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The IOD is an object descriptor that does not only describe a set of elementary streams, but it also conveys the set of profile and level information that is needed by a receiver to assess the processing resources needed for that content.
It is called initial OD since at least the very first OD that is used to access the MPEG-4 content needs to be such an IOD. However, if sub-scenes of a presentation are generated separately, they may as well start with an IOD (attached to a BIFS Inline node)