Currently two video codecs ("coder-decoder") dominate the communications industry for video conferencing: H.264 and VP8. Both video technologies support high-definition real-time communications and power services such as Apple’s Face Time (H.264) and Google Hangouts (VP8).
H.264 is the dominant video compression technology, or codec, in industry that was developed by the International Telecommunications Union (as H.264 and MPEG-4 Part 10, Advanced Video Coding, or AVC). One of the few disadvantages of H.264 is that it requires royalties paid to the MPEG LA patent pool consortium. To better support WebRTC, Cisco is open-sourcing its H.264 codec and providing a binary software module that can be downloaded for free from the Internet. Cisco will cover MPEG LA licensing costs for this module, and based on the current licensing environment, this will effectively make H.264 free[i].
VP8 is a video compression format owned by Google. Google remains a staunch supporter of VP8 after buying the company that created it. Google then released VP8 software under a BSD-like license as well as the VP8 bitstream specification under an irrevocable license and free of royalties. VP8 is roughly equivalent in processor usage, bandwidth and quality as H.264. As a royalty free video codec, every WebRTC-enabled browser supports VP8 today (Google Chrome, Mozilla Firefox and Opera). For plugin-less real-time communications, VP8 is the dominant video codec.
[i] Rowan Trollope, “Open-Sourced H.264 Removes Barriers to WebRTC”, Cisco Blogs, October 30 2013 (http://blogs.cisco.com/collaboration/open-source-h-264-removes-barriers-webrtc/)