Licensing spat upsets Apple cart

At an Apple conference yesterday, Philip Schiller, senior vice president of worldwide product marketing, demonstrated the latest versions of Apple's QuickTime player and broadcasting and streaming offerings built on MPEG-4 technology.

But the products are to be delayed indefinitely while Apple slugs it out with the MPEG licensing body.

While Apple acknowledges MPEG-4 as an "amazing technology" that promises to set a standard for the incompatibilities between Windows Media, RealMedia and QuickTime, the licensing agreement proposed by licensing authority MPEG LA received a cooler welcome.

The MPEG LA system requires a fee of $0.25 for every encoder and decoder used with a cap of $1m, which Apple is quite happy to pay, but it also demands per-hour royalties for everyone who broadcasts in the format.

Apple has now grounded its offerings indefinitely as it refuses to ship a product requiring a broadcast tax.

But Larry Horn, vice president of licensing and business development at MPEG LA, said that a fee for use is "fair".

"The marketplace recognises the role that intellectual property rights play in the development of these technologies, and the good news is that the market understands the need for it to be respected and paid for," he said.

MPEG-4 is touted as the next big thing for mobile networks because it is capable of compressing video files into a format that can be sent over mobile networks. Apple has announced a partnership with Ericsson and Sun Microsystems to create a wireless content delivery system to that end.

Schiller also requested that everyone in the audience write to licensing@mpegla.com in protest. "MPEG-4 is poised for great success once the licensing terms are modified to allow content providers to stream their content royalty-free," he said.