CNET has an interesting article on the Google I/O conference, where Google announced they are nearly finished with their VP9 codec, seeking out final specs on June 17. Developers can actually use the new codec right now by going through Chrome's about:flags and visiting the YouTube VP9 channel . But because the codec potentially infringes on several patents, it may never see royalty-free adoption (Nokia isn't interested in backing off).
Google's VP9 Is Better, But Faces Patent Issues: Royalty-Free May Not Be Possible
Still, you have Google pushing this new compression, which they claim doubles video quality while using 50% less bandwidth than H.264. Because YouTube uses a ton of bandwidth, Google is probably paying some pretty high prices to keep YouTube afloat. So rapid adoption of the codec is in their best interest and they hope it's in yours as well.
But as the CNET article mentions, mobile applications have just started getting used to VP8 so that video doesn't blow out battery life too quickly. And there's also the matter of HEVC (H.265) right around the corner, which boasts double the quality at half the bandwidth as well. The companies behind HEVC also want to make it royalty free.
H.264, which is 10 years old and one of the most common codecs in video compression, is currently something for which developers have to pay. Google is hoping to make VP9 free, but with the patent infringement problem, that may be impossible. The main reason they're against people paying for VP9 is that they see it as an obstacle for those who want to create video projects cheaply: programmers, schools, startups, etc.
VP8 was developed by On2 Technologies (which Google bought, natch) and was subject to 12 patent claims organized by MPEG LA back in 2011, a grouping which includes Nokia. YouTube started using VP8 in 2010 in response to the Free Software Foundation to replace Adobe Flash and H.264 with a mix of HTML5 and VP8. 11 of the companies reached an agreement with Google, but Nokia took HVC and Google to a German court for the use of VP8 on Android. So, the fact that VP9 is derived from VP8 could mean there's still some trouble to sort out before it becomes royalty-free, if ever.
It seems like an obstacle that Google should probably be able to clear, but we'll probably see all of this come to a head in June.