Context: The video streaming market has grown rapidly over the last decade and is expected to reach US$119 billion in revenue this year. Avanci was the first pool administrator to tap that market when it launched Avanci Video in October 2023. The program currently has 29 licensors listed publicly (Avanci Video page).
What’s new: Access Advance LLC has just launched a video distribution patent pool that will provide a single one-stop-shop license for internet streaming, including all four of the most recently developed video codecs: HEVC, VVC, AV1, and VP9. The pool will have fixed-tiered pricing scaled to the size of the video distributor’s business – and those who join the program (as licensees or licensors) on or before June 30 this year will be offered “substantial incentives.” The rate structure is not yet public and will be announced after further market discussions.
Direct impact and wider ramifications: The pool, like Avanci Video, is a multi-codec pool, and potentially only the second in history of the industry. Its structure will allow internet video distributors to choose which codec(s) to use based on technical and business merits rather than royalty costs or the need to negotiate multiple licenses. As Access Advance’s CEO Peter Moller pointed out in an interview with ip fray (below), this is something the industry has now been seeking for 15 months.
Boston-based pool administrator Access Advance currently manages a program licensing H.265/HEVC essential patents and a separate program for VVC/H.266 essential patents. This new VDP pool, which materialized after the administrator had started being approached by a variety of both internet video distributors and patent owners 15 months ago, will “build upon the success” of the existing programs, the company said today.
In an interview with ip fray, Access Advance CEO Peter Moller said he was optimistic about the program:
“I hope and expect our video distribution pool will end 2025 with a substantial majority of patent owners on board as well as a significant number of patent implementers, and will have been well received in the marketplace.”
Discussions with market participants, he said, confirmed for Advance that there was a need for a licensing program that resolves the increasingly “hot” issue of video codec licensing in the video streaming market.
Over the last decade and in particular since the pandemic, the video streaming market has grown exponentially. Revenue in the market worldwide is expected to reach US$119 billion this year, and US$155 billion by 2029 (January 2025, Statista report). The growth has been largely enabled by modern video codecs and in this environment, many patentees are beginning to seek royalties from the streaming service providers – with some already litigating against them, Mr. Moller noted, adding: “And we know many others are preparing to seek royalties as well.” In December, Adeia struck a multi-year agreement with Amazon (December 3, 2024 ip fray article). Meanwhile, in Nokia’s multimedia SEP litigation against Amazon Video, the Dusseldorf Regional Court, could (if Nokia prevails) order a Germany-wide injunction against the defendant (January 9, 2025 ip fray article).
Access Advance licensors have seen a fair share of patent litigation over their HEVC codecs, most notably launched against Chinese TV manufacturer TCL – including by Dolby, ETRI, Mitsubishi Electric, Philips, JVCKenwood, LG Electronics, IP Bridge and NEC. In that saga, TCL reached bilateral agreements with IP Bridge, LG Electronics and GE Licensing before it finally signed a licence with the pool administrator last year (October 29, 2024 LinkedIn post by ip fray). This development was also significant because it meant there was no Chinese court decision on a pool rate in the case (after a landmark ruling handed down by the Supreme People’s Court ruling held that a Chinese court had jurisdiction to set global FRAND rates for SEP pools last year (September 3, 2024 ip fray article)).
When asked what ultimately convinced them the program was going to work, when seeing one pool administrator has had no public take-up and another has abandoned ship, Mr. Moller said it was a combination of market need, a request for Access Advance to participate, and a balanced and efficient structure.
In fact, the most important factor of the program for Access Advance was the structure, which covers all four of the most recently developed codecs (HEVC, VVC, VP9 and AV1) and allows content distributors to use any or all of the four codecs for the same price. “It was clear based on feedback we received that this was a necessary feature,” Mr. Moller emphasised. It solves a significant problem for licensees in the dynamic video distribution segment: the need to negotiate for new licenses and pay additional royalties as they add streams in additional codecs.
He noted the risks and concerns:
“Obviously, any time we launch a new program we put [our] mission to the test so to speak. We recognize that seeking royalties from content distributors has been contentious in the past and has hindered the adoption of new codecs. That is not where we want to be. We are a solutions provider and are doing this because the market asked us to do it and to hopefully prevent what we see could become a counterproductive situation.”
VVC market penetration and China
Outside the program, Access Advance is hoping 2025 will see it conclude HEVC licenses with the “relatively few remaining unlicensed entities”, as well as a ramp up in VVC usage and those early adopters being brought into its VVC program. The administrator is also going to continue evaluating a smart-home program that will hopefully show that there’s a “real market need that would benefit from our participation in offering such a program”. Access Advance in June 2024 announced it was partnering with advisory firm Tech+IP to research the potential launch of a patent pool for smart home devices and services (June 17, 2024 Access Advance press release).
Mr. Moller also spoke about China as an “incredibly important market”:
“Just look at HEVC v VVC. Chinese companies’ share of HEVC patents is modest, whereas with VVC, they are industry leaders.”
The company recgonized the importance of China from day 1, he added, noting that it was the first pool to offer a reduced rate structure for sales in China.
As of today, Access Advance’s HEVC and VVC pools have nine Chinese licensors and over 50 licensees, including the likes of Alibaba, ByteDance, DJI, Honor, Huawei, Kuaishou, Lenovo, OPPO, vivo, TCL and Tencent. Mr. Moller could not yet disclose members of its new program, but he said Access Advance is “heavily focused on both China and other Asian countries, including Japan, Taiwan and South Korea”, all of whom make up the bulk of their current licensors and licensees.
The main focus for Access Advance’s long-term future, however, will be multi-standard solutions. As the number of video codecs (and other standards) proliferates, Mr. Moller noted, the need for multi-standard pools that can provide efficient licensing solutions is “paramount”. He added:
“Creative solutions like our scalable Multi-Codec Bridging Agreement [an “administrative” agreement permitting licensees in both of Advance’s patent pools to pay a substantially reduced royalty rate for products that include both HEVC and VVC codecs] and our Video Distribution Patent pool just announced are the future. We believe we are perfectly positioned as a trusted steward to maintain our leadership role in the video-codec space, as well as potentially in other markets with similar needs.”