[jwilliams]

When Philips invented the cassette tape - they opened it up completely. If you called Philips they would give you designs, tell you what manufacturing equipment was required - even where to source the equipment and materials.

Philips ended up with a decent percentage of a massive market - as opposed to 100% of a niche (perhaps non-existent) market.

They took a similar strategy with the CD.

[skmurphy]

They also made money on the cassette tape recorders/players.

This Sony history implies that royalty free was more of a negotiated outcome than a strategy: http://www.sony.net/Fun/SH/1-17/h1.html