<i>Hardware decoding makes h264 usable on low-power devices like phones which Google sees as the future of the internet.</i><p>This is true.  But, if I had to choose between paying $20 extra for a better processor (that can play Theora) or $20 extra for a patent license (to legally play h.264), I would pick the former.  At least I can use the better processor when I'm not watching video; the patent license only works for the 10 minutes a year I feel like looking at Youtube on my phone.<p><i>It's technically superior and also supported out of the box by 97% of new computers.</i><p>Nice statistic.  What percentage of Internet users have "new computers", though?  (I work at a company with 300,000 employees.  We still use Windows XP; two versions behind the latest stable version of Windows!)<p>You are right that h.264 is technically superior to Theora. The Space Shuttle is technically superior to my bicycle, but due to cost concerns, I have to ride my bike to work rather than fly there on the space shuttle.  Sometimes the best solution is not the one you can afford.<p>(I can't afford an h.264 license.  Or rather, I <i>won't</i> afford it.  I don't care <i>that</i> much about seeing a cat flushing a toilet on my phone.)