Kostya's Boring Codec World

“AI” as itself does not interest (or bother) me much, so I find it more interesting to look how this phenomenon interacts with the world around. Here’s one rather unexpected parallel.

I’m not trying to claim that current “AI” fills exactly the same niche or follow exactly the same history, but I find the coincidences rather amusing.

Hollywood started when most of the movie studios moved to California in order to be far from Edison’s company which owned a lot of patents on cinema equipment; there they started to indulge in mild and hard copyright violations—the most prominent example, let’s call it The Big Mouse to protect the guilty, was founded by a person whose original character was essentially stolen from him, so he created that Big Mouse (which looks suspiciously close to his first creation) and started to make money by taking public domain works and creating derivatives (which now were protected by all possible USian laws, to the extent of the certain nickname copyright term extension act got). And apparently they thrived on the fact that screenplays being derivative work could be used without any royalties to the original author (unless you explicitly want to use that work or author’s name for better publicity of course), so the studios saved a lot of money by producing a completely “original” script definitely not based on some book or another script sent to them by some naïve scriptwriter (I’m not sure that Nosferatu was even the first movie to pull such a trick but it definitely had a lot of followers in the following century).

Now look at the “AI” produced content and make the comparison for yourself.

Then there’s a common trend of financial gravitation, when smaller companies grow into larger ones by absorbing everything around (and occasionally merging) so even if you start with the cloud dust of many indepedtent researches it will eventually accrete into just a couple of giant companies (maybe with some satellites) absorbing anything they can reach. So like in Hollywood you have half a dozen of major studios and a couple of small fish, there maybe about the same number of large “AI” companies with no serious competition. It may also explain why the heads of the companies are often people who don’t understand anything about the businesses they run but that’s so common that you rather need to list rare exceptions.

And partly this can be explained (damn! I said I see it as a coincidence, not something following the same trajectory by obeying the same general laws) by their productions being soulless large-budgeted “original” productions (I’ll probably just call it SLOP for short) that use a lot of GPUs to render the final result.

But there’s definitely a difference! Hollywood is known for its accounting system that raises relatively large sums of investments and subsidies and then reports losses on movies no matter how much income they bring. I’ve never heard “AI” companies being accused of hiding profits, only for using a creative accounting to hide losses in order to attract more investments. Definitely nothing in common here!

So there you have it, two completely different categories of enterprise, giving you ephemeral products (in the sense that you watch a movie or run an “AI” agent for some task from them and then you’re left with nothing substantial afterwards, only vibes and feelings) and demonstrating similar behaviour. To repeat it at least for the third time, this is just a coincidence—but I get fun wherever I can find it.

Of course neither stupidity nor greed (nor a combination of both) has been scarce at any point of human history, but in these days it feels like the main driving force behind various decisions at all possible scales, from individuals to the countries.

Naturally, despite having the common mechanics (some entity pursuing short-term gains while destroying the prospect of long-term gains) there are different flavours of it and I’ll try to review some of those.

First of all there is something that can be called goodwill monetisation. In this case somebody tries to convert existing reputation, connections and such for instant financial gain even if that leads to ruining them (and the profit they generated) for rather meagre compensation. The simplest example is any company selling its customer base data to e.g. advertisers (large corporations can get off with it by being monopolists and not having much reputation to lose in the first place). But the biggest beautifullest example of it is USA as a state. Back in the day I wrote a post about it that USA got as successful as it was until quite recently because it created a field and rules for everybody to play by. But certain somebody decided that USA is too important so if it will demand money from other trade participants just because and they will comply—not understanding that the trade was flowing to the USA because it was an attractive country for that and his decisions make it less attractive country and in the future others would think twice before doing any business with it (a small personal example: I haven’t bought anything USian in 2025 even if I had done that before occasionally and I’m not sure if I’ll ever consider it again). Similar acts regarding other things (like trying to leverage NATO to act as its personal army as well as buying more USian weapons just because; all while demonstrating how unwise it is to rely on them or—as Switzerland has recently learned—even to get what you paid for). I’m pretty sure more examples will keep providing themselves, all I can say that all trust-based systems would have the same effect (e.g. try to cash in 10% of total company stock or “crypto”coins emission in a short time and their price will drop even during such transactions and probably will remain low for a long time after).

Then there’s management. By that I mean not merely a swear-word (equivalent to being stupid and greedy sociopaths) but the acts of destroying company in the long term for short-term benefits (resulting in bonus for the manager, the only important thing here). You know, outsourcing production overseas, laying off staff just to show certain level of expenses cut (even if you have to hire those people back next quarter and not all of them will agree to come back), rushing production and cutting corners and so on and so on. Probably you can point at any large company for that but the best example IMO is Boeing with its catchy slogan “if it’s Boeing I’m not going”. Usually the companies have some robustness so when the aftermath of management starts to show it’s too late to save them (of course there are small miracles like Lou Gerstner and RedHat but in general don’t bet on it). I heard that vestments and options are supposed to fix that but I suspect it won’t work as good while there are no repercussions for doing badly (i.e. if you screwed up your current company you’ll still get your precious metal parachute and get employed by another company—unless you need a presidential pardon to remain in business of course).

There’s also general stupidity best illustrated by this joke: Security arrested a man who tried to smuggle uranium in his underpants. They ask him why did he do that and does he realise he won’t have any children now? To that he replied that he’d get enough money to leave to his grandchildren. This case is nothing new and happens every day to many individuals (you probably can name a couple of examples yourself). And if you wonder how it’s different from the previous two cases, it’s the nuances: in goodwill monetisation you kill the hen laying eggs for making a pillow (not even a soup!), management usually destroys somebody else’s property for their personal gains, here it is exercising a plan without thinking about consequences while those consequences backfire and make the original goal unachievable.

Another case can be called “a bull in a china shop”. Here some entity is so envious about money going past them that it makes a desperate grab for them, making things worse for everybody. Since this is a blog (occasionally) about multimedia, the most appropriate example would be codec licensing. The idea was simple: a committee creates a codec from the best technologies submitted by different entities (companies, universities, Fraunhofer-Gesellschaft etc), then everybody enjoys the best technology for a reasonable fee, which is used to pay the original creators—everybody wins. But then not just the patent holders involved in the codec creation got stupid greedy but completely unrelated entities as well, so now we have at least three patent pools for H.EVC and nobody is willing to use VVC at all (maybe except Brazil). So of course it’s the best time to raise fees on H.264.

And of course it gets better! The natural reaction to such thing is to move away from patented stuff—which Alliance for Open Media did. So the predators moved after them. Even before AOMedia there was VP8 and Nokia with its famous patent that apparently covered any modern video codec. And there’s D*lby, definitely not a nice company (fun fact: unless I’m mistaken, when this originally British company moved to USA, D*lby Labs Licensing Corp got incorporated earlier than D*lby Labs Inc.). For a long time it was known for its cinematic equipment and, more importantly, for charging significantly more money for its ATSC A/52B codec than others for their codecs combined (I don’t have official numbers of course but I heard that while H.264+AAC decoding cost ten cents or less per unit, for ETSI 102 366 you had to pay over a dollar per unit; plus a custom license deal—in other words, it’s better not to deal with their stuff at all). With their successor codec not being that popular (despite so many wonderful DRC modes!), D*lby Vision not being too widespread either, their only winning move was apparently to go after the competition. So first they sued two companies here in Germany for using AOMedia OACv0 (aka Opus) which allegedly violates their patents, later they went after other companies for using AV1 which allegedly violates their patents (AOMedia definitely needs to produce more stuff to get sued after, IAMF might be not enough). I don’t know if D*lby wants a one-time ransompayment, or a constant stream of royalties for a free stuff (don’t ask me how it would work, they don’t care either), or to be bought by large AOMedia member(s). All I can say is that this situation definitely makes it worse for everybody not even directly involved in it.

If you wonder if there are other types of stupid greediness being practiced, there definitely are—idiots can be very inventive after all. Meanwhile the (dis)honorary mention goes to “AI” companies for blending all of those flavours of stupid greed into one large slop.

What a time to be alive!