You can license H.264, for the purpose of encoding video, for free or cheap, if your volume is modest. [1]<p>Whoever handles the video distribution (you or your customers) also needs to license the codec. This too is free or cheap. It could all change in the future, but who knows if that will happen.<p>Personally, I'd be more worried about other parts of the encoding chain. What format are you using? MP4 requires a license. What audio codec? Both AAC and MP3 require a license, and they're more expensive out of the gate. And what about decoding inputs? You need to license decoders for whatever input you accept.<p>[1] <a href="http://www.mpegla.com/main/programs/AVC/Documents/AVC_TermsSummary.pdf" rel="nofollow">http://www.mpegla.com/main/programs/AVC/Documents/AVC_TermsS...</a>