If you stream any video on your site, this news could drastically increase your future costs.
Here is an excellent article from Christopher Blizzard on HTML 5 video and H.264 which delves into the potential problems we could see on the web when a company demands to get paid for technologies which users may have thought were open. In other words, HTML 5 when combined with H.264 is not the open standard many hoped it would be.
The web in 1999 was a lot smaller than it is today, so a lot of people don’t remember what happened back when Unisys decided to start to enforce their GIF-related patents. GIF was already widely used on the web as a fundamental web technology. Much like the codecs we’re talking about today it wasn’t in any particular spec but thanks to network effects it was in use basically everywhere.
Unisys was asking some web site owners $5,000-$7,500 to able to use GIFs on their sites. Note that these patents expired about five years ago, so this isn’t an issue today, but it’s still instructive. It’s scary to think of a world where you would have to fork up $5000 just to be able to use images on a web site. Think about all of the opportunity, the weblogs, the search engines (even Google!) and all the other the simple ideas that became major services that would never have been started because of a huge tax being put on being able to use a fundamental web technology. It makes the web as a democratic technology distinctly un-democratic.
We’re looking at the same situation with H.264, except at a far larger scale.
Remember that my setup for this was that Google’s choice was going to be H.264-only and that their decision would have network effects on the web, setting up another GIF-like situation for the web.
But I, like many others, have reason to believe that H.264 will not be Google’s final choice. There’s good reason to believe this: they are purchasing On2. On2 has technologies that are supposed to be better than H.264. If Google owns the rights to those technologies they are very likely to use them on their properties to promote them and are also likely to license them in a web-friendly (i.e. royalty-free) fashion. Google actually has a decent history of doing this. In particular you can get a sense of this from their post on The meaning of open:
See my past post on iPhone Flash Support for a bit o history on the matter.