H.264 and the Death of Digital Filmmaking?

Since last week, the video world has been abuzz over a lengthy article written by one blogger, who seems to portray a very “chicken-little” like attitude to the future of digital filmmaking and videography.  She hints at a terrible world where all creativity in digital movie making is squashed by the big bad MPEG company.  She warns of a world where nobody (not you, me or Grandma Betty) can actually shoot, edit, or watch consumer-made videos without paying huge fees.  What does it all mean?  What is the problem?  Is this the simultaneous death of indie filmmaking and home video?   A lot of the discussion is written in techno-mumbo-jumbo so I am going to start from the beginning and see if I can shed some light and clarity on this situation.  Its a long trip down the rabbit hole, so lets get going.

Digital video (especially HD video) is made possible through the use of complex mathematical algorithms that transform the light that the camera sees into 1′s and 0′s that can be recorded to a tape or harddrive.  These algorithms in the video world are known as codecs, and there are literally too many codecs to count.  They all have their pros and cons and work better or worse depending on the situation and hardware/software you are using.  Almost all of these codecs are intellectual property of whomever created them, and therefore they come with their own terms of use and legal licensing.

Recently, one codec has gained a lot of popularity and is currently used by dozens of cameras, iPods, and internet sites to record and playback video.  This codec is called H.264.  It is praised for its ability to process high-quality video while maintaining low bit rates.  In other words, you see a pretty picture, but the file is kept relatively small.  This codec was developed by the Video Codec Experts Group (VCEG) and the Moving Picture Experts Group (MPEG), and therefore it  comes with certain terms and conditions that people must agree to in order to use. Another popular codec called MPEG 2 is also owned by the Moving Picture Experts Group, and therefore also has similar terms.  Currently, MPEG2 is used by all cameras that shoot on HDV tape (Canon XHA1, Canon HV30, etc), and H.264 is used on a ton of the hugely popular DSLRs including the Canon 1D, 5D, 7D, 550d and others.  Besides cameras, the codec is also the standard format for video on all iPods, iPhones, iPads, Flips, and is even used primarily by YouTube and Vimeo.  All of this sounds good so far.  We have a high quality codec that can compress video efficiently and many people are embracing it.  This provides a consistent standard in products we use to shoot video and in websites and devices we use to watch video.

Where is the problem?  Well the problem lies when you read the fine print.  Buried deep in MPEG’s License Agreement, they state that video shot on this codec can only be used in “personal use and non-commercial” purposes.  Doesn’t matter what camera you buy or how much you spend, if it uses either MPEG2 or H.264 you technically will have to pay royalties to MPEG if you want to sell your footage.  For the majority of consumers, this will never be an issue.  They won’t be selling their footage anyway.  However, many professionals are also using these cameras, and that could be very troubling for them.  They will have to pay MPEG for video they shoot.  But wait… there is more.  The hole gets deeper.

This same restriction applies to video editing software.  So even if you do not use a camera with MPEG2 or H.264, if you edit with it in Final Cut, Adobe Premiere, Sony Vegas, Avid, or others they can technically charge you the same way.  MPEG has created a situation where it is difficult for both camera manufacturers and software developers to purchase a license that allows the users to use the codec however they may want.  Ok, well all of this just affects professionals right?  If I am a soccer mom, or baseball dad this shouldn’t affect me?  Well, even that is a little tricky.  Down the hole we go again..

MPEG has recently renewed their “free internet broadcasting AVC license.”  What this means is that people are allowed to stream video online royalty-free as long as the video is “free to stream.”  In other words, consumers can upload their video for others to watch as long as they don’t charge to watch it.  Well Youtube and Vimeo, have advertisements on their sites.  They make money from these ads.  In some eyes, this is non-free usage.  Both the site and the user who uploaded could be in violation and therefore have to pay.

Now there are additional problems when we talk about official MPEG decoders and some open-source ones, but I think for the most part the point has been explained.  The crux of her article is saying that technically MPEG could start charging anyone who has ever shot on these cameras, edited video, or uploaded/downloaded video to these sites.  This is pretty much everyone.

It has been known for a while now, that there are some dicey license agreements, and you should be careful in the way you export a video in H.264.  However, everyone assumed the problem was just caused when you were finishing the video.  This is one of the first articles that explains that the problem starts the moment you press record.  But is it really a problem?

Yes, I will be the first to admit that all of this news is very alarming.  I had no idea that the new Canon 550d I bought had this ridiculous agreement written in.  That technically speaking, I could never sell any of the footage I will ever shoot with it, no matter how beautiful it looked.  The fact that this same agreement is included in the 1d, 5d, and 7d (professional grade cameras) is downright atrocious.  Maybe Vimeo and Youtube are really freaking out, running for the hills, and hitting the panic button.  But then again… maybe they’re not.  Once the alarms stop ringing, the dust settles, and rational thought starts reclaiming its place, I don’t think we need to run around screaming that the end of indie filmmaking is near.  At the end of the day, I don’t think MPEG will do anything at all.  Could they?  In the short term, yes.  Would they?  In the long term, it would be business suicide.  No one would pay.  NO ONE. A new codec would rise from the ashes written by another company with more open standards and that would be it.  Sure us Canon DSLR aficionados would be a bit upset, but I wonder if even that could be sidestepped with a firmware update.

So what about the future? Over the past few weeks, a lot of press has covered the on-going spat between Apple and Adobe.  Steve Jobs has publicly denounced Adobe’s Flash on several occasions (explaining why the iPhone and iPad are Flash-less and will probably always be), and Adobe has since fired back with their own criticism of Apple.  All of this discussion has underscored the future battle over which formats and codecs will play majority of the video online in the future.  As it stands right now, most of the video is played with Flash (aided with H.264 encoding), but more of the big players (YouTube and Vimeo) are moving towards an HTML5 standard in the very near future.  If and how HTML5 will continue to rely on H.264 (or the other favorite Ogg/Theora) remains to be seen.  While all of this speculation is very interesting, I feel confident that I will be able to use my 550d, edit with Final Cut, and upload on Vimeo/Youtube for the foreseeable future.  Far from the death of indie filmmaking, I think we are still in a very exciting rebirth.