H.264 may not be free to distribute if you have a blog that contains some 
ads, even if you're only earning pennies a day. That doesn't sound so bad if 
you don't think about it, but after some analysis this is really quite a big 
deal: It removes that unique endless flexibility of the internet. You have 
to think about the notion that H.264 is a codec that needs licensing in 
certain circumstances at EVERY STEP of ANYTHING you'd do with ANYTHING 
related to the internet, and that becomes suffocating. For example, 
eclipse's help system fires up a little web server, and then either opens up 
a mini web browser in eclipse itself, or opens your browser. Some of these 
help files are generated by plugins.

This sounds great, but with H.264 in the mix, what if some of those plugin 
help files contain H.264 video, rendered via video tags? Does the eclipse 
foundation have to pay licenses? No, wait, scratch that, does the Eclipse 
Foundation have to divert some funds to a legal war chest in case the 
MPEG-LA insists they have to do so, even if the MPEG-LA is wrong?

See what I mean?

As long as video is in flash form, adobe takes care of the licensing issues. 
Same goes for embedding videos in HTML via quicktime. With videos as part of 
the web itself, in the form of the <video> tag, this changes. We've gone 
through this mess with GIF, I'd rather not go through it again.

This situation (having to think about licensing stuff in the first place, 
nevermind if you actually need to pay it, or reserve a war chest in case the 
MPEG-LA insists you do have to) is highly detrimental to smaller web 
endeavours. The death or suppression of these in favour of most of the 
internet in control of gigantic companies and institutions is a trend we're 
already seeing, and which I feel is going to be stupendously horrible for 
consumers.

So, yes, it's quite a trip to get there, but H.264 is bad for consumers.

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