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<strong>HEVC</strong> <strong>Advance</strong> Program Update<br />
• Reduced royalties on both content distribution and devices<br />
§ Limit royalties to places where revenue is generated from an end-user sale<br />
§ Waive royalties for “Free-to-User” content (ad-supported, no fee to end-user, etc.) for both Broadcast<br />
TV and Internet Content<br />
§ Simplify structure to eliminate “Attributable Revenue” calculations<br />
§ Royalty phase-in for Content Subscriptions<br />
• Royalty caps added<br />
§ Device and content category caps provide benefits to licensees in a single product category<br />
§ Aggregate caps for multi-category licensees<br />
§ Caps apply to an entire enterprise (i.e. royalties owed from a Legal Entity and its affiliates are<br />
aggregated and applied against the cap amounts)<br />
• Encourage market development<br />
§ Royalty credit ($25,000 per year) to exempt smaller market participants<br />
§ Reduced royalty rates (50% discount) in emerging markets (“Region 2”)<br />
§ 20% limit on any increase to royalty rate and cap amounts during any 5 year renewal term.<br />
• Incentive Program for Prompt License Execution<br />
§ Up to 50% reduction in royalty rates and application of annual caps on prior sales<br />
§ 10% royalty discount on device royalties for first license term (through December 31, 2020)<br />
<strong>HEVC</strong> <strong>Advance</strong> <strong>Patent</strong> <strong>Pool</strong> <strong>Updated</strong> <strong>Pricing</strong> - December 18, 2015<br />
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