The video-domain is a tricky thing, but I’ll do my best
When talking about digital videos, people often just refer to the container format, as this is what they “see” when they see the file. But digital video consists of 3 parts:
- video codec
- audio codec
- container format
There are hardly any patents or licensing issues regarding containers. AVI for example is, according to my knowledge free and open – even though it’s been specified by Microsoft ages ago, and MOV (=Quicktime container) licensing appears to be limited to their software, but not the container.
Ogg as container has gained popularity within the audio domain, but is hardly being used for video. I guess, because MKV (=Matroska) seems to be the best solution for the job at the moment. For web-applications, Google’s “WebM” might be a good thing in the (near) future.
As Matroska also supports to be used as audio-only container, I’d personally find it not unlikely, that the current popularity of MKV among consumers might lead to a broader adoption of that format for audio as well – but that’s difficult to say…
For video hardware it’s currently definitely the case that many of them support MKV out-of-the-box, but will very likely never see any reason to support OGV.
So, when talking about patents and licensing issues in the audio/video domain, it’s about the codecs – or algorithms used by them.
Popular non-free lossy (consumer) video codecs at the moment are:
- XviD/DivX: MPEG-4 Part2 Advanced Simple Profile (ASP)
- H.264: MPEG-4 Part 10 Advanced Video Coding (AVC)
Free ones comparable to MPEG-4 at the moment are:
In the audio domain, the popular non-free ones are:
And the free ones:
NOTE: I’ll leave lossless codecs out of the game for the moment, as they are not as widely used/seen by regular consumers.
What is being compared?
Sorry for the detailed introduction, but I think it’s a good thing to make clear that for digital video you need to consider all 3 things:
video-codec, audio-codec and the container.
Usually, most people are actually comparing the most common/popular codecs used within the containers to each other, probably being:
- video: XviD/DivX (= MPEG4 ASP)
- audio: MP3 
- video: h264 (= MPEG4 AVC), sometimes “Quicktime” (=also the name of a codec)
- audio: AAC (Advanced Audio Coding)
- video: Theora
- audio: Vorbis
All currently widely used non-free A/V codecs mentioned above cannot easily be implemented and shared as Free Software, because it might infringe licensing or patents of these codecs.
This means, that depending on the legislation of the countries where the software is downloaded from – and the country the software user is living in.
Nice example: VLC has a note on its website explaining why they are allowed to distribute their application freely:
“Neither French law nor European conventions recognize software as patentable (see French section below).
Therefore, software patents licenses do not apply on VideoLAN software.”
Their servers are located in France. If they’d be located in the U.S. things would be very different.
As Free Software developers could get sued for distributing patented software, most distributions and applications must be shipped without support for these formats. This is the reason why MP3, DVD-Playback, etc. doesn’t work out-of-the-box on Free Software OS (e.g. Ubuntu, Debian, …)
Even worse: Some licensing forbids implement things as Free Software, because then the inner-workings would be visible (although this applies mostly to media-related DRM issues)
With proprietary software, the users are already paying for the (partial!) use of these formats: The royalty fees are included in the price. Funny though, that noone really ever reads the licensing texts, as Apple’s Quicktime license for example, states that additional fees are are required for using MPEG-2/4 for other than personal- or non-commercial use:
“ANY USE OF THIS PRODUCT OTHER THAN CONSUMER PERSONAL USE IN ANY MANNER
THAT COMPLIES WITH THE MPEG-2 STANDARD FOR ENCODING VIDEO INFORMATION
FOR PACKAGED MEDIA IS EXPRESSLY PROHIBITED WITHOUT A LICENSE UNDER
APPLICABLE PATENTS IN THE MPEG-2 PATENT PORTFOLIO, WHICH LICENSE IS
AVAILABLE FROM MPEG LA, L.L.C, 250 STEELE STREET, SUITE 300, DENVER,
So if you use your iStuff to make a video and then go-pro and make money with it: You could get sued… (But I’m not a lawyer)
As you can see, licensing and patent issues with A/V codecs mean that a developer can only join the game if they play by proprietary rules – and have (enough) money to do so. So, even if it’s technically possible to implement these formats as Free Software (e.g. LAME, x264, …), these legal barriers make it difficult (or impossible) to grant access to content encoded in these formats.
I hope this cleared things up a bit?