[M4IF Discuss] AAC Licensing proposal

[Jim Longo]

Haven't seen any reaction on this list to the announced audio news.  
Although the dreaded usage fees are not contemplated, I am not sure I 
fully understand the language of the royalty structure.
> Under the new license terms, licensees will pay the following royalty 
> rates for MPEG-4 AAC products:
>
> •  For a consumer (non-commercial) decoder product: $0.50 to $0.12 
> (volume-based) per channel
> -  Royalty rates for PC-based software decoder products are $0.25 per 
> channel, up to a maximum annual payment of $25,000 per legal entity

I read this to be FREE products.
This would be all the streaming players wouldn't it.  Does the maximum 
go for both?
What hardware can there be in this category - Free cell phones?
> •  For a consumer (non-commercial) encoder product: $0.50 to $0.12 
> (volume-based) per channel
> -  Royalty rates for PC-based software encoder products are $0.50 to 
> $0.27 per channel (volume-based), up to a maximum annual payment of 
> $250,000 per legal entity

I understand this would be iTunes, etc., That may be  a reasonable 
amount $250,000 for Apple.  Again what hardware devices would be free?
> •  For a professional (commercial) decoder product: $2.00 per channel
> •  For a professional (commercial) encoder product: $20.00 per channel

This seems to me to be high if we are talking about QT Pro, or many 
other commercial software products that are in that price range, but 
probably acceptable for DVD-type players and any recording devices.
If I understand this correctly we won't see many shareware 
software-based AAC rippers.  This is for instance much higher than the 
current mp3 encoder licences isn't it?
> There are no royalties or usage fees for content distribution in AAC 
> format, either in electronic form or in packaged media.

At least this seems a good omen of the current thinking on the subject.
Regards,
Jim Longo