)

That being said, its dominance may even come to an end when Windows XP gets adopted widely and Napster and Thomson start charging--I already know people who have switched all of their music over to the wmf format. But for now, the market has made it the standard--last time I searched for .ogg files on gnutella there were about 3 hits.

Apparently, this is the hidden hurdle that open alternatives face. The only entities that can invest enough money into something to make it a market-place standard are those who hope to make a ton of money off of wide-spread adoption.

OggVorbis & MP3 Howto

I've an almost updated MP3 HOWTO and even though I've an OggVorbis section in it I'm going to rewrite it with as much coverage.

Boy's and Girls..... if you are using any OggVorbis apps, or know of any tools being developed, let me know.

I'll change the HOWTO's name to MP3 & OggVorbis HOWTO.

Thanks

Phil

I just had a real scary thought

What if the RIAA buys the patent off Thomas Multimedia and then uses it to kill of any mp3 file sharing illegal or not.

Something like this is too good for the RIAA to just ignore. I am sure some media company if not the RIAA will snatch it.

Oh, also Microsoft is for a way to have its own proprietary format to compete agaisn't mp3's. Look here for more information on some of Microsofts tactics [theregister.co.uk].

If Microsoft bought the patent or the company they can also sue everyone company in existance who offers mp3 file streaming. But, if you use WMA under a MS platform, you can stream it for free. Just only use NT as the server and the client because its illegal to reverse engineer it and port it to other platforms under the DMCA act. I guess we can get all those product activation cards ready or pay $25 for a cd.

This is complete BS.

Winamp already does MP3 streaming; just hit Ctrl+L, feed it a URL, and it streams it. How about during downloads? You can point ANY application that plays MP3 files (Winamp, mplayer2.exe, XMMS, etc.) to an MP3 file that has been partially downloaded by a download utility (specifically, one that puts the file in the final destination even while it's still downloading), and it'll play perfectly, up until the current end of the file, at which point you can play again, and it'll be further down because of the download.

A patent on this type of thing is ludicrous, and I hope there are plenty of people around to challenge it. Apathy is the enemy of freedom.

When do these things expire?

I'd be curious to know when the MP3 patent expires. I recall MPEG, of which MP3 is a component, dates back to the beginning of the last decade, so assuming MP3 was developed no later than 1991-2, is MP3 going to continue to be restricted until 2007? Or could it be earlier?

On a similar note, isn't the LZW (Unisys, GIF) patent almost dead by now? I recall that one goes back until the mid eighties. .GIF itself, a user of LZW which was already in widespread use at GIF's birth, goes back to '87, and I believe that the Unix "compress" program is even older.

Anyone know what the liberation dates for these algorithms are?
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Re:I use 'em almost exclusively

So far as I know, the Ogg Vorbis codec isn't geared toward streaming, though. I don't know if you could stream with it or what it'd take to adapt it to do that.

Icecast2 is designed to stream Vorbis and is nearing release quality.

Sounds pretty fair to me.

As mentioned in the article, they aren't collecting from people streaming for fun...They just want a small percentage from people who actually make money from streaming MP3s.

I've never had a problem with the MP3 patent..Sure, its nice to have freely available alternatives like Vorbis, but MP3 isn't exactly like One-click-shopping. There's a real basis of years-long research and development behind it, and it was certainly a non-obvious invention.

Re:What legal basis could they possibly have??

You wouldn't use TCP for streaming, too much overhead.
For streaming stuff, you usually use UDP.

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Two witches watch two watches.

Re:This is a sensible licensing scheme

It's the $2000 fee that's the main problem. If you've got a little mp3 streaming site with a few banner ads to pay for bandwidth, your revenue isn't even going to add up to $2000 - but you're still supposed to pay the fee.
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Convictions are more dangerous enemies of truth than lies.

Oh boy, here it comes...

Now the RIAA is going to go after each and every web site streaming ogg or any other non-MP3 files, on the grounds that they are obviously trying to avoid the royalties for distributing copywritten works. A pox on the man who invented the copyright, and may Richard Stallman's death be delayed a thousand years!