Bladewire

Ok I'll answer for you PornNerd. You have a liability using MP4 as it's owned by a patent pool that will start charging for use of the codec in December 2015. WEBM is open source and backed by Google. No chance of being charged to use the codec in the future.

Our pay sites are a subscription service. People pay to see our videos.


StreamingMedia excerpt, full story here

H.264 Royalty Status
A number of companies claim patent rights for intellectual property contributed to the development of H.264, and all that do are members of a patent pool organized by MPEG LA. Under the patent pool, different royalties apply to the different classes of products, as shown in Figure 3.


H.264 Royalties

Figure 3. The H.264 royalty structure from the MPEGLA Summary of AVC/H.264 License Terms FAQ.

On the left are products sold or otherwise distributed with AVC encoders or decoders installed, while on the right are various content categories that include video encoded into H.264 format. Briefly, on the left side of the diagram, royalties start after the first 100,000 units are sold each year, and cap at $3.5 million per year 2005-2006, $4.25 million per year 2007-08, $5 million per year 2009-10, and $6.5 million per year in 2011-15.

For content categories on the right, there are royalties for subscription services, that scale with the number of subscribers, but only start after exceeding 100,000 subscribers. There are also charges for Title-by-Title content sold to viewers (pay-per-view), but only for content longer than 12 minutes in duration.

Continuing clockwise on the right, there is no royalty for H.264 encoded video delivered for free over the Internet, though fees apply for Free Television encoded in H.264 for Broadcast Markets that exceed 99,999 television households. Interestingly, the H.264’s patent group’s policy on free Internet video has varied significantly over time. Initially, there was no royalty until at least January 1, 2011, a policy that dissuaded many high-volume potential users from adopting H.264. Then, in February 2010, MPEG-LA announced that royalties would be delayed until December 31, 2015. Finally, in August 2010, MPEGLA extended the royalty-free license “in perpetuity," with some pundits claiming that this was in response to Google’s open-sourcing the VP8 codec acquired from On2. Whatever the reason, those distributing free Internet video encoded via H.264 will never have to pay a license fee to MPEG LA.