The MPEG-4 licensing terms proposed by MPEG-LA (the largest group of MPEG-4 patent holders) includes royalty payments from companies, like Apple, who ship MPEG-4 codecs, as well as royalties from content providers who use MPEG-4 to stream video. Apple agrees with paying a reasonable royalty for including MPEG-4 codecs in QuickTime, but does not believe that MPEG-4 can be successful in the marketplace if content owners must also pay royalties in order to deliver their content using MPEG-4.

“MPEG-4 is the best format for streaming media on the web, and QuickTime 6 is the first complete MPEG-4 solution,” said Philip Schiller, Apple’s senior vice president of Worldwide Product Marketing. “MPEG-4 is poised for great success once the licensing terms are modified to allow content providers to stream their content royalty-free.”