Technology has evolved and improved at an incredible pace. Nowadays, we tend to take for granted most of the innovations we use on a daily basis that make our lives easier, removing boundaries and making us more interconnected. We are now able to enjoy any kind of video, almost everywhere, on different devices, by simply pressing the play button. This seems to happen seamlessly, but what we don’t get to see is the great complexity behind this simple gesture: a wide range of tools – from image partitioning to motion compensation – work together to compress video data and, at the same time, achieve the highest video quality at substantially lower costs. Innovation needs tools, and their evolution over time – together with the increasing performance they achieve – lead to different codecs, tailored to address specific needs of different industries – from broadcasting to medical imaging – all to the benefit of consumers and those that provide devices and services to consumers.
Videos are an integral part of our daily life. Every time we enjoy a movie on our TV while comfortably sitting on the couch or watch a funny video on our smartphone while commuting to the office, video codecs are working behind the scenes to make this possible. According to the Cisco White Paper: “Visual Networking Index: Forecast and Trends, 2017-2022”, by 2022 more than 80% of internet traffic will be videos. It’s not surprising that the industry’s demand for enhanced video codecs is growing year by year.
Innovation is made of ideas. But to ensure continuous technological development, generating ideas is not enough, they have to be made available to the broadest set of players. This is where standardization comes into play. International organizations and global professional associations document and thereby make widely available current technological standards, promoting a broad diffusion in the marketplace.
Ensuring the world can communicate in the same language is hard, even more when the language is coding. Innovation requires collaboration: each coded video must play on each enabled device. That’s why international and independent standard-setting bodies are so important within the innovation ecosystem: their work makes the interoperability between content and devices possible, resulting in products which are able to talk to each other.
Standard-setting bodies, like ISO and ITU, include experts from firms, users, interest groups and governments. Their scope is to create open, interoperable and universal international standards for a large variety of industries, from food safety to technology.
ISO and ITU have also specific branches dedicated to the creation of new video codec standards, respectively MPEG (Moving Picture Expert Group) and VCEG (Video Coding Experts Group), and their work over decades (both alone and as part of joint teams) brought to life the most used video codecs, from MPEG-2 to H.265/HEVC.
Innovation is trial and error. But when it works, it greatly affects our daily lives.
Standards for television. Standard development in broadcasting scenarios was critical for the success of television: interoperability ensures that a consumer is able to buy a TV, or a receiver apparatus, from any manufacturer and be sure the equipment will decode television signals from any broadcaster in the world. Standardization bodies and industry fora including ITU, ISO, DVB, ATSC, have been working hard on the development of standards with global relevance such as MPEG-2, AVC and HEVC, enabling the creation of horizontal markets in the field of multimedia services, continuing improving and developing them in order to provide the proper support to the needs of consumers and the media industry.
Hundreds of companies accessed this standard and elected to implement the technology in their products. Without this fully-functional ecosystem, TV manufacturers would have had to implement each single transmission technology adopted in each country to ensure interoperability within the broadcast infrastructure. This would have required long, complex and expensive implementations, leading to an increased price being passed to the final user for access to the technology.
Mobile communication standards. Many years ago, each country had its own landline network based on local communication standards and, as a consequence, suppliers had to serve different markets with different technologies resulting in complex and expensive communications between different countries.
Mobile telephony has reshaped the entire system. The players in the telecommunication industry have addressed together the complexity behind mobile communications by developing sets of standards to build a system intended to be deployed on a global scale.
As a result, fixed and mobile networks are now connected and make up a single communication system allowing everyone to enjoy communication services everywhere in the world through our smartphones.
Innovation takes years. In the case of video codecs, it may take up to a decade from preliminary work to publications and the patentable technologies that result from innovation, with expenditures of substantial resources.
It is well-recognized that patenting is extremely important in the innovation process, since filing a patent provides incentives and protection to inventors, allowing them to seek compensation for the use of their patented ideas. Patents, as with all Intellectual Property (IP) rights, can be “leased” through patent licensing, offering the chance to the owners to generate profits (licensing out) and to the “lessees” to implement new ground-breaking inventions into their products (licensing in). It is this possibility of licensing income that encourages inventors to disclose their inventions, allowing others to use them for appropriate fees and making it possible that others will build on and improve the inventions that have been disclosed.
Managing IP means supporting innovation. Revenues from patent licensing can be and regularly are re-invested in R&D activities. This creates a self-sustaining cycle in which the fruits of previous innovation can fund new research, generating an inventive loop in which the intangible assets acquire real economic value.
Innovation is a long and expensive process, it requires the possibility of substantial returns to be worth pursuing.
This system has been working so far. Investments in innovation, R&D, patent licensing and standardisation have been fuelling an innovative and healthy ecosystem with new products and services , ensuring technology development, economic growth and a tangible benefit to society.
If innovation is not fairly and reasonably rewarded, there will be no incentive to innovate further and technological progress will stop. Innovation needs protection, otherwise only companies with revenue streams other than licensing will be able to fund R&D investments. This will exclude small players and non-for-profit innovators, like universities and R&D centres, which are also very important contributors to technological progress. In other words: only those innovators with an established and ever-growing market power would continue thriving, causing the model of collaborative, standard based innovation which benefits all to break down.
Supporting the innovators and recognizing the value of their work who brought us this far is essential to ensure a bright future for video codecs and for the innovation system to stay healthy and functioning. That’s the right thing to do. Reward innovation: play the right future.
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Sisvel is a world leader in fostering innovation, managing intellectual property, and providing efficient and fair access to valuable innovations. The Sisvel Group identifies, evaluates and maximizes the value of IP assets for its partners around the world, providing firms with a new revenue stream on terms fair too innovators that can be reinvested, ensuring the technology ecosystem has a continuous flow of capital to support innovation through R&D activities.