The MPEG LA organization, owners of the h.26x video codecs have announced that licensing of the h.264 video codec will remain permanently royalty free for those who provide free internet video to end users.  Previously the moratorium on licensing fees was set to expire in 2016, at which point the plan was to begin charging sites like YouTube fees.

The announcement adds an interesting twist to the contentious recent issue of video codecs and HTML5.  Currently the prevailing codec appears to be the proprietary lossy H.264 (MPEG AVC) codec.  It is used in the HTML 5 video implementations for Internet Explorer 9, Safari, and Google Chrome.  Google Chrome also supports Ogg Theora, along with Firefox and Opera.  Opera, Firefox, and Chrome's Developer version all support Google's open-source royalty-free WebM video as well.

The issue is that using three formats -- Ogg Theora, WebM, and h.264 makes coding a bit of a headache as you need to upload all three formats and include source tags for all three formats if you want to be sure to support all users.

Now that h.264 licensing is free forever for free internet video, that should help Apple (whose CEO Steve Jobs is a major MPEG LA shareholder) and Microsoft push the format.  However, it must be remembered that unlike Ogg Theora and WebM, MPEG LA does still plan to charge for paid video.  This means that if sites like Hulu implement subscription services, they will likely have to pay for license.  As will companies that deploy h.264 on their internal websites or use the format for offline purposes.

WebM and Ogg Theora, on the other hand are both free.  And while h.264 is proprietary and closed source, both WebM and Ogg Theora are open-source community efforts.

On the other hand, MPEG LA contends that WebM likely violates its patents.  The makers of h.264 are rumored to be preparing a suit against Google over the claims.

And one must also consider that "free" "forever" is somewhat of a misnomer, as h.264 won't be used "forever".  It'll be only a matter of time before a superior codec will come along proprietary -- or not -- and these questions will be asked anew.  Perhaps MPEG LA should say its "free for as long as it's in use".

Thus, while the h.264 announcement lets (some) video providers like YouTube to breathe a sigh of relief, it by no means has laid to rest the question of what formats browsers makers should support and endorse.