Why Does .mp3 Need to Be Licensed?

I have used two separate media organizer programs, Creative Media Source and Media Monkey, and neither of them could encode tracks from audio CD's in .mp3 format without an expensive upgrade, which very much bothers me, since I have always presumed that it was a free format due to being the most ubiquitous audio format in the world. I shall likely pay for the upgrade so that I can encode .mp3 files, but it still is annoying, and I feel that it should not be necessary.

What does everyone else say about this? Why does a fee need to be paid to encode .mp3 files?

I actually found a .dll file that enables Media Monkey to encode .mp3 files without needing to pay for an expensive upgrade, there by saving myself $25.00, so it seems that I am not the only person who is annoyed by such practices.

Does anyone have anything to say about this?

The MP3 codec was never an open source or free project. It was developed by a company to be utilized and sold in commercial products. While it was distributed freely for playback, encoding or actually "creating" an MP3 was a patented technology, and therefore needed to be licensed. There were several projects that came out that allowed you to do it but they were unlicensed and actually illegal under copyright law. Most of those initial patents are ending now, so we might not see the licensing issue crop up as much in the near future. There is a whole section about the licensing ownership and legislation in the MP3 wikipedia page...

https://en.wikipedia.org/wiki/MP3

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Originally Posted by OvRiDe

The MP3 codec was never an open source or free project. It was developed by a company to be utilized and sold in commercial products. While it was distributed freely for playback, encoding or actually "creating" an MP3 was a patented technology, and therefore needed to be licensed. There were several projects that came out that allowed you to do it but they were unlicensed and actually illegal under copyright law. Most of those initial patents are ending now, so we might not see the licensing issue crop up as much in the near future. There is a whole section about the licensing ownership and legislation in the MP3 wikipedia page...

https://en.wikipedia.org/wiki/MP3

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If .mp3 is not free or open source, how did it become the most ubiquitous audio file format in the world?

Well you have to remember at the time .mp3 came out, there really wasn't any compressed music formats that were conducive to distribution. WAV format was there but the files were huge for a 56K modem. Also portable devices didn't have massive storage available either. It was pretty revolutionary at the time. So it all boils down to who is going to fork out the money. If the end user had to pay extra then the majority would probably just stick with their CD players, and the format could probably have just died on the vine. So instead you approach the device manufacturers to produce the devices. Once the devices are out there producers want their music on those devices so they pay the license fee to encode their music into MP3 and then distribute it. It might have been an easy sell to them due to the cost of producing and distributing physical media may have been more expensive than the licensing of encoding an mp3. Then you get people like Apple, Creative, Diamond etc etc into the mix and here we are today.