Originally Posted by charlituna
from what I understand not much. apparently they are waiving the fees until 2016 for all but perhaps the largest of companies
They charge two separate sets of royalties:
1) One royalty for vendors of software and hardware devices that take raw, uncompressed video and convert it into H.264 compressed video, and vice versa, takes compressed H.264 video and converts it into raw, uncompressed video, with the intention of the compressed video being used purely for private, personal uses. These royalties are intended to be borne solely by the software and hardware vendors themselves. All vendors of software or hardware that implements the H.264 codec (encoder or decoder) must pay royalties, no matter how large or small they may be.
2) One royalty for any content provider who makes use of the codec to generate H.264-encoded video for any non-private uses, such as distribution on the Internet, broadcast, physical media, etc. These royalties are intended to be borne by the actual content distributors/broadcasters themselves, and are not
covered by the hardware or software vendors' existing licenses.
Category (2) is further subdivided into several different categories of uses: (a) Cases where the end user directly pays for the ability to view videos either on a pay-per-title basis or a subscription basis, and (b) cases where the end user doesn't directly pay for the video (but the content provider may or may not receive other indirect forms of remuneration, eg through advertising revenue).
Category (2a) does not require content distributors to charge royalties if the end user pays for content on a title-by-title basis and the title is shorter than 12 minutes in length. For videos of 12 minutes or greater, as well as all titles obtained under a subscription basis, the royalty varies depending on the price paid and the number of subscribers/copies purchased.
Category (2b) is further subdivided into two separate categories: (i) Distribution over the Internet, and (ii) all other forms of distribution.
Royalties for category (2bii) varies, depending on the number of encoding devices that were used to create the sum total of all content distributed under the category.
Category (2bi) does not require the content distributor to pay royalty fees until at least 2016.
In total, the only entities that are not required to pay royalties are content distributors who sell content of less than 12 minutes duration on a title-by-title basis, and content distributors who distribute their titles over the internet for no direct fee. All other content distributors are required to pay royalties. Every hardware and software vendor who implements H.264 must pay royalties.