Because royalties for the H.264 and H.265 video codec are too high Cisco is developing a new open source patent-free alternative codec called Thor. The H.264 codec is currently widely used on the internet and H.265 is gaining more and more popularity. H.265 promises to double image quality while consuming half the bandwidth and will become the codec for Ultra HD Blu-ray.
Where H.264 is licensed by the MPEG-LA, H.265 requires royalties to be paid to several parties. Even worse, H.265 is sixteen times more expensive than H.264 according to Cisco. And while there is an upper bound for H.264 royalties there is no such cap for H.265.
Therefore Cisco has decided to submit a video codec to the Internet Engineering TaskForce (IETF). With Thor, as the codec is called, Cisco aims to provide the web with a royalty free open source video codec.
The company has hired two video codec experts and patent lawyers to make sure that Thor will indeed be free of patents, e.g. by creating an alternative to patented technology. Although the codec is far from finished, Cisco has decided to already announce Thor and make its source code available on the Thor Project website hoping others will join them in their effort.