Fortunately, there is some good news in the form of HTML 5. This new version of HTML (the basic language used to write webpages) introduces a video element.
This will allow people to write their websites specifying the appearance of videos in a standard way. How the individual browsers choose to implement the playback is then up to them - whether they handle movies themselves or farm them out to embedded/external players is a decision made by the viewer, not forced back onto the content creator. The even better news is that support for this is already arriving - Firefox, Opera, Chrome, and Safari have already rolled out HTML 5 support and other browsers wont be far behind.
h.264 is only royalty free till 2015, vp8 is royalty free from what i understand unless the mpeg-lg steps in and attaches a patent to it and charge a royalty fee to it,
What is clear though, is that we need a baseline to work from - one standard format that (if all else fails) everything can fall back to. This doesnt need to be the most complex format, or the most advertised format, or even the format with the most companies involved in its creation. All it needs to do is to be available, everywhere. The codec in the frame for this is Ogg Theora, a spin off of the VP3 codec released into the wild by On2 a couple of years ago. It scores quite well on both the quality and compression fronts, standing up respectably against its more popular rivals such as MPEG4, while actually being much simpler to decode. The overwhelming feature that makes it stand out from its rivals is the fact its free. Really free. Not just free to use in decoders," or free to use if you agree to this complicated license agreement," but really, honestly, genuinely, 100% free. The specification for the stream and encoder/decoder source is available for public download and can be freely used/modified by anyone. Theora was designed and is maintained with the overriding goal of avoiding patents. No other codec can come even close to claiming to be as patent or royalty free as Theora can, whilst still holding a candle to the alternatives.