The VVC standard gives consumers enhanced speed and efficiency in display products that encode and decode video for Internet, linear television and mobile transmission, reception and use, the group said.

The new pricing covers both hardware/paid software ($0.20 per 1000,000 units (capped at $30 million) and VVC free software (at $0.05 per 100,000 units (capped at $8 million). It has been said that In order for VVC to be competitive against the now ubiquitous Advanced Video Coding (AVC or H.264) and the Audio Video Interleave (AVI), its effective aggregate decoder rates over a 5-year period need to be as low as $0.10 for streaming devices, $0.08 for connected TVs, and $0.05 for mobile terminals.

AVC and AVI have been in the market for years and achieved widespread industry support. Currently, AV1 is supported by the majority of the top 5 streaming platforms, browsers, cellular device manufacturers, and TV manufacturers. It will take VVC likely a few years before it can attract such support and this may not be achievable.

Another issue that could limit VVC’s usage is that it is designed for broadcast applications, like 4K and 8K video compression, which, at the high end, is a slowly evolving market. Market research predicts that 8K TVs will be in less than 4 percent of North American HDTV households by 2023 and linear broadcast TV viewing in general is on the decline. There are also low expectations that VVC will be widely adopted for use in cellular devices as the benefits of Ultra HD video are less effective on small screen devices.

The joint license now available includes patents that are essential to VVC, which is also known as H.266 and MPEG-I Part 3 standard. MPEG LA announced the creation of the licensing pool about a year ago. Patent holders in the pool currently include b<>com; British Broadcasting Corporation; Digital Insights Inc.; FG Innovation Company Limited; Hanwha Techwin Co., Ltd.; Koninklijke KPN N.V.; Nippon Hoso Kyokai; Orange; Siemens Corp.; Tagivan II LLC; and Vidyo, Inc.

Larry Horn, President and CEO of MPEG LA, said that the patent owners have come up with a license that takes into account all manner of VVC applications with a simplicity that the market can understand. He also said that all VVC essential patent owners are welcome to join the pool.

“Once again, MPEG LA’s VVC License demonstrates MPEG LA’s continued commitment to striking a balance between patent holders and implementers to make VVC widely available to everyone on the same reasonable, transparent and evenly applied terms consistent with what the market has come to expect of us,” said Horn. “Now more than ever, the market for next generation video needs a pool license it can trust.”

Most agree that VVC is superior in compression efficiency: it can compress a video by as much as 40% compared to HEVC to achieve the same quality playback. Of course, this comes at the cost of coding complexity, which will require hardware updates and thus delay VVC's adoption.

Also muddying the waters, MPEG has developed another codec agnostic software enhancement layer called Low Complexity Enhancement Video Coding (LCEVC). It promises to increase compression ratios in the 40 percent range of the base codec and reduce battery consumption by up to 50 percent over the base codec. Therefore, the combination of AV1 with LCEVC could produce superior compression performance than standalone VVC.

As for what’s specifically covered under the new license, MPEG LA provides this description:

VVC Standard shall mean the visual standard defined in Recommendation ITU-T H.266 Versatile Video Coding (08/2020), edition 1 of ISO/IEC 23090-3 Information technology -Coded representation of immersive media -Part 3: Versatile video coding, and Recommendation ITU-T H.274 Versatile supplemental enhancement information messages for coded video bitstreams (08/2020) to the extent used with Recommendation ITU-T H.266 Versatile Video Coding (08/2020) or edition 1 of ISO/IEC 23090-3 Information technology -Coded representation of immersive media -Part 3: Versatile video coding. VVC Standard shall not include Recommendation ITU-T H.273, Coding-independent code points for video signal type identification or ISO/IEC 23091-2, Coding-independent code points —Part 2: Video.

So, we now have a licensing structure, but it remains to be seen if VVC becomes a marginal codec that serves only UHD, fixed device video distribution, or the next-generation, highly efficient, block-based hybrid codec it was designed to be.

The VVC Patent Portfolio License and a summary of the License terms may be obtained here.