H.264 is proprietary in the FSF sense, but it is arguable if it is proprietary in the "industry" idea of the term. If Steve Jobs is saying H.264 is not proprietary he probably means it is an MPEG ISO standard that is licensed under reasonable and non-discriminatory
(aka "RAND") terms. Proprietary in this sense tends to mean a technology owned usually by a single entity and perhaps not even licensed at all, let alone to everyone. So what I am saying is calling H.264 proprietary is debatable.
But lets ignore that. Even in the FSF sense, a dependency in the open web on H.264 is preferable to Flash or Silverlight.
- The "IP" of H.264 is entirely based on patents and nothing more. In fact the MPEG has a fairly fully functional H.264 encoder/decoder they have written and is available under a extremely permissive open source license.
- Being based on patents instead of copyrights means H.264 will become 'Free' quicker then Silverlight or Flash would. For instance, copyright lasts 95 years, while patents last (at most) 20 years. The very last relevent patent (out of nearly a thousand)
that covers any part of the H.264 spec expires in 2026, 16 years from now. That means by 16 years in the latest, H.264 will be an open and free format no different from Ogg Vorbis or Ogg Theora. Even if Silverlight 4 becomes free in 2105 or whenever, there
is nothing in current copyright law that addresses source code.
- MPEG LA does sue entities for patent violation on H.264. So far all these entities have been very large corporations. You couldn't even qualify them as small businesses. I highly highly doubt they'll start going after random bloggers who post H.264 videos
directly on their website. Because it will bring the issue to the of H.264 license to the forefront of the debate. They don't want that.
- The MPEG LA has suspended the patent royalty for distribution of H.264 videos on the Internet till 2016, anyway. This applies to everyone, including YouTube. This at most gives them 10 years (2016-2026) to harass webmasters, should they choose to do so.
- The pigeonhole principle and strong industry standardisation. This will make it difficult for the powers that be to push people off of H.264 once it becomes free. By then they will be so many "H.264" devices that their will be a virtual lock-in on the
format (hint: virtually all Blu-ray players and PMPs). Any H.265 that might pop up will really have to be a lot better then H.264 to overtake it. This will be difficult just by the fact that with any kind of compression, the limits of discrete mathematics
come down hard (eg: the completely undefeatable yet simplistic pigeonhole principle). So there is serious diminishing returns involved every time you try to rev up a compression algorithm. So if they come up with such a better format, they deserve the money
I personally rather Ogg Theora become the standard video format of the web, but I can understand the technical arguments for H.264.
And Microsoft doesn't sue over re-implementations of .NET, so all of that is just technical details. The real issue is whether Steve Jobs is really being honest in supporting an 'open web' or whether its just political cover because they want to control
the iPod platform.