Several large Internet companies - Amazon, Cisco, Google, Intel, Microsoft, Mozilla and Netflix – have formed the Alliance for Open Media (AOMedia), an organization aiming to create an open royalty free video format that is interoperable, fit for various devices including mobile ones, supporting high quality video formats including UHD and commercial/non-commercial content.
The new format and codec will not start from scratch but it will be based on existing ones: VP9 from Google, Thor from Cisco and Daala backed by Mozilla and others. Thor is a newer format from Cisco, announced in August. While Cisco is one of the MPEG LA licensors, they have started to pursue a royalty free solution because they have several free products and the licenses for H.264 and H.265 are very high, according to Jonathan Rosenberg, VP at Cisco:
The total costs to license H.265 … is up to sixteen times more expensive than H.264, per unit. H.264 had an upper bound on yearly licensing costs, whereas H.265 has no such upper limit.
These licensing terms preclude usage of H.265 in any kind of open source or freely distributed software application, such as web browsers. They also preclude its usage in freemium products – like WebEx or Cisco Spark – which have versions that users can use for free. Thus, while H.265 is still a good fit for hardware products like our telepresence room systems, it is not something that can serve as a universal video codec across hardware and software. Thus, we believe the industry needs a high quality, next-generation codec that can be used everywhere.
An unusual presence in the AOMedia is Microsoft. They have even started development for adding VP9 to their latest browser, Edge. They are also evaluating other video and audio formats, such as OGG, Opus and Vorbis.
One notable missing party is Apple, another MPEG LA licensor. In spite of that, the newly formed AOMedia can be seen as a success for Google and Mozilla which have tried to get the critical mass to back up an open video format. While they have pushed for such a format for years, its adoption was limited because most of the content remained in H.264 format. Now, chances are a new free format for the Internet to emerge, leaving the royalty-based formats behind.