MPEG royalty fees to China’s DVD player manufacturers

According to DigiTimes, there will be bad news for DVD player manufacturers in China. There is some pressure from representatives of the Movie Picture Expert Group (MPEG). China-based makers will need to start paying royalties for use of MPEG2 and MPEG4 patents starting this month.

Royalties will range from US$2.5-4 for each DVD player, and the royalty fees may force some makers out of business, the sources commented.

The new measure was established in a memorandum recently signed between MPEG and an industry representing China’s makers, the sources added.

In addition to MPEG royalties, makers of DVD players are required to pay royalties to the 3C and 6C alliances, which means China-based makers will have to pay an average of US$15 in royalties for each DVD player they make, the sources said.

When considering that some China-based DVD player manufacturers are offering per unit quotes as low as US$30-35 for contract manufacturing, a number of makers are expected to go out of business once royalty payment is required, the sources added.

Source: DigiTimes